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Have you thought about whether it is worth getting life insurance for children? You may have never considered taking out a policy because life insurance is typically for adults. In reality, getting life insurance for your child can be extremely beneficial. Many policies can be term-based, expiring once the child becomes an adult. However, some policies are permanent and allow the child to access coverage for their entire life at the locked-in rate.
When it comes to protecting your children, Final Expense Benefits has you covered. Continue reading to learn more about life insurance for children, or call (866) 786-0724, Monday through Friday, 9 a.m. to 5 p.m. ET to ask questions and to find a plan that protects your child. Our free online quoting tool is available 24/7 for you to receive a free estimate.
If you’re interested in these or any of our other life insurance options, call us at (866) 786-0725 to learn more. Be sure to check our free online quoting tool for personalized pricing estimates.
How Does Life Insurance For Children Work?
Life insurance for children can be purchased as a term life insurance policy or a whole life insurance policy, with the parent acting as the beneficiary. The difference between the two is that term life insurance provides coverage for a specific period, while whole life insurance provides coverage for the entirety of one’s life.
The benefit of getting your child a policy is that, depending on the policy, they can renew the coverage and keep it for life. A permanent life policy would allow the child to keep the coverage at a locked-in rate. This rate will be lower due to the age at which they locked the plan.
Life insurance for children is different from a child life insurance rider. The rider is an extension of your life insurance policy that grants a death benefit should your child pass away. It is important to note that the child life insurance rider is more affordable than purchasing a life insurance policy for your child, but it will not provide the same amount of coverage.
Plans with higher death benefits will typically cost more per month. The monthly payment is called the premium.
Life insurance comes in three major forms: final expense insurance (also known as burial insurance), term life insurance, and whole life insurance. Each type’s purpose and intended market are different.
What Does Life Insurance For A Child Cover?
The beneficiaries of a child’s life insurance policy can spend the money however they choose. This includes using the funds to cover funeral costs, pay off debt, or other expenses. Purchasing a whole life or term life policy with a conversion rider is ideal if you transfer the policy to your child once they are old enough.
How Much Does Life Insurance For Children Cost?
Life insurance for children will cost less than an adult policy, which is why it is beneficial to lock in an insurance plan as a child. According to Forbes, a $50,000 whole life insurance policy for a baby under 12 months old would cost around $27 a month. This is the average cost, but it will vary depending on age, health, policy type, and other factors.
Should I Buy Life Insurance For My Child?
Locking in a plan for your child can provide valuable financial protection that can last your child throughout their life.
It is also important to consider a few questions before making the decision:
- Does your family have a medical history that could put your child at risk?
- Was your child diagnosed with a medical condition that will put them at risk?
If you answered yes to either of these questions, securing a life insurance plan for your child may be in your best interest. Not only will it help cover costs in the event of death, but depending on the policy, your child could also claim the cash value or take loans on the policy’s accrued cash value.
Pros and Cons of Life Insurance For Children
Pros
- Protect their future
Guarantee your child can buy additional coverage as an adult. Some insurance providers will allow the child, once they reach adulthood, to purchase additional coverage without requiring evidence of insurability.
- Health or lifestyle cannot prevent them from getting additional coverage
For example, if your child develops a serious medical condition, the policy purchased would entitle them to buy additional coverage. They would not be denied because they had a plan before developing a serious condition.
- The plan would cover final expenses
A child’s chances of passing away are slim, but it does happen. The average burial will likely exceed $10,000, and cremation is around $6,000. When the unexpected happens, these costs can extend the grief your family is dealing with.
- Savings plan
The cash value in a permanent life insurance policy will increase as you make payments. As the cash value grows, your child will be provided with additional financial protection and resources once they reach adulthood.
- Cheaper premiums
Children cost less to insure than adults, meaning you can get a lower premium on a whole life policy. Premiums will be considerably higher if you wait until adulthood to purchase a policy.
Cons
- Low amounts of coverage
Most insurance plans offered for children provide less than $100,000 in protection. This amount would likely be too low for an adult seeking coverage to replace income or pay off large debt.
- Long-term costs
Keeping a life insurance policy active for your child is a long process, and should it become unaffordable, you may have to cancel the coverage before your child can utilize the benefits of the coverage.
