Should You Buy Life Insurance for Your Baby or Child?
Learning goal: Weigh the reasons for and against life insurance on a child, and know why advisors put parents' coverage first.
Short answer
Most insurance advisors suggest spending your budget on life and disability insurance for the parents first, because losing a parent's income does far more harm. A small policy on a child can help with funeral costs or lock in the ability to buy coverage later. A children's rider on a parent's policy is a common, lower-cost way to do it.
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On this page
The Fuller Picture
A parent's term policy can often add a children's rider, which provides term coverage for each child, typically until 21 or 25. Some families buy a whole life policy on a child to teach saving, but it costs more. Insurers limit children's coverage, and only parents or guardians can generally buy it.
Key Takeaways
- Triple-I: most advisors recommend buying life and disability income insurance on the parents first.
- Reasons for a child's policy include funeral costs and guarding the child's future insurability.
- Texas: a children's rider provides term life insurance for your children, typically until they turn 21 or 25.
- Washington: in most cases only birth or adoptive parents or legal guardians can insure children under 17.
- Insurers can refuse coverage above their maximum for children.
Real-World Example
Chris
Chris has a newborn and is pricing life insurance. Chris buys a 20-year term policy on each parent first, then adds a small children's rider to Chris's policy, which covers the baby until age 25 for a few dollars a month, rather than a separate whole life policy.
Common Mistakes
- Insuring the child before the parents.
- Buying a large whole life policy on a child without comparing a rider.
- Forgetting to update beneficiaries after the birth.
- Not checking the rider's age limits.
Interactive Exercise
Before Buying a Child's Policy
Check these first.
Tick each step as you do it. Your checklist is saved in this browser.
Knowledge Check
Question: What do most insurance advisors suggest new parents insure first?
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Questions to explore next
Questions readers often ask next about this topic:
- Should I buy life insurance for my baby?
- What does a children's rider cost?
- How long does a children's rider last?
- Can grandparents buy a policy for my child?
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The factual claims on this page were checked against these sources. Rules and figures change, so check the source itself if you need to confirm the current version.
- iii.orgShould I buy life insurance on my child's life? · Insurance Information Institute (Triple-I)
- tdi.texas.govLife insurance guide · Texas Department of Insurance
- insurance.wa.govWho can take out a life insurance policy on children? · Washington State Office of the Insurance Commissioner
Educational information, not advice: This lesson is for general education only, not legal, financial, or insurance advice. Actual coverage, discounts, and requirements depend on your policy’s wording, your insurer, and the laws of your state. Confirm specifics with your own insurer or a licensed agent before making a decision. Insurpedia does not sell insurance and does not recommend specific insurers. Guidance is from the Insurance Information Institute, the Texas Department of Insurance and the Washington Office of the Insurance Commissioner. State rules vary. Educational information, not financial advice.