Every parent wants their little ones to grow up happy and healthy. Purchasing a life insurance policy now can help ensure that your child is able to maintain cheap life insurance throughout their lifetime. But with so many companies offering policies, which is the best one for your child?
Let’s take a closer look at life insurance options for children and compare some of the best companies offering policies for minors. We’ll also learn a little more about the different types of life insurance and how life insurance payouts work for children.
Best Life Insurance for Kids:
- Best Overall: Mutual of Omaha
- Cheapest for Kids: Thrivent
- Best for No-hassle Coverage: Globe Life
- Best College Plan: Gerber Grow-Up
- Best for Complete Family Coverage: State Farm
5 Best Life Insurance Companies for Children
Most major life insurance companies provide special policies for those under the age of 18. Let’s take a look at some of the best life insurance options available for kids.
1. Best Overall: Mutual of Omaha
Mutual of Omaha offers parents an easy and convenient way to purchase life insurance for their children. Policies from Mutual of Omaha are available for children as young as 14 days old and benefits are available up to $50,000. Like its life insurance for seniors and older adults, there are no medical exams or tests to complete when you sign up for a child’s policy through Mutual of Omaha — just a simple health questionnaire.
Signing up is as easy as filling out an online form, and you can convert your child’s policy to cash value life insurance upon maturity as well. Easy, affordable and available across the country, Mutual of Omaha is our top choice for children’s life insurance.
2. Best for Affordable Coverage: Thrivent
Are you looking for the most affordable coverage possible? If price is your primary concern, consider a juvenile life insurance plan from Thrivent. Thrivent offers plans from just $12 per month and your premiums are guaranteed never to increase until your child turns 70 years old.
Policies are available for children as young as 14 days old, and you can purchase a lower-price juvenile plan until your child turns 14. If you want a shorter policy or a policy that only lasts until your child moves out, you can also choose a term life plan with 10 to 20 years of coverage.
3. Best for No-Hassle Coverage: Globe Life
Life insurance coverage for children is simple with Globe Life. Simply choose your benefit amount ($5,000–$30,000) and enjoy $1 premium for your 1st month. You can quickly sign up for coverage online and your coverage begins immediately without a waiting period.
You won’t need to fill out an invasive medical questionnaire, and there is no medical exam required for you or your child. With a simple application and hassle-free coverage, Globe Life provides an easy way to cover children up to age 23 with an affordable policy.
4. Best College Plan: Gerber Life College Plan
Funding a college education can be a major challenge, even for parents who begin saving as soon as their child is born. The Gerber Life College Plan is a life insurance policy that guarantees a set rate of return for your child’s college fund. Unlike other types of investing accounts (like IRAs or 529 college savings plans) the amount of money your Gerber Life plan will return won’t fluctuate depending on the movements of the stock market.
This can make it a safer investment for you and your little one. At the end of the policy’s term, your child will receive a guaranteed payout between $10,000 and $150,000 as long as you stay up to date on your premiums. Gerber Life college payouts are also more flexible than a 529 college account, and can be used for any type of college-related expenses.
5. Best for Complete Family Coverage: State Farm
If you’re looking for a single policy to cover your entire family, consider a plan from State Farm. State Farm’s Children’s Term Rider adds up to $20,000 in life insurance coverage for each child in your family. The single rider also applies to children that aren’t born yet, so the policy grows as your family does.
Newborns are covered once they turn 15 days old and coverage extends until your child turns 25. After this point, you can convert your child’s insurance to permanent coverage, or he or she can choose to purchase their own policy.
Life Insurance Premiums for Children
Like almost every other type of insurance, the specific price you’ll pay for your child’s insurance may vary depending on a wide range of factors. Your child’s age, health and your home location may all influence the price you’ll pay for coverage. This makes it especially important to get a few quotes from competing companies before you choose the right coverage for your little one.
|Age||Coverage Amount||Company||Monthly Premium Quote|
|1||$5,000||Gerber Grow-Up Plan||$3.40|
|1||$10,000|| Gerber Grow-Up Plan ||$6.79|
|1||$15,000|| Gerber Grow-Up Plan ||$10.19|
|1||$25,000|| Gerber Grow-Up Plan ||$16.30 |
|1||$50,000|| Gerber Grow-Up Plan ||$32.60|
Whole Life vs. Term Life
There are 2 major types of life insurance coverage: whole life and term life. Let’s take a look at the differences between them and how you can choose which type of insurance best fits your needs.
