Life insurance for your kids

Life insurance can be a valuable financial tool for many people. But did you know that you can buy life insurance for your children to give them a head start on their financial path? That’s because, in addition to offering a benefit to cover medical or final expenses if something were to happen to them when they’re young, buying a policy now can provide them with a variety of benefits in adulthood.

As the name implies, children’s life insurance covers the life of a child and is usually purchased by the parents, guardians or grandparents. Because this type of insurance is typically a whole life product, it’s permanent protection that lasts for the child’s lifetime. Ownership of the policy can be transferred to the child once they become adults.

Benefits of life insurance for children

Build cash value

Permanent life insurance products offer the ability to accumulate cash value in the policy. This cash value will continue to grow on a tax-deferred basis until a withdrawal is made.¹

Once they’re older and become the policyholder, your child can borrow against the cash value in their policy in the form of tax-advantaged withdrawals and loans.²

Secure lower premiums

The payments, or premiums, that you pay into a life insurance policy are determined by factors such as age, sex and health, in addition to the type of product and coverage amount. By purchasing a policy for a child while they are young and healthy, you have the potential to lock in a lower premium for them now than they may be eligible for in the future.

Guaranteed insurability

Many products allow you to add optional riders, such as a guaranteed insurability rider, to the policy for an additional cost when you purchase it. This rider enables your child to purchase additional life insurance policies in the future without doing another medical exam.

Having this added feature can help your child get the coverage they need to help protect their future loved ones.

When should you get life insurance for your child?

Though the minimum age you can purchase life insurance for a child will vary, policies are generally available for ages 0 to 14 days old, up to age 17. After that, they would be eligible for an adult life insurance policy.

Before determining if a life insurance policy for your child is a good fit, review your budget and financial needs. Having adequate coverage on your own life may be more of a priority. In this case, there are children’s riders that can often be added to your own life insurance policy for an additional cost to help address both needs.