Children’s Life Insurance: Which Plan is Best?

Illustration  Ted Bongiovanni
What plan is best
for your children?
Photo by Ted Bongiovanni

Which type of Life Insurance policy is best for your child? This is a tricky but important question. Let's break the answer down into three categories.

1. Permanent Life Insurance

This is the most expensive solution for a child, but it also offers the most comprehensive coverage. Permanent Life Insurance solutions for children include the following.

  • Universal Life — These plans can offer level cost of insurance with an optional savings component.
  • Non Participating Whole Life Insurance  These plans are fully guaranteed, have a guaranteed cash value, and can be paid up in 10, 15, or 20 years.
  • Participating Whole Life Insurance — These plans are generally the most expensive, but in addition to guaranteed premiums, these plans offer the highest cash values and increasing death benefits. Premiums for permanent policies can range from $15 a month per child, depending on coverage amounts and plan type.

2. Stand-Alone Term Policy 

These plans are less expensive and offer fewer features than Permanent plans. Also, if the coverage is not converted to a Permanent plan, it will eventually expire. Stand-Alone Term Policies for children include the following options.

  • Traditional Term Insurance  — A limited number of companies offer Traditional Term Insurance for children. The cost of these policies remains level for the initial term and increases as the insured ages.
  • Term Insurance with Built-in Critical Illness Coverage — Assumption Life and Industrial Alliance recently introduced Term policies for children with built-in Critical Illness benefits. Premiums on Term policies can range from $11 a month per child, depending on coverage amounts an the plan type.

3. Children's Term Rider

These policies must be added as a rider to an existing or new policy from a parent. They cannot be kept as a stand-alone policy. Consider the following factors for Children's Term Rider options.

  • The face amounts on these policies are more limited, usually ranging from $5,000 to a maximum of $30,000.
  • The coverage usually ends when the insured reaches 18. (Certain companies extend the expiry date to 21 or 25 if the child is in school.)
  • One rider can cover multiple children.
  • Costs generally start at $6 a month, depending on the coverage amount and plan type.

For more details, contact us at 1-866-899-4849, or visit our Whole Life Insurance Quote Page and our Term Life Insurance Quote Page.

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2 Comments

  1. Tony 10/16/2013 at 3:18 am

    Can I have more than one Children’s life insurance plan for my 6 year old son

  1. LSM Insurance 10/16/2013 at 5:23 am

    Yes you can have more than one life insurance policy on your child. But make sure any existing life insurance was mentioned on your second application. Insurance companies do not have a cap on how much they will cover the child for. This is based in part on how much the patent(s) are covered for.

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