Kids Life Insurance: What Parents Need to Know

Kids are the joy and center of every parent’s world. They bring laughter, love, and happiness to our lives every day. As much as we wish for our children to be safe and healthy all the time, we know that the unexpected can happen. That’s why it’s essential to secure our children’s future by getting them life insurance.

What is kids life insurance?

Kids life insurance is a policy that provides financial protection to your child in case of unforeseen circumstances. It pays a lump sum of money to the beneficiaries if the child passes away during the life of the policy.

Parents or guardians can purchase this policy on behalf of their children, and it’s often affordable and easy to obtain. It’s a type of policy that ensures that your child’s financial future is secured, no matter what happens.

Why should I get life insurance for my child?

Many parents are hesitant to purchase life insurance for their children because they believe it’s unnecessary. However, there are several reasons why purchasing life insurance for your child is a wise decision.

Financial security

Life insurance provides your child with financial security in the event of their untimely death. It ensures that your child’s future is taken care of and provides peace of mind to parents knowing their children are protected.

Guaranteed insurability

Many life insurance policies offer guaranteed insurability, which means that your child can purchase additional coverage as they get older without having to undergo a medical examination or answer health questions. This is an advantage because many people may develop medical conditions later in life, making it more challenging to obtain life insurance coverage.

Builds cash value

Some life insurance policies for children have a cash value component, meaning that as the policy accumulates cash value, the child can borrow against it in the future. This can be beneficial for college tuition, down payment on a home, or starting a small business.

What types of life insurance are available for children?

There are two primary types of life insurance policies available for children: whole life and term life insurance.

Whole life insurance

Whole life insurance provides coverage for the lifetime of the policyholder, and it builds cash value over time. This type of policy is more expensive than term life insurance because it offers a lifetime of protection and has a cash value component.

Term life insurance

Term life insurance provides coverage for a specified period, generally ranging from 10 to 30 years. It’s less expensive than whole life insurance because it only provides coverage for a specific period and does not have a cash value component.

How much life insurance coverage do I need for my child?

The amount of life insurance coverage you need for your child depends on several factors such as your financial situation, the child’s age, and future expenses. In general, it’s recommended that you purchase coverage that is ten times your child’s annual expenses.

For example, if your child’s yearly expenses are $10,000, you should purchase a policy that offers at least $100,000 in coverage. This will ensure that your child’s future is secure and that any future expenses are covered.

How much does kids life insurance cost?

The cost of kids life insurance varies depending on the type of policy, amount of coverage, and the child’s age and health. Whole life insurance policies for children are typically more expensive than term life insurance policies because they offer coverage for the child’s lifetime and have a cash value component.

Term life insurance policies are less expensive and offer coverage for a specified period, generally ranging from 10 to 30 years. The cost of a term life insurance policy depends on the length of the term and the amount of coverage.

Sample cost breakdown for a $100,000 term life insurance policy for a healthy child:

Term Length	Monthly Premium
10 years	$6.50
20 years	$9.75
30 years	$12.00

FAQs

Who can purchase life insurance for a child?

Parents, grandparents, or guardians can purchase life insurance policies for children.

Can I purchase life insurance for my child if they have a pre-existing medical condition?

It depends on the insurance company and the severity of the condition. Some insurance companies may decline coverage or charge higher premiums for children with pre-existing medical conditions.

What happens to the policy when my child reaches adulthood?

When your child reaches adulthood, they can take over the policy and become the policyholder. At this point, they will be responsible for making premium payments and managing the policy.

Can I borrow against the cash value of my child’s life insurance policy?

Yes, if the policy has a cash value component, you can borrow against it. Keep in mind that the loan will accrue interest, and if you don’t pay it back, it will reduce the death benefit.

What happens to the policy if my child passes away?

If your child passes away during the life of the policy, the beneficiaries will receive a lump sum payment from the insurance company. This payment can help cover final expenses, such as funeral costs or medical bills.

Conclusion

Kids life insurance provides financial protection for your child in case of unforeseen circumstances. It’s a wise decision to consider purchasing life insurance for your child to ensure their future is secure. There are various types of policies available, and the cost varies depending on several factors. By taking the time to research and understand the options available, you can make an informed decision to best protect your child’s future.