- Slim rate of return
There is a very slim chance that the policy will pay the death benefit as the child mortality rate is low. According to the Centers for Disease Control (CDC), the chance of a child between the ages of one and four passing away is 28 per a population of 100,000.
How Much Does Life Insurance For Children Cost?
Life insurance for children can range in cost depending on age, gender, desired coverage amount, policy type, health history, and the insurance company you choose.
Below are sample rates for the state of Maryland using the Mutual of Omaha child quote calculator.
Rates from Mutual of Omaha Insurance Website. Rates are subject to change based on applicant’s health and more.
Mutual of Omaha is one of the biggest names in the insurance industry and is a top-rated provider. Final Expense Benefits works with only the best providers, and Mutual of Omaha is a favorite among our customers. Interested in life insurance for children from Mutual of Omaha? Call one of our expert agents at (866) 786-0725, Monday through Friday, 9 a.m. to 5 p.m. ET.
If you’re interested in these or any of our other life insurance options, call us at (866) 786-0725 to learn more. Be sure to check our free online quoting tool for personalized pricing estimates.
Requirements To Buy Life Insurance For Children
Only certain relatives can purchase life insurance for a child. This includes a parent (biological, step, or adoptive), grandparent, great-grandparent, or legal guardian. It is important to note that the child must be at least 14 days old before a policy can be purchased.
Many parents or guardians choose a term policy for their child’s insurance. However, you may want a permanent life insurance policy to ensure your child has lifetime coverage. If you want to set your child up with coverage into adulthood, a whole life insurance policy will lock in a lower fixed-rate premium.
Alternatives To Life Insurance For Children
Life insurance for children is a great way to protect you and your family. If you have a family medical history that could put your child at risk or if your child was diagnosed with a medical condition, a life insurance policy for your child would be beneficial.
However, if you simply want to help your child pay for college expenses or purchase a home in the future, a life insurance policy for your child is not the best option.
1
529 College Savings Account
This tax-advantaged program allows you to save money for a beneficiary’s education. The earnings grow tax-free, and you can withdraw funds for education expenses. You can contribute to the plan and invest the money in stocks or other assets. This is ideal if you are specifically looking for a plan to help your child afford college.
2
Custodial Account
A custodial account is created by a parent, grandparent, or guardian to save money for a beneficiary. The beneficiary cannot access the account until they reach the age of majority, which differs depending on the state. The custodian controls how the money is invested and spent. This type of account helps the beneficiary save money for a house or other future expenses.
Conclusion
Life insurance for children can be a great way to protect your family when the unexpected happens. If your child was recently diagnosed with a medical condition or if your family has a medical history that could put your child at risk, a life insurance policy for your child is a great way to ensure you are prepared for anything.
Final Expense Benefits works with only the top-rated insurance providers to provide you and your loved ones with the coverage you need.
We partner with over 20 carriers, including:
Our talented agents are available Monday through Friday, 9 A.M. – 5 P.M. ET at (866) 786-0725, or check out our free online quoting tool to receive an estimate.
Conclusion
Life insurance is an excellent way to provide financial security for your family when you pass away. In particular, final expense insurance is a low-cost way to cover major end-of-life expenses and ensure your family isn’t saddled with huge upfront bills at an emotionally draining time.
Final Expense Benefits is here to help you understand the life insurance market and see how a policy can fit into your financial toolkit. Call us at (866) 786-0725, Monday through Friday, 9 a.m. to 5 p.m. ET, to learn more about life insurance, and be sure to use our free online quoting tool for pricing estimates.
Frequently Asked Questions
Can Babies Get Life Insurance?
Babies are eligible for life insurance, but they must be at least 14 days old before most life insurance providers let you take out a policy on the child.
Is It Better To Purchase A Child Their Own Life Insurance Plan Or Add Them On As A Rider?
It depends on the situation, but typically, purchasing a life insurance plan for the child is better because the coverage will last their entire life and is locked in with a lower premium. A standalone policy would allow you to insure the child for a much higher amount and give the insured the option to buy more coverage as an adult.
Should I Purchase Term Or Whole Life Insurance For My Child?
Typically, a whole life insurance policy is the best type of policy you can purchase because the coverage will last for life and the premium is locked in. While a term life policy has a lower rate, it will expire after a specific period, leaving your child without coverage.
