What is life insurance for children?
Life insurance for children is usually purchased by a parent or guardian as a safety net in case your child passes away. These policies are typically term-based, lasting until around the age the child becomes an adult, but it's also possible to purchase a permanent policy, which would allow the child to access coverage for their entire life at a locked-in lower rate due to their young age. Note that life insurance for children is distinct from a child rider.
How do life insurance policies for kids work?
Life insurance for children is typically a term life insurance policy purchased by a parent or guardian as a safety net in case your child passes away while they're a minor. If you keep the policy active, it can pay a death benefit to its beneficiaries, typically the child's parent or guardian, upon the child's passing.
What's the best age to take out life insurance for my child?
The minimum age for life insurance ranges from 0-14 days, meaning you can take out life insurance for your baby, child, or teen. No medical exam is needed to qualify for coverage, so you can easily enroll them whenever the timing is best, but enrolling them at a younger age may result in a lower premium.
Should I buy life insurance for kids?
Getting life insurance for your child can be worth it if you want to make sure there's a safety net for your family in case your child passes away. There are some other benefits to getting life insurance for a child, such as potentially lower life insurance rates once they're an adult. Talk with a financial advisor to understand the implications of purchasing life insurance for your child while they're a minor.
Is a term policy enough or should I buy whole life insurance for my child?
While many parents choose a term policy for their child's life insurance, you might decide to get permanent life insurance (like a whole life policy) if you want to make sure your child and their future family have coverage into adulthood. If you think your child will want life insurance coverage as an adult, getting a whole life policy for them when they're a child can help lock in a lower fixed-rate premium, since life insurance rates generally increase as you age. A whole life policy will accumulate cash value, and it can help provide a financial safety net for future generations, since the beneficiaries could eventually be changed to your child's spouse and children.
That said, permanent life insurance policies are considerably more expensive than term policies. It may make more sense to purchase a term policy for your child when they're young. When they reach adulthood, they may be able to convert it to a permanent policy themselves if they want to keep it. That way, the higher premium will only apply once the policy is converted.
What's the difference between life insurance for children and a child insurance rider?
Life insurance for children is distinct from a child insurance rider, which is an extension of your or your partner's life insurance policy that allows for a small death benefit if your child dies. A child rider can be more affordable, and it can often be converted into a separate policy for your child once they're an adult.