Most life insurance policies for children are sold as whole life policies. As the name suggests, a whole life policy protects your child from the day you sign onto a policy until the day they die in most circumstances.
Your insurance provider cannot cancel your whole life policy if your child gets sick, becomes disabled or gets into an accident. The only circumstance under which your insurance provider can cancel your coverage is if you elect to end your policy or if you miss your monthly payments. Payments are due every month, and many whole life policies include terms that say that your insurance company cannot change your monthly payment.
When your child turns 18, you may choose to transfer ownership of the policy over to him or her. In this instance, your child would need to keep making payments to maintain coverage. Anyone with a “vested financial interest” in a child can purchase a policy for him or her — typically, that means parents, grandparents or other direct relatives.
When you choose a whole life policy, your child is guaranteed a death benefit. The death benefit your child will receive will depend on the policy’s terms you’ll choose when you sign you’re your original policy. Standard whole life insurance policies include death benefits between $5,000 and $1 million.
This guaranteed payment means that whole life insurance is significantly more expensive than term life insurance policies. However, whole life insurance policies also include a cash benefit portion that may help you recapture a portion of what you spend in premiums.
Each month, a small percentage of the money you pay to your insurance company is put in a savings account that earns interest. You or your child (depending on who owns the policy) can access this money in a number of ways. You can borrow against the money in the account, you can withdraw it directly or you can borrow it as a loan with a low APR. However, this money can only be accessed while your child is alive — upon death you don’t receive both the death benefit and the savings account balance. You only receive the death benefit and the money in the savings account goes back to the insurance company.
Term life insurance policies are much more straightforward than whole life policies. When you sign onto a term life insurance policy, you’ll choose both a death benefit and a policy term. Most terms range 5–30 years. During your policy term, you’ll make payments to your insurance company to keep your coverage current.
If the policyholder dies during the duration of the policy’s term, you receive the death benefit laid out in the original terms of the policy. If the policyholder outlives the term, the life insurance company will close the policy and you won’t receive a payout. Because no payout is guaranteed (as with a whole life policy) term life insurance policies are significantly more affordable. Term life insurance policies also don’t include a cash portion.
Most life insurance companies won’t sell a term insurance policy specifically for a minor. However, you might be able to add your children to your term life insurance policy as the parent with an addendum called a “rider.” A rider is an extension of your policy that adds inclusions that aren’t written into standard policy terms.
For a few extra dollars per month, you may be able to add 1 child rider to your term life insurance policy that protects your child on your policy. Some select life insurance companies may also offer term policies up until your child turns 18.
3 Reasons to Buy Life Insurance for Your Child
No parent wants to think about the possibility of outliving their child. However, purchasing your child a life insurance policy comes with a number of benefits that can help secure a better financial future for them when they turn 18.
Let’s take a look at 3 benefits you’ll receive when you purchase a life insurance policy for your little one:
- Better insurability later in life: If your child becomes seriously ill or disabled later in life, buying life insurance can be prohibitively expensive. Buying a whole life insurance policy now means that your child will always have coverage, so long as your premiums are paid.
- Cash value: If you choose a whole life insurance policy, your policy will accrue a cash value as your child ages. Many policies (like the Gerber Life College Plan) include a guaranteed benefit by the time your child reaches a certain age for major expenses like education or buying a home.
- Peace of mind: Losing a child is one of the most painful and traumatizing things a parent can go through. With a low-cost life insurance policy, you can ensure that you’ll have money to cover funeral and living expenses while you heal from your loss if something does happen to your child.
Getting the Child Coverage You Need
Like almost every other type of insurance, every insurance company uses its own formula to calculate how much each policyholder will pay for insurance. It’s possible to find the exact level of coverage from 10 different insurance companies at 10 different price points. This is why it’s especially important to shop around before you choose an insurance policy. Get at least 5 quotes from competing insurance providers before you select a policy to ensure that you aren’t overpaying for your coverage.
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Finding the right company for your situation means considering all of your options and getting the right advice. Policygenius makes it easy to get personalized quotes from top insurers and apply for your best policy all in one place. Their combination of online tools and support from unbiased, licensed experts makes Policygenius the best site to help you get insurance right.