Life insurance for children: What you need to know

In most cases, buying life insurance for a child is unnecessary since you don't rely on them financially. Learn the pros and cons of buying life insurance for children — and when it’s worth it.

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Tory CrowleyAssociate Editor & Licensed Life Insurance AgentTory Crowley is an associate life insurance and annuities editor and a licensed insurance agent at Policygenius. Previously, she worked directly with clients at Policygenius, advising nearly 3,000 of them on life insurance options. She has also worked at the Daily News and various nonprofit organizations.&Antonio Ruiz-CamachoAssociate Content DirectorAntonio is a former associate content director who helped lead our life insurance and annuities editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.

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Maria FilindrasMaria FilindrasFinancial AdvisorMaria Filindras is a financial advisor, a licensed Life & Health insurance agent in California, and a member of the Financial Review Council at Policygenius.

Updated|3 min read

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The primary purpose of life insurance is to leave a financial safety net for your loved ones in the event of your death and ensure that they don’t suffer financially without your income. In most cases, parents don’t rely financially on their minor children, so there’s no need to buy life insurance for them — and the few existing options on the market are expensive and complex. 

If you want to get some insurance coverage for your child, one of your best options is to get your own life insurance policy and add a child rider — a coverage supplement that will cover all the children in your household for a small fee. If your child has a disability or is at high risk due to illness, buying an individual whole life insurance policy for them will be your best bet.

Key Takeaways

  • Buying life insurance for a minor is rarely necessary because minor children don’t earn an income, which is the main reason to get life insurance in the first place.

  • The only exception will be if your child has a disability or is at high risk due to illness. In that case, you can buy a whole life insurance policy for them.

  • For most people, the easiest way to provide for your child if you die is to get life insurance coverage for yourself. You can also add a child rider to your own policy to insure your child’s life.

  • Children are more likely to benefit from a savings account like an IRA or 529 plan, rather than a child life insurance policy.

Who needs life insurance for their children?

Most people don’t need life insurance for their children. However, you may want to consider getting a life insurance policy for your child if: 

Otherwise, your child most likely doesn’t need to have their own life insurance yet. They’ll likely be able to get their own affordable life insurance in their 20s and 30s. 

How does life insurance for children work?

Life insurance for children works much like it does for adults: You’ll pay premiums and if the child dies while the policy is active, you’ll receive a payout known as the death benefit

Unlike coverage for adults, however, the options for children are limited. Parents who want to buy coverage for their children only have the option of whole life insurance policies. 

Whole life is a type of permanent life insurance that never expires — which means your kid would be covered for their entire life as long as they keep paying the premiums. Whole life also comes with a cash value account that grows tax-free over time. However, whole life policies are usually significantly more expensive than a comparable term life insurance policy.

Getting a whole life insurance policy for your child has several considerations:

  • Whole life policies don’t offer competitive rates compared to term life insurance.

  • They come with high administrative fees and low payouts.

  • Any growth for cash value is slow.

At the same time, securing a whole life insurance for a child with disabilities or at risk due to a serious health condition can have some advantages.

  • It will cover them for their entire lives, as long as the policy remains active.

  • They won’t have to worry about not being eligible to buy their own policy later on due to health issues.

Child life insurance pros and cons

Pros

Cons

Guaranteed insurability

Low coverage amounts

Covers funeral costs

Chances of a child dying are very low

Locks in lower rates

Expensive long-term commitment

Cash value

Low rate of return on investment

Sacrifice investment in other savings accounts

Best whole life insurance for children: MassMutual

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MassMutual

Policygenius rating 

Our proprietary rating methodology takes multiple factors into account, including customer satisfaction, cost, financial strength, and policy offerings. See the "methodology" section for more details.

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4.9

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AM Best is a global credit rating agency that scores the financial strength of insurance companies on a scale from A++ (Superior) to D (Poor).

A++

Cost 

Using a mix of internal and external rate data, we grade the cost of each insurance company's premiums on a scale from least expensive ($) to most expensive ($$$$$).

$

$

$

$

$

All 50 states

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MassMutual’s whole life insurance plan provides a lifetime coverage option that builds cash value with the potential to earn dividends.

Pros and conschevron icon

Pros

  • Strong financial stability ratings

  • Higher potential for dividends for whole life policyholders than many competitors

  • Good customer satisfaction ratings

Cons

  • High term life premiums

  • Term life not available through Policygenius

MassMutual pays higher dividends to its cash value policyholders than many competitors. It has high customer experience ratings compared to other insurers and consistently receives high third-party financial stability ratings, which is especially important when purchasing a lifelong policy.

