Lauren Lewthwaite Last Updated On: June 27, 2023

What Is Life Insurance For Children?

Life insurance for adults is quite common and brings families peace of mind, but life insurance for children, while less common, is something that many families consider, as upsetting as it may be. The bottomline is, that if something happens to your child, having life insurance for them can help you deal with financial stress during this unthinkable time. 

How Life Insurance For Children Works?

Child’s life insurance is typically purchased by the child’s parents or grandparents and it’s a form of whole life or permanent life insurance. A child’s life insurance policy can be purchased at any age, as long as they’re a minor. Just like typical life insurance, the family pays premiums toward that policy and the insurance provider would pay a death benefit to the parents should the child pass away. 

Since life insurance for children is a type of whole life insurance, it also comes with a savings vehicle, also known as a cash value account. This is a particular draw for a child life insurance policy, because it’s a means to saving for your child’s future (including tuition). 

After a certain age (usually 18 or 21), your child will be able to take over their life insurance policy and choose whether to maintain it, cancel it, extend coverage and more. As the parent, you can also choose to keep ownership over the policy. 

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The Benefits of a Child Life Insurance Policy

Life insurance policies for adults are generally designed to prevent the deceased’s family from experiencing financial hardship should they pass away unexpectedly. For children, the goal is actually threefold:
  • A savings account for your child’s future
  • Guarantees insurability for when they’re older
  • Covers end of life costs

Because the policy comes with a cash value account, you can not only have life insurance for your child but also actively save towards their future, giving yourself and your child a savings vehicle to withdraw from or borrow against for things like tuition, a down payment, and more. An added benefit is that the savings are tax deferred, meaning you won’t pay taxes on the gains until you withdraw the money. 

In terms of insurability, purchasing life insurance for your child can ensure they’ll be covered for their entire life while locking in a low rate. This is particularly important if they’ve been diagnosed with something that will worsen as they get older, making it hard for them to get life insurance as an adult. It would also benefit them if they end up choosing a career that’s typically hard to get insured for, such as a pilot.

Lastly, should the worst happen and your child passes away unexpectedly, you won’t also be saddled with the burden of financial stress. Child’s life insurance helps cover end of life costs like the funeral or medical bills, depending on the policy. 

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Children Life Insurance Plans: Are They Right For You?

There are several benefits to life insurance for children, but there are also situations where it might not be the best fit for every family. For some, a standard investment account will work better for their needs and allow them to have more control over the funds. 

In terms of insurability, most healthy adults won’t have an issue finding an affordable life insurance plan, unless they have a pre-existing condition (in which case a child life insurance policy can be a smart idea).  

A child life insurance policy is also a long-term commitment. It might no longer make sense for your child to maintain once they grow up and have a family of their own. It also ties up money that might be more beneficial for the wellbeing of your child. 

Whether or not children’s life insurance plans make sense for your family will come down to your financial situation, your child’s health, and your family’s priorities. 

The Cost of Child Life Insurance Plans

Life insurance for kids is much more cost effective than life insurance for adults, which makes sense: there’s less risk involved and, since no one typically relies on children for their income, there’s less of a death benefit. The average cost of life insurance for children will be anywhere from $30-$50/month. Coverage is low, with most plans falling at or under $50,000.

There’s also options to add a rider for kids life insurance to your existing life insurance policy, which can be a more cost effective option. By getting multiple insurance quotes, you’ll be able to compare and find the best child life insurance plans. 

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The Bottom Line

Before you explore life insurance for children, it’s important to ensure the adults are protected first. Since your children depend on you in so many ways, having that adult life insurance safety net will ensure they’re protected should anything happen. 

After that, child life insurance plans aren’t a one-size-fits-all. They’re not right for every family, but they are a smart idea in some situations. Before making any long-term commitments, make sure that life insurance for children makes sense for your family’s future. 


Life insurance for children is a policy purchased by parents or other family members that involves paying premiums to ensure a death benefit is paid out if the child passes away.
Because life insurance for children comes with a cash value account, it’s an effective way to save over the years and build up a fund that can be used for your child’s tuition, down payment, or even borrowed against. It can be a good investment for those that need disciplined saving help, but often comes with a lower rate of return than traditional investment accounts.
Compared to life insurance for adults, a child’s life insurance policy is relatively inexpensive. It’s important to note that the premiums can increase as the child gets older.


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