1. What Child Insurance Is
Child insurance in the U.S. usually means a life insurance policy purchased for a child (by parents or grandparents). It’s not very common, but it exists.
Two main forms:
- Child life insurance policy: A permanent life insurance policy bought in the child’s name.
- Child rider: An add-on to a parent’s life insurance policy that provides a small benefit if the child passes away.
2. Types of Child Life Insurance
a) Whole Life for Children
- Coverage lasts for the child’s lifetime.
- Builds cash value (like a savings/investment account).
- Premiums are locked in at a low rate (since children are young and healthy).
- Can be transferred to the child when they become an adult.
b) Term Rider (Child Rider)
- An add-on to a parent’s policy.
- Provides a small death benefit (often $5,000–$25,000) for each child.
- Very inexpensive but expires when the child reaches a certain age (often 25).
3. Why Parents Buy It
- Future insurability: Guarantees the child has coverage even if they develop health problems later.
- Cash value accumulation: Some parents see it as a long-term savings tool.
- Funeral expenses: Provides financial help in the tragic event of a child’s passing.
4. Costs
- Whole life for children can start as low as $5–$20/month for small coverage amounts (e.g., $25,000–$50,000).
- Child riders typically cost $2–$5/month per child.
5. Pros & Cons
✅ Pros:
- Locks in low premiums for life.
- Provides guaranteed insurability.
- Cash value can be borrowed against later.
- Inexpensive for small coverage.
⚠️ Cons:
- Children rarely need life insurance (low financial dependency).
- Returns on cash value are usually modest.
- Money might be better invested in 529 college savings plans or other investments.
- Limited death benefit amounts.
6. Providers in the U.S.
- Gerber Life Grow-Up Plan (one of the most well-known).
- Mutual of Omaha, State Farm, Globe Life, and Foresters Financial also offer child policies or riders.
✅ Bottom Line:
Child insurance can make sense if you want to guarantee future insurability or lock in very low rates for life. However, most financial experts suggest prioritizing parental life insurance + college savings over child-specific life insurance.