Buying life insurance coverage on a child is one of those things that feels uncomfortable from the start.
Sure, it can be strange to buy a life insurance policy for yourself, too. Most of us expect our children to long-outlive us, though, so even considering the possibility of something happening to a young child just doesn’t sit well.
However, there are some times when it might actually make sense to buy a life insurance policy for your minor child (or children). Here’s a look at what these policies cover and why you may actually want to consider one.
Child Life Insurance Coverage vs Adult Policies
First, there are some things you need to know about child life insurance policies.
Policy terms can be limited. While adult life insurance policies come in many flavors — including term life coverage, and permanent options such as whole life or universal life — children’s life insurance doesn’t usually have as many options. Coverage for minor children is typically offered as either a rider on an adult’s existing policy, or as a convertible whole life product.
Coverage can be converted into permanent protection. Many children’s life insurance policies allow for the child to later convert coverage into a permanent policy once they reach adulthood. This may make it easier and more affordable for a young adult to buy life insurance protection that lasts a lifetime, though coverage amounts may be limited.
The policy is often very affordable. Life insurance coverage for children can be very low-cost, especially if the policy is purchased as a term rider on a parent’s (or grandparent’s) existing life insurance policy. In many cases, this coverage can amount to just a few extra dollars a month.
The death benefit is typically very low. While many carriers offer life insurance protection well into the millions of dollars, you’ll find that most child life insurance policies have smaller limits. Depending on the carrier and how the policy is purchased (as a rider or standalone coverage), you may find yourself limited to just a few tens of thousands of dollars at most.
Looking for up to $5 million in life insurance protection for yourself? LeapLife can help match you with highly-rated carriers across the country.
Why You Should Consider Buying Life Insurance for Your Child(ren)
Now that you understand what’s different about child life insurance versus adult coverage, here are some reasons you might want to consider purchasing a policy.
Since children’s life insurance coverage can often be added as a rider onto a parent’s existing personal or group coverage, it’s often very simple to buy. There aren’t any medical exams to worry about, and purchasing life insurance for your child(ren) may be as easy as just opting in.
One Price Covers All of Your Kids
When you add a child term rider to your own life insurance policy, this coverage is good for all of your children… not just one child. For one monthly cost (usually just a few dollars), you’ll have protection for all of your minor children until they reach about 23-25 years of age, depending on the carrier.
It’s There Just in Case
Let’s face it, no one wants to consider that something could happen to their child. And odds are that it won’t. But if the absolute worst were to happen, the last thing a parent wants to be worrying about is how they’ll pay for certain medical bills or final expenses.
Life insurance is one of those products that you buy and hope to never use. Child life insurance is no different, but having it there just in case can offer added peace of mind.
It Can Guarantee Future Insurability
As years go by, there are many things that could occur which would make it harder — or even impossible — for us to purchase an affordable life insurance policy for ourselves. Illnesses, diseases, injuries, medical conditions, occupations, and even hobbies… each of these can affect our insurability and the premiums we will pay for coverage.
The longer your child is alive, the higher the chance is that they will do or experience something that could affect their life insurance premiums later on. By purchasing coverage for them while they’re young (especially if that coverage can later be converted into permanent life insurance), you ensure that your child always retains their insurability — even if they are diagnosed with a childhood illness or other condition.
The Bottom Line
Most of us would do anything in the world to keep our children safe from harm. That’s why buying life insurance on them can feel uncomfortable or even ridiculous. But the fact is that this affordable coverage option can not only offer your family an added financial safety net, but also set your kids up for their own insurability when they reach adulthood.
Interested in life insurance coverage that can protect the whole family? LeapLife can help.
Our platform can quickly and easily match you with personalized coverage for you and your loved ones, through one of our trusted (A-rated or higher) life insurance partners. Our agents are also available by phone if you need help building the individual policy that works best.