Do Your Kids Need Life Insurance?

When you have a child there are a lot more things to consider in life – especially when it comes to your insurance needs. Whenever you welcome a baby into the world most parents begin to take their life insurance options a lot more seriously. One of those considerations is whether or not to take out a life insurance policy for your child as well as yourself.

In this post we’ll take a look at life insurance policies for kids – what they entail, their benefits and how to decide if it’s time to get one.

What a Kids Life Insurance Policy Includes


Kids life insurance policies aren’t very different from those designed to cover adults. These policies are typically available to children aged two weeks to 18 years old. They are meant to provide a financial safety net in the event that a child should pass away.

The Benefits of a Child Life Insurance Policy

Death Benefit – Should your child pass away the death benefit would be paid out by the insurer to cover funeral costs and outstanding medical expenses. The amount of the death benefit varies per policy.

Child Won’t Be Denied a Policy in the Future – In the event that an already insured child develops an illness they can still retain their policy into their adulthood.

Fixed Rate for the Future – As mentioned above once the child becomes an adult they can continue to maintain their policy on their own as an adult, including the fixed rate.

Can Build Cash Value – This isn’t the main benefit of life insurance for kids, but building the cash value of a policy is a residual benefit. The cash value can be borrowed against or a portion can be cashed in if needed.

Should You Get Life Insurance for Your Kids

If you have the means to do so then extra coverage is never a bad idea. Fortunately, there’s only a 1 in 3,000 chance of a child dying before age 18, but being prepared for the unthinkable means there’s one less thing to worry about during an extremely trying time.

According to a survey of over 1,000 funeral homes conducted by eFuneral, the average cost of a funeral in 2012 was over $8,500. There are many affordable kids life insurance policies with death benefits of $10,000 or more.

However, if you can only afford to cover one person in your household, forgo the kid’s life insurance and get the breadwinner of the family covered. The death of a parent has a much larger financial impact on a family, is more likely and unfortunately many adults are under insured or not insured at all. First make sure both parents have adequate life insurance coverage, then consider insuring your kids.

An Alternative Option

Another option in addition to a separate life insurance policy is adding a rider to the policy of a parent. A child rider can be added to cover one or more dependents. A small premium paid once a year will offer a single death benefit in the event any of the dependents should pass away.

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