Tips for Buying Whole Life Insurance for Children

Depending on the insurer’s coverage limits, an individual may be able to purchase a juvenile whole life insurance policy for their child at any time between the child's birth and young adulthood. It is wise for parents who decide to buy whole life insurance for their children to buy a policy at the earliest age possible, as this can help capture low fixed rates.

Why might you want to buy a whole life insurance policy for your child?

Secure life insurance coverage early in case your child develops health conditions later in life
Obtain coverage at a lower rate than typically is available when purchasing whole life insurance coverage for an adult
Potential option to transfer ownership to the child, when the child becomes an adult

Your Child is Covered Regardless of Changing Health Conditions

Obtaining coverage at a lower rate than typically is available when purchasing whole life insurance coverage for an adult can be advantageous if your child becomes seriously ill later. Although it is uncomfortable to think about a child’s illness or death, it can be smart to have an insurance policy in case they do become ill and pass away. The benefits of a juvenile whole life insurance policy can help cover final expenses and parental time off from work.

You Lock in Lower Premiums the Sooner You Buy Whole Life Insurance

If you buy a whole life insurance policy for your child at a very young age, the premiums will generally be lower than if you waited until they were an adult to obtain coverage. In other words, by purchasing juvenile whole life insurance, you help lock in a lower premium, which generally will not increase. This can help prevent your child from not being able to afford a policy later in life.

Cash Value Grows

Juvenile whole life insurance policies may build cash value over the life of the policy as premiums are timely paid. This cash value can be used for college and other goals or needs that may arise in the future.

Transfer of the Ownership from a Juvenile Whole Life Insurance Policy to an Adult Whole Life Insurance Policy

When a child is covered by a juvenile whole life insurance policy reaches adulthood, the then-current parent owner may allow the child to become the new owner of the policy. After this transfer, the policy’s low premium will remain the same, with no decrease in the policy’s cash value.

Is a juvenile life insurance policy a standalone or rider to the parent’s life insurance policy?

It depends on what type of juvenile life insurance coverage you choose. Whole life insurance for juveniles is often a standalone product. Alternatively, a rider may be purchased as an add on to the parent’s life insurance policy. A rider offers insurance coverage before the child becomes an adult. While the child is covered by the rider, the insurance coverage can be converted to a whole life insurance policy with evidence of insurability.

Who can purchase juvenile life insurance for a child?

Only individuals with certain relationships to a child can purchase juvenile life insurance on a child's life1. Generally, this includes the child's:

Birth parent
Adoptive parent
Legal guardian
Grandparent*

*Some insurance companies may require approval from the child’s parent or legal guardian for the grandparent to buy life insurance on the life of their grandchild(ren).

Consult with a licensed insurance agent to further discuss juvenile life insurance.

Sources:

Office of the Insurance Commissioner Washington State, https://www.insurance.wa.gov/who-can-take-out-life-insurance-policy-children, July 28, 2023.

American Income Life articles are researched, written, and edited by multiple members of the American Income Life staff including, Marketing Specialists, Content Writers, Product Experts, as well as Legal & Compliance Professionals.

Categories: insurance, life insurance, whole life insurance

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