Should You Buy Life Insurance for Your Children?

The Case For

Child life insurance guarantees your child's insurability. If they develop a chronic condition like diabetes or a mental health issue before adulthood, they may face high premiums or denial as adults. A policy purchased in childhood can be converted to adult coverage regardless of health changes.

Whole life policies purchased for children build cash value that can supplement college funding or provide a financial foundation when they start their own families.

The Case Against

Children don't have financial dependents, so there's no income to replace. The primary purpose of life insurance — income replacement — doesn't apply.

The cash value growth in child policies is typically modest compared to investing the same premium in a 529 plan or index fund. From a pure investment perspective, there are better options.

Many families would be better served by maximizing coverage on the parents, who are the actual income producers the family depends on.

A Balanced Approach

If you've already adequately covered both parents and have extra budget, a small whole life policy for your child ($25,000-$50,000) can make sense as an insurability guarantee and future gift.

A child rider on a parent's policy is often the most cost-effective way to provide child coverage — typically $5,000-$25,000 of coverage for all your children for just a few dollars per month.