A lot of families decide to buy life insurance for their children in order to lock in a low-rate rate, protect their insurability, and provide for burial expenses in case of death. Although children’s life insurance can be used as a savings vehicle for college, it is often less expensive than other savings plans.
There are two ways to insure your child. A children’s insurance rider can be added to a permanent or term policy you already own, or it can be purchased in the child’s name. Children’s insurance companies that offer permanent coverage for children can convert a term rider into permanent coverage. Calling an agent is the best way to obtain a quote or apply for a child’s life insurance policy.
Most Frequently Asked Questions
What is Child Life Insurance?
If a child dies while the policy is in force, child life insurance will provide a death benefit. Permanent policies are generally available for children. However, you can often add a term rider for your children to your policy to provide some coverage for all your children. When your child turns 18, many companies allow you to convert the term rider into a permanent policy. Child life insurance is purchased to pay for burial costs if their child dies while still a minor, or to lock in a lower rate and ensure their insurability.
What is a Children’s Term Rider and How Does It Work?
A children’s term policy typically covers all dependent children, current or future, of the insured up to a certain age. Although the coverage limits are generally limited to $25,000, some companies offer the option to convert the coverage to an adult policy that covers up to five times the amount. They can also get additional coverage without proving insurability. This helps to protect your child’s insurance access in the event of health problems.
You may be able, depending on which company you choose to add a children’s term rider to an existing whole-life, adult term, or universal life insurance policy. You should compare the features offered by different companies if children’s insurance is important to your family. This includes the age of expiration, convertibility, and whether coverage will continue if the insured passes away.
Do I need life insurance for my child?
Children don’t make income or have dependents. It is sad when a child passes away, but it doesn’t mean that the family will be financially devastated. A child’s life insurance policy is not necessary if you are able to pay for the funeral expenses of your child from your emergency fund. It’s a good idea to reconsider using it as a college savings plan. You will likely be better off with a 529 plan.
If your goal is to make sure your child has coverage for their entire family, regardless of any health problems, you may want to consider a permanent or convertible children’s policy. Be sure to carefully consider your options. Although you might be able to lock in a lower rate for your children by purchasing a permanent policy at the beginning, you could end up paying more in premiums in the future. Convertible children’s term riders are usually affordable and your children can decide if they wish to convert later.
How we chose the best children’s life insurance companies
J.D. Power’s 2021 U.S. Life Insurance New Business Study and the 2021 Insurance Barometer Study by LIMRA and Life Happens, we based our conclusions on third-party consumer research. We used third-party consumer studies, such as J.D. Power’s 2021 U.S. Life Insurance New Business Study or the 2021 Insurance Barometer Study from Life Happens and LIMRA to determine the most important factors parents and guardians consider when purchasing life insurance for their children. Based on more than 50 data points including ratings, we evaluated more than 91 companies in life insurance.
- Policies and their features
- Recommendations or endorsements
- Financial strength
- Customer satisfaction
- Customer complaints
- The age of business
- There are no-medical-exam alternatives
We chose the companies that had the highest financial strength ratings, the lowest consumer complaints, and offered the most options and tools. Each category was weighted as follows:
- 32% of Customer education, application, and online services features
- Types, features, and riders of policies: 29%
- Financial stability: 17%
- Customer satisfaction ratings: 15%
- Cost: 8%
Then, we looked at the top-scoring companies that offer children’s insurance policies and children’s term riders. We also examined the features of each. We looked at the maximum coverage available for a children’s rider, whether it can be converted into permanent coverage, as well as which policies are available to children. To find the best life insurance provider for children, we ranked companies on these features.