What is the Best Way to Cover Your Children with Life Insurance?

Raising a Family

When it comes to covering children with life insurance there are two common methods. The first is known as a child term insurance rider. This means you can add your children under your existing policy. This is called a rider. Child term riders can vary from carrier to carrier as to how much coverage they will provide. Insurance carriers will also outline the maximum age that they will provide the coverage up to. Keep in mind, if you cancel a life insurance policy and have a child term rider on your policy, the coverage for your children will also be terminated. One of the more appealing reasons for having a child term insurance rider is that the cost is usually very low to add your children. Some life insurance policies may even stipulate that the child rider will also cover future children that are not yet born. So, it’s a cost effective way to cover yourself and children under your existing term life insurance policy.

The second common method to obtain life insurance coverage, especially for very young children, is to purchase a whole life insurance policy for your child. When your children are very young, the cost of insurance will be very affordable. A great benefit with whole life policies is the life insurance can stay with that child as long as they live, if they wish to keep the coverage. When a child reaches the age of majority, which is usually age 18 in most states, they can legally take ownership of the life insurance policy and again continue that policy for as long as they wish. The other nice feature with whole life insurance is that the price you pay stays that same price for the life of the policy. Another benefit with whole life insurance is the cash value that accumulates over time. This is money that you can borrow from for any reason in the future.

Planning for your children’s future is a vital part of protecting their financial needs. I’m here to help you with any questions you may have. 

About the author: Dan Cody has been in the life insurance business for over 7 years. He loves playing a variety of instruments including the guitar, bass, drums, and piano. He also supports cancer research foundations and volunteers at local pet shelters. Dan enjoys helping customers understand life insurance, so they can find a solid policy that fits their needs. You can reach Dan at 1-800-651-1953 or DCody@Pivot.com.