We all want our children to live long and healthy lives, which is why child life insurance may not be a high priority for you. However, it is worth considering because it can lock in cheap rates and serve as an investment vehicle for your children.
Find out more about this sort of life insurance and whether you should buy it for your children.
Our list of the best life insurance for children includes businesses that provide independent term and whole life insurance plans for children rather than riders, which typically expire when the child reaches the age of majority.<\/p>\n\n\n\n
Child life insurance does not refer to any specific form of policy; you cannot purchase a policy just for your children. You can, however, add your children to your own life insurance policy by purchasing a children’s critical illness cover add-on.<\/p>\n\n\n\n
If you add children’s critical illness coverage to your life insurance, you will be paid if your child is diagnosed with a catastrophic disease. This would pay all expenditures associated with their care, including any time away from work required to care for them.<\/p>\n\n\n\n
If you’re thinking about getting life insurance for your child, go to your policy advisor to see what they can give. If you’re seeking new bargains, check prices to find which policies can add child life insurance at the lowest cost.<\/p>\n\n\n\n
The most appealing aspect of a child’s life insurance policy is that you are ensuring that your child will have coverage even if he or she develops a health condition later in life. Furthermore, insurers frequently provide riders (at an additional cost) that allow you or your child to obtain more coverage in the future without having to undergo a medical exam or prove insurability.<\/p>\n\n\n\n
When you get life insurance for a child, you are not simply locking in insurability if your child’s health changes. You’re also ensuring that your child is covered if he or she pursues a risky pastime, according to Steve Meldrum, an insurance specialist with Swell Private Wealth. Meldrum, for example, has a 23-year-old client who has had difficulty obtaining life insurance because he is a scuba diver\u2014a hobby that insurers regard as a danger to insure.<\/p>\n\n\n\n
There will never be a better time to buy life insurance than when your children are still babies. Rates will rise with each passing year of life. Naturally, you or your child will have to pay premiums over a longer period of time. However, owing to the extremely low rates for children, the total amount paid over time may be lower. Using Hoang’s rate example, the $44.46 monthly premium for $100,000 of coverage at age 0 will total $20,000 less over 65 years than the $126.76 monthly premium paid by a 30-year-old over 35 years.<\/p>\n\n\n\n
Because the chances of a child dying are low, burial fees are not a compelling incentive to buy life insurance for children. However, if this occurs, a life insurance policy will provide funds to assist in covering the cost of terminal expenses. It may also allow the family to take time off work to grieve the loss of a child.<\/p>\n\n\n\n
If you only need life insurance for a child to cover funeral expenses, you can probably add a rider to your own life insurance policy to cover your child for less than the cost of a whole life insurance policy on the child.<\/p>\n\n\n\n
A percentage of the premiums paid for a whole life insurance policy is allocated to the accumulation of cash value. When you buy a life insurance policy for your children, a larger amount of the premium will go toward the cash value because the cost of insurance is lower and the cash value has more time to accumulate.<\/p>\n\n\n\n
Whole life insurance products accumulate financial worth, albeit at a low rate of return. Life insurance for a child should not be used in place of a 529 college savings plan.<\/p>\n\n\n\n
When you buy insurance for a newborn, it normally takes 15 years for the cash value to equal the premiums paid\u2014that is, to break even. However, if you invest in a 529 college savings plan and get a 7% return (the typical stock market return), your investment would double in 10 years. Investing in a 529 plan yields substantially higher returns than investing in a life insurance policy.<\/p>\n\n\n\n
When you buy a whole life insurance policy, you should anticipate paying payments for several decades.<\/p>\n\n\n\n
If the insurance has adequate cash value, you may be able to utilize it to cover premium payments for a while. However, your child will have less cash value if he or she requires it later in life.<\/p>\n\n\n\n
Several insurers cap the amount of coverage for children’s life insurance policies at $50,000 or $75,000. That will not suffice once your child is an adult with a family to support. To get adequate coverage, they will most likely need to buy life insurance as an adult.<\/p>\n\n\n\n
When you buy life insurance for your children, you are foregoing funds that could be utilized to support your children’s well-being, according to Meldrum. Because your child is unlikely to die at a young age, your money may be better spent elsewhere.<\/p>\n\n\n\n
Children are normally eligible for coverage when they are 14 or 15 days old. Once that barrier is reached, you can buy insurance for your kid or grandchild at any time until they reach the age of majority. The cutoff age differs between insurers. For example, the Gerber Life Insurance Grow-Up Plan has an age limit of 14, whereas Mutual of Omaha has an age limit of 17 for purchasing a children’s whole life insurance. If you add a kid life rider to your own policy, the age limit may be raised to 25, depending on the business.<\/p>\n\n\n\n
Parents, grandparents, and legal guardians can buy life insurance for their children directly from insurers, either online or over the phone, or through a licensed agent. Employers who provide group life insurance as a perk to their employees may also provide optional extra life insurance, such as policy riders to cover wives or children. However, not all insurance firms provide kid life insurance policies and riders. Check with your insurer or agent if you want to get coverage.<\/p>\n\n\n\n
Protective provides a diverse range of coverage alternatives for children. It features the largest term conversion limitations for children and the cheapest term policies of the companies we looked at.<\/p>\n\n\n\n
You may acquire up to $25,000 in coverage for all present and potential children aged 15 days to 18 years under one rider with Protective’s children’s rider. When your children reach the age of 25, you can convert the rider to permanent insurance for up to five times the face value. If you choose permanent coverage, Protective additionally offers entire, universal, and indexed universal life plans for children.<\/p>\n\n\n\n
AM Best has assigned Protective an A+ (Good) financial strength grade, indicating a superior ability to pay claims. And, although ranking 16th out of 21 firms in the J.D. Power 2021 U.S. Individual Life Insurance Study, the insurer had fewer complaints with the National Association of Insurance Commissioners (NAIC) than predicted during the last three years, given its market share.<\/p>\n\n\n\n
Protective also ranks high in our rankings of the best life insurance companies, best term life insurance companies, and best life insurance companies for persons over the age of 50.<\/p>\n\n\n\n
Nationwide is well-regarded for its customer service and financial stability, and it provides a choice of options for children’s life insurance. Over the last three years, the insurer has had considerably fewer complaints than predicted, and it also ranks second out of 21 insurers in the J.D. Power 2021 U.S. Individual Life Insurance Study.<\/p>\n\n\n\n
You can purchase whole or universal life insurance for your children, or you can add a children’s term rider to your existing term or a permanent policy. The rider covers eligible children from the age of 15 days until the age of 22 or the time of marriage. When your child reaches the age of 18, they can change their coverage to their own permanent policy.<\/p>\n\n\n\n
Nationwide also has an A+ (Superior) financial strength rating from AM Best and most policies contain three living benefits for chronic disease, critical illness, and terminal illness. These are just a few of the reasons why it is our top choice for best life insurance companies and best whole life insurance companies.<\/p>\n\n\n\n
Perhaps the only disadvantage is that the company’s term insurance isn’t as cheap as those of other providers. It is, nonetheless, worthwhile to compare pricing for children’s standalone plans with other insurers.<\/p>\n\n\n\n