Child life insurance is a type of life insurance that provides coverage for children. It operates in much the same way as adult life insurance, with a death benefit being payable in the event of the insured child’s death. Some child life insurance policies, known as permanent coverage policies, such as whole life or universal life, also have a cash value component that accumulates over time.
Child life insurance policies generally do not require a medical exam for approval. Instead, the child’s eligibility for coverage is typically based on their age and any pre-existing medical conditions. These policies are typically issued as permanent coverage, meaning that they will remain in effect for the duration of the child’s life.
What Is a Children’s Term Rider?
A children’s term rider is an add-on to your existing life insurance policy that provides a limited amount of coverage for your eligible children, including biological, adopted, and stepchildren. In most cases, the coverage provided by a children’s term rider is capped at $25,000. If your child passes away before the term of the rider expires, you will receive a death benefit. Children’s term riders are a way to extend coverage to your children under your existing life insurance policy.
At the end of the term of a children’s term rider, the child may have the option to convert the rider into a permanent life insurance policy without undergoing a medical exam. Many insurance companies will issue a permanent policy with up to five times the face value of the rider.
When considering adding a children’s term rider to your life insurance policy, it is a good idea to compare options from multiple companies. Each rider may have different terms in terms of the ages at which coverage is available, the ability to convert to a permanent policy, and the maximum face value amount. It is important to carefully review these terms and choose a rider that meets your needs and those of your children.
Should I Get Life Insurance for My Child?
For some families, children’s life insurance can be a valuable investment. It offers financial security and ensures that your child will be insurable in the future, regardless of their health status. Because life insurance rates tend to increase with age, children’s life insurance can be a cost-effective way to provide lifetime protection for your child at a relatively low price. Overall, children’s life insurance can be a good option for families who want to provide financial protection for their children in the event of unexpected circumstances.
While children’s life insurance can provide some benefits, it also has its drawbacks. The coverage limits of term rider policies tend to be relatively low, and as the child grows older and becomes an adult, the death benefit may not be sufficient. Additionally, if the child is unable to convert the term policy into a permanent policy, the premiums paid may be better used to fund an emergency fund or a college education.
Ultimately, the decision to purchase children’s life insurance is a personal one that should be carefully considered. Before taking out a policy on your child or grandchild, consider the pros and cons and determine whether life insurance is a good fit for your family.
How We Chose the Best Life Insurance Companies
In order to compile our review of the best life insurance companies for children, we developed a comprehensive methodology that took into account the needs and priorities of parents and guardians. To gather this information, we conducted research using third-party consumer studies, including the 2021 U.S. Life Insurance New Business Study by J.D. Power and the 2021 Insurance Barometer Study by Life Happens and LIMRA. Through this research, we were able to identify key factors that parents and guardians consider when selecting a life insurance company for their children.3
We then gathered more than 50 data points on 91 life insurance companies, including ratings for the following factors:
- Financial strength
- Policy types and features
- Available riders
- Customer satisfaction
- Customer complaints
- Years in business
- Online tools
- No-exam options
In our review of the best life insurance companies for children, we took into account a range of factors that are important to parents and guardians. These included top ratings from AM Best, a low customer complaint rate, and a comprehensive selection of products and resources. We particularly valued companies that offered online quoting and application tools, transparent pricing, and options specifically for children. We also gave a higher rating to companies that provided accessible customer service through features such as live chat. To rank the companies we researched, we used the following weights for each customer-focused category:
- Customer education, application, and online service features: 32%
- Policy types, features, and riders: 29%
- Financial stability: 17%
- Customer satisfaction ratings: 15%
- Cost: 8%
Based on our research and analysis, we selected the top 21 scoring life insurance companies for review as potential providers of children’s life insurance. We examined the specific products offered by each company, including the types of policies available to children, whether children’s term riders are available for adult policies, and the terms of those riders. We also considered whether companies offered online quotes or online applications for children’s life insurance. Using this information, we determined which of our highest-scoring companies were the best options for children’s policies.