Life insurance for kids

What is child life insurance?

Child life insurance is whole life insurance that’s specifically purchased on the life of a minor. Its premiums are generally lower than premiums for a comparable adult policy. The policy is typically owned by the purchasing adult until the child reaches the age of majority as defined by state law.

How does a child life insurance work?

When a minor child or grandchild is insured, the policyholder is generally the purchasing adult, the beneficiary is generally a parent or guardian, and the insured is the child. When the child reaches the age of majority, as defined by state law, ownership of the policy can be transferred to the child. At that point, the child can select the beneficiary.

Choose how to pay your child's premium?

When it comes to premiums, you can gift funds to your child or grandchild. That money can then be used to purchase a single-premium life insurance policy—for the same amount as your gift. With such a policy, no further premiums are required. But you can also select a whole life policy for a child with regular premium payments and make the premium payments on behalf of the child.

Can I cash out my child's life insurance policy?

Yes, as long as you remain the owner of the child’s policy, you can access the cash value that accumulates in a child’s whole life insurance policy. However, withdrawing cash may impact the policy's long-term growth and death benefit.

Can life insurance be bought for a baby?

Yes, life insurance can be purchased for a baby, locking in very low premium rates and providing coverage that will grow in value over the child's lifetime.

Life Insurance for grandchildren?

When a child is given the gift of life insurance, it often comes from grandparents. A gift that will last the child’s entire life has appeal since it enables grandparents to be with their grandchild in spirit through the most meaningful times in the grandchild’s life—marriage, purchase of a home, the birth of a child—even if they cannot be there in person.

Should I buy life insurance for my child?

A life insurance policy makes a wonderful gift since it can be with the child for a lifetime. Make sure you thoroughly understand the ins and outs of the policy before you make the purchase, though. If the policy lapses because you stop paying the premiums or because the person you expected to pay the premiums doesn’t, the money may go to waste. A New York Life agent will be happy to help you identify the right policy for your child and make sure the policy you purchase can be kept in place for the long term.

Pros and cons of child life insurance

Child life insurance provides lifelong financial protection, guarantees insurability, and builds cash value. However, it requires long-term premium commitments, and accessing the cash value will reduce the death benefit. Also, please be aware that the policy must be structured appropriately and will be subject to child insurance limitations. Consult your tax and legal advisor(s) if you have tax and legal questions.

Is children's term life insurance an option?

Since term life is a good option for adults, it’s natural to wonder if it might be a good option for children. In most instances, though, it is not. A whole life policy is a valuable gift for a child because it locks in low premiums for a lifetime, guarantees the child’s insurability, and builds cash value. Term life does none of this. It locks in premiums for the term only. It doesn’t guarantee long-term insurability. And it doesn’t build cash value. Because children’s term life insurance rarely makes sense, insurance companies don’t offer it. But some companies do offer parents with term policies a child term rider. The rider gives the covered child a modest term policy that will cover funeral and burial costs.

What is child life insurance?

Child life insurance is whole life insurance that’s specifically purchased on the life of a minor. Its premiums are generally lower than premiums for a comparable adult policy. The policy is typically owned by the purchasing adult until the child reaches the age of majority as defined by state law.

How does child life insurance work?

When a minor child or grandchild is insured, the policyholder is generally the purchasing adult, the beneficiary is generally a parent or guardian, and the insured is the child. When the child reaches the age of majority, as defined by state law, ownership of the policy can be transferred to the child. At that point, the child can select the beneficiary.

Choose how to pay your child’s premiums

When it comes to premiums, you can gift funds to your child or grandchild. That money can then be used to purchase a single-premium life insurance policy—for the same amount as your gift. With such a policy, no further premiums are required. But you can also select a whole life policy for a child with regular premium payments and make the premium payments on behalf of the child.

Can I cash out my child's life insurance policy?

Yes, as long as you remain the owner of the child’s policy, you can access the cash value that accumulates in a child’s whole life insurance policy. However, withdrawing cash may impact the policy's long-term growth and death benefit.

Can life insurance be bought for a baby?

Yes, life insurance can be purchased for a baby, locking in very low premium rates and providing coverage that will grow in value over the child's lifetime.

Life insurance for grandchildren

When a child is given the gift of life insurance, it often comes from grandparents. A gift that will last the child’s entire life has appeal since it enables grandparents to be with their grandchild in spirit through the most meaningful times in the grandchild’s life—marriage, purchase of a home, the birth of a child—even if they cannot be there in person.

Should I buy life insurance for my child?

A life insurance policy makes a wonderful gift since it can be with the child for a lifetime. Make sure you thoroughly understand the ins and outs of the policy before you make the purchase, though. If the policy lapses because you stop paying the premiums or because the person you expected to pay the premiums doesn’t, the money may go to waste. A New York Life agent will be happy to help you identify the right policy for your child and make sure the policy you purchase can be kept in place for the long term.

Pros and cons of child life insurance

Child life insurance provides lifelong financial protection, guarantees insurability, and builds cash value. However, it requires long-term premium commitments, and accessing the cash value will reduce the death benefit. Also, please be aware that the policy must be structured appropriately and will be subject to child insurance limitations. Consult your tax and legal advisor(s) if you have tax and legal questions.

Is children’s term life insurance an option?

Since term life is a good option for adults, it’s natural to wonder if it might be a good option for children. In most instances, though, it is not. A whole life policy is a valuable gift for a child because it locks in low premiums for a lifetime, guarantees the child’s insurability, and builds cash value. Term life does none of this. It locks in premiums for the term only. It doesn’t guarantee long-term insurability. And it doesn’t build cash value. Because children’s term life insurance rarely makes sense, insurance companies don’t offer it. But some companies do offer parents with term policies a child term rider. The rider gives the covered child a modest term policy that will cover funeral and burial costs.