Should I Buy Life Insurance for My Children?

Quick Answer: For most families, no — not as a first step. Children don’t generate income, so there’s no financial gap to replace if they pass away. The more urgent priority is term life insurance on the parents: coverage that protects the income, mortgage payments, childcare costs, and education savings that children depend on. Child life insurance has a narrow but legitimate use case — primarily when family genetics raise the risk of future insurability problems.

It is a question we hear occasionally (not frequently) from parents wondering if they should buy life insurance for their children. The thought goes against the grain of the concept of why we carry life insurance in the first place. To protect the family provider, the main breadwinner, or a spouse who provides caregiving services in the household— should they die and leave the family without financial support. They are the ones who are targeted to buy term life insurance to last until the children grow up, or to carry permanent life insurance coverage as a lifetime investment that could grow more valuable over time.

Do You Really Need Life Insurance for Children? The Answer is No.

Parents get emotionally hooked when they see television ads promoting the need for child life insurance to pay for funeral expenses if the child tragically died, or to act as a savings account for the future of that youngster. The rationale is that locking in life insurance rates during childhood is inexpensive. It is a surefire way to maintain insurability if a child develops illnesses later in life that would exclude their eligibility for life insurance.

The short answer to the question of whether you should purchase life insurance for a child is ‘NO’. But nothing is ever that black or white. Genetic conditions within family clusters are a real thing. A child of those parents might indeed be predisposed to developing that illness later on and that could be reason alone to purchase a term life insurance policy for that child as a protection for the ‘what if’ in life. But it’s not a compelling enough reason for most families.

Life Insurance Savings Plans versus 529 College Savings Plan

A term life insurance policy on a child is a simple, straightforward product. It could last up to 30-years, and ownership of that policy could be transferred to the minor in adulthood. But the child life insurance plan coverage touted by some companies is presented as a college savings plan, designed to help parents set aside money for their child’s college education. It specifically sells whole life insurance, a cash value product that features a savings component that is projected to grow over the years.

But the guaranteed “payout” at the policy’s maturity might not be as robust as expected, with the total value ranging from as low as five-figures, to as high as low six figures. It all depends on the performance of the life insurance company’s dividends, tied to their profits.

Plus, the cost of buying that more expensive whole life policy is much higher than the price of a level term life insurance policy with a potentially higher guaranteed level amount. That is why many financial experts are not big fans of these ‘whole life child life insurance’ policies.

Additionally, if you are like most American parents, you will probably start investing in a 529 College Savings Plan upon your baby’s birth to pay for a college education. It is a commonly used investment plan designed with educational tax breaks. The pros and cons of this plan versus child life insurance plans could be worthy of a longer discussion that you should probably have with your accountant or tax adviser.

Adults Need Life Insurance More Than Children

The bottom line is that on the topic of life insurance and children, adults need it much more than they do. That policy will act as an income replacement for your family, to cover the debt, and yes, to pay for future family expenses such as a child’s college tuition.

The data bears this out. According to the 2025 Insurance Barometer Study by LIMRA and Life Happens, 40% of adults say their loved ones would be barely or not at all financially secure if the primary wage earner died unexpectedly — and nearly half (47%) say their household would have trouble paying living expenses within six months.^¹ Term life insurance for families is what closes that gap. Coverage on the parents — not the children — is what keeps a household financially intact.

There is even a way to include your children under your term life policy by purchasing a “child rider” option to the contract. It doesn’t cost much to pump up that policy you buy on YOUR life that would have a small death benefit built in if your child passed away. You can opt for a child rider for all of your children.

But if there is a chance that your family’s genetic history might significantly increase the likelihood that your child will develop a debilitating medical condition that could exclude them from qualifying for life insurance as an adult, or of making that policy prohibitively expensive, you have a legitimate reason to buy a term life policy on your child. It could prove to be valuable insurance for the future.

To clarify, when the insured person is a minor, the purchasing adult generally owns the life insurance policy until the child reaches adulthood (dictated by each state’s law). At that point, ownership of the policy can be transferred to the child.

What Term Life Insurance for Families Should Look Like First

Before asking whether to buy life insurance for a child, every parent should have adequate term life insurance on themselves. Here’s the benchmark most financial advisors recommend for families with young children:

• Coverage amount: 10–15 times annual income, plus any outstanding debts (mortgage, student loans) and projected education costs per child.
• Term length: Long enough to cover the years your children are financially dependent — a 20-year term for parents in their 30s, or 30 years for younger parents with newborns.
• Policy type: Level term life insurance with a convertibility option, so you can lock in today’s rate and have the flexibility to convert to permanent coverage later without a new medical exam.

The 2025 Insurance Barometer Study found that insured parents are 23 percentage points more likely to feel financially secure than uninsured parents (71% vs. 48%).^¹ That gap starts with term life on the parents — everything else is secondary.

If you have more in-depth questions about why you are considering life insurance for your children, reach out to one of our licensed agents to help guide you. You can opt to speak to a live agent, shoot us an email, or start by filling out a free, no-obligation quote to compare instant rates from several carriers to get an idea of how much a term life policy for your child would cost.

Frequently Asked Questions

What type of life insurance should a family buy first?

Term life insurance on the primary earner — and ideally both parents — is the starting point for most families. It provides the highest amount of coverage at the lowest cost during the years when financial dependents (children, mortgage, debts) are at their peak. The 2025 Insurance Barometer Study found that nearly half of American families would struggle to pay living expenses within six months of losing the primary earner^¹ — term life insurance is the coverage that prevents that outcome.

Is there a better use of money than buying life insurance for a child?

For most families, yes. Contributing to a 529 college savings plan offers tax-advantaged growth specifically designed for education expenses. If the goal is savings, a diversified investment account will typically outperform the cash value component of a whole life policy over time. Life insurance on the child should not be the primary savings vehicle — it works best as a narrow risk-management tool for families with specific health history concerns.

What is a child rider on a term life insurance policy?

A child rider is an add-on to a parent’s existing term life policy that provides a small death benefit — typically $10,000–$25,000 — for any covered child (natural, adopted, or stepchild). It’s generally the most cost-efficient way to include children in a family’s life insurance coverage. The main restriction: most carriers require the rider to be added at the time the parent’s policy is purchased, before children are born or while they are still infants.

Can a child keep their life insurance when they grow up?

Yes, in most cases. A term policy purchased on a child can be transferred to the child when they reach adulthood. Some policies include a guaranteed insurability option, allowing the child to purchase additional coverage as an adult — regardless of health status — at set intervals. This is particularly valuable for families concerned about hereditary conditions.

How much term life insurance does a family need?

Most financial advisors recommend 10–15 times the primary earner’s annual income as a starting coverage amount, adjusted for outstanding debt (mortgage, student loans), the number of dependents, and projected education costs. A family with two young children and a $300,000 mortgage might aim for $1 million or more in total coverage between both parents.

When does buying life insurance for a child actually make sense?

The clearest use case is a family with a documented genetic history of conditions — certain cancers, heart disease, Type 1 diabetes, Huntington’s disease — that could make it expensive or impossible for the child to obtain coverage as an adult. Locking in a policy while the child is young and healthy guarantees a degree of coverage regardless of what develops later. Outside of this scenario, the financial case is generally weak compared to the alternatives.

References

¹ LIMRA and Life Happens. “2025 Insurance Barometer Study.” Life Happens, 2025.