Life Insurance for Children

There are a handful of reasons why it can be a smart move to pursue life insurance for children. However, you’ll want to make sure it makes sense for your circumstances. While child life insurance works similarly to adult life insurance, there are some key differences.

In all life insurance plans, the policyholder pays premiums to keep the policy active.¹ At some companies, minors may not be able to have their own life insurance plans, nor can they directly receive life insurance payouts.² We recommend exploring all your options around child life insurance so you can choose the right plan for you and your loved ones.

What is Child Life Insurance?

Child life insurance is generally offered in the form of term or whole life insurance. Term life insurance provides coverage for a set amount of time while whole life insurance provides coverage for the entirety of one’s life.

One of the main appeals of life insurance is that it has the ability to help support loved ones following a loss. When learning about what child life insurance is, you may want to reflect on your intentions and reasoning before taking the plunge.

Should I Buy Child Life Insurance?

There are a few instances where it may be a good idea for you to explore a child life insurance policy. Two key questions to consider are:

• Does your child have a medical condition that will impact them for the rest of their life?
• Does your family have a medical history that may put your child at risk early in life?

If you answered yes to either of these questions, it may make sense to continue your search for the best life insurance options for your child.

Pros and Cons of Child Life Insurance

Even the best child life insurance plans can have their drawbacks. We encourage you to explore all the pros and cons before deciding. Guaranteed future insurability, access to cash value, and final expenses are enticing. However, you may want to weigh out the disadvantages of the cost and poor rates of return too.

Pro: Guaranteed Future Insurability

As mentioned earlier, it may be beneficial to invest in child life insurance if your child has a serious medical condition or if the family has a concerning medical history. One of the best features of getting a child life insurance policy is the guaranteed future insurability.

Aflac’s juvenile whole life policy allows the child to be covered as long as premiums are paid, regardless of the child’s future health. As long as their premiums are kept current, they will be covered until their 25^th birthday. After that, the insured child can convert their existing in-force policy to an individual whole life policy, with up to double the face amount of their current term policy without having to provide evidence of insurability.

This means that even if your child develops a serious medical condition at a young age, which could make life insurance as an adult cost-prohibitive or difficult to obtain, he or she could still have coverage.

Pro: Your Child May Use the Cash Value Later On

Depending on the policy and company you choose, some life insurance policies for children grant the ability to claim cash value or take loans on the policy’s accrued cash value. If you opt for a policy that allows early access to cash value, the child may be able to use the extra funds to assist with college tuition, help with a down payment on a first home or other essential needs.

Pro: Helps Cover Costs in the Event of Death

While we hope no one faces the loss of a child, help with expenses may be a form of relief in a devastating time. Looking into life insurance for family members may help provide peace of mind. Some child life insurance policies may provide benefits that can help cover funeral costs. In other cases, you may be able to add a benefit rider to an adult plan that can help with these types of final expenses.

Con: Poor Rate of Return

Usually, children have lower rates of mortality, which in turn can create a poor rate of return on whole life insurance plans for children.³ This is something we recommend you consider before taking a leap and expanding your family’s life insurance.

Con: Long-Term Expenses

If you decide that child life insurance is the best route for your child, they may be subject to certain long-term expenses, like life-long premium payments. If you move forward with a child life insurance plan, premiums might stay consistent for the entire life of the child, depending on if you choose a term or whole life policy.

If you have already invested money into a child life insurance plan, it may not make sense financially to forfeit the policy early.⁴ This is another factor to consider before getting child life insurance.