Life insurance makes sense for you because it gives surviving family members financial peace of mind if you were to die. But do your kids need life insurance, too? November is National Adoption Month and a good time to consider this insurance option for your children. For specific product options, see Children's Life Insurance.
Receive lifetime coverage
If you pay the monthly premiums, your children can have coverage for life. In many cases they won’t need a health exam later on unless they ask for a larger death benefit.
Enjoy low rates
Most life insurance premiums are based largely on age, so it usually costs less to insure a young child. Permanent policies also lock in premiums for the life of the policy.
Eliminate health exams
Many child policies don’t require a full medical exam. Because children are typically healthier than adults, they are rarely denied coverage—this can matter if a serious condition runs in the family.
Gain cash value
Premiums for permanent life insurance cover the death benefit and build cash value that can grow at a fixed or variable rate. By age 18 the policy may hold cash that can help pay for college, a first home, or a head start on retirement savings.
Cover final expenses
No parent expects a child to die young, but accidents happen. A child’s life insurance policy can help cover final expenses and protect family finances against unexpected costs.
Evaluate your budget
Despite the benefits, your budget may not stretch to include insurance for your children. Make sure you and other dependents are adequately insured first, then weigh the pros and cons for your child; for general context, see Life Insurance: Overview.
Consider alternative saving tools
Roth IRAs and 529 plans help parents save for a child’s future education and retirement. Compare these options with a life policy to choose the best approach for your family.
After you review your options, talk to your agent about which policy, if any, fits your goals and budget.
Frequently Asked Questions
Do children really need life insurance?
Most families do not need a child’s life insurance for income replacement, but policies can cover final expenses and lock in insurability for the child.
What type of policy is common for children?
Permanent life insurance is common because it provides lifetime coverage and builds cash value, but term options are less typical for children.
Will a child’s policy affect future insurability?
One advantage of a child policy is guaranteed insurability later without another medical exam for coverage increases, depending on the contract.
Can the cash value be used for college or other expenses?
Yes—cash value can often be borrowed against or withdrawn under the policy terms to help pay for college or other needs, though loans reduce the death benefit.