Ready to shop for life insurance?

Child life insurance vs. child riders

If you still need to insure your child’s life, it’s simpler and cheaper to buy a term life insurance policy for yourself and add a child rider to your term policy. Riders are add-ons that can provide supplemental coverage to a life insurance policy under specific circumstances.

People often confuse child life insurance with child riders, but there’s a big difference between the two.

  • Child life insurance is a standalone policy that insures a child’s life. The insurer pays out a death benefit when the child passes away.

  • Child riders are optional add-ons to your own policy that pay out a small death benefit if one of your children dies. Coverage is tied to the parent’s or guardian’s policy. 

Comparing child life insurance vs. child rider

Child life insurance policy

Child rider

Who’s insured?

The child

The parent or guardian primarily and child secondarily

Type of policy

Permanent

Term

Cost per year

$219.84

$150 (in addition to policy premiums)

Coverage limits

$50,000

$25,000

Sample child life insurance cost is based on a $25,000 Gerber Life policy for a 1-year-old male in Ohio. Sample child rider cost is based on a $25,000 rider added to a Protective term life insurance policy at $6 per $1000 of coverage. Rate illustration valid as of 01/01/2024.

Benefits of a child rider vs. child life insurance

If all you need is peace of mind should the unthinkable happen, a child rider will be a better option than a standalone child life insurance policy.

  • Straightforward coverage. A child rider provides coverage for your child without the complex investing component that child policies have.

  • Flexibility to convert. As your child grows, if their needs change and you decide they need lifelong coverage, you can convert the rider into a whole life policy. 

  • Affordability. A child rider is more affordable than a full child life insurance policy. It usually costs about $50 per year for a $10,000 child rider.

→ Average cost of life insurance

Child riders by life insurance company

Here’s how Policygenius’ partner insurance companies handle child riders on term life policies:

Company                                                                                   

Eligible ages   

Coverage amount  

Annual cost per $1,000

Legal & General America

15 days-18 years

$5,000 or $10,000

$5.50                 

Corebridge Financial

15 days-18 years

$500-25,000      

$5.00                 

Lincoln Financial

15 days-18 years

$1,000-15,000    

$5.00                 

Mutual of Omaha

15 days-20 years

$1,000-10,000    

$7.20                 

Pacific Life

15 days-18 years

$1,000-10,000    

$5.50                 

Protective

15 days-18 years

$1,000-25,000    

$6.00                 

Prudential

15 days-18 years

$10,000-100,000   

$5.15                 

Symetra

15 day-17 years

$1,000- $10,000

$4.20

Transamerica

15 days-18 years

$1,000-$99,000    

$6.00                 

Collapse table

Methodology: Life insurance averages are based on a composite of policies offered by Policygenius from Brighthouse Financial, Corebridge Financial, Foresters Financial, Legal & General America, Lincoln Financial, Mutual of Omaha, Pacific Life, Protective, Prudential, Symetra, and Transamerica.Rates may vary by insurer, term, coverage amount, health class, and state. Not all policies are available in all states. Rate illustration valid as of 01/01/2024.

Ready to shop for life insurance?

Alternatives to life insurance for children

Rather than getting a life insurance policy, you may be better off setting up a savings plan to cover your children's future expenses. 

There are several ways to invest the money you’d have spent on your child’s life insurance and instead save it for them to use during their life.

  • 529 savings plan: These plans are tax-advantaged accounts sponsored by the government. There are two types of 529 accounts: prepaid tuition plans and education savings plans. Both are exclusively for higher education expenses and qualified withdrawals are tax-free.

  • Custodial account: Parents can save and invest in a custodial account held in the name of their child, such as UTMA (Uniform Transfers to Minors Act) or UGMA (Universal Gifts to Minors Act) to build savings for their child. Custodial accounts are handled by the parent or guardian and transferred to the child when they turn 18 or 21 years old.

  • IRA: If your child earns money, you can manage an IRA savings account for them and match their earnings to jump-start retirement savings.

Authors

Tory Crowley is an associate life insurance and annuities editor and a licensed insurance agent at Policygenius. Previously, she worked directly with clients at Policygenius, advising nearly 3,000 of them on life insurance options. She has also worked at the Daily News and various nonprofit organizations.

Antonio is a former associate content director who helped lead our life insurance and annuities editorial team at Policygenius. Previously, he was a senior director of content at Bankrate and CreditCards.com, as well as a principal writer covering personal finance at CNET.

Expert reviewer

Maria Filindras is a financial advisor, a licensed Life & Health insurance agent in California, and a member of the Financial Review Council at Policygenius.

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