Why some families consider coverage on a child
Families may consider a policy to provide funds after a child's death, obtain certain future insurability options where available, or use features of a permanent policy. Those potential benefits should be weighed against premiums, limitations, alternatives, and the family's broader financial priorities.
Questions to ask before buying
- What is the specific purpose of the policy?
- What are the premiums and how long are they expected to be paid?
- Are there guaranteed purchase or insurability options, and what are their conditions?
- If there is cash value, how does it grow and what fees or surrender rules apply?
- What alternatives could serve the same goal?
Do not confuse life insurance with a savings account
Permanent insurance may include cash value, but it is still an insurance contract. If the primary goal is education or general savings, compare purpose-built savings and investment options with qualified professionals before deciding.
Common questions
Why would someone buy life insurance for a child?
Reasons can include covering expenses after a tragedy, locking in certain insurability features where available, or using a permanent policy with cash value. Whether those reasons justify the cost depends on the family and product.
Is life insurance for a child the same as a college savings plan?
No. Life insurance and education savings accounts are different products with different purposes, tax rules, costs, and risks.
Should parents protect themselves before buying coverage on a child?
Many families prioritize adequate emergency savings and protection on the adults whose income or caregiving supports the household before considering coverage on children, but individual priorities vary.