Child-Size Life Insurance Policies: Should I Insure My Child?

If you ever happen to be sitting with a group of financial advisors and want to make things interesting, ask them about the pros and cons of taking out life insurance policies for children—you’ll see fireworks! Not literally, of course. Debate-oriented fireworks.

There’s something of a “great divide” amongst financial advisors when it comes to this subject and there are fair points to be made on both sides. If buying a child life insurance policy is something that you’re considering, you’ll definitely want to hear out both sides, because any one financial advisor will probably only tell you their side and what they believe to be true.

What it really comes down to, though, is you and your situation. This is where the lines blur. Some situations, mostly medical in nature, definitely make a case for child life insurance. While others, not so much. It is true, though, that these policies are far from popular. In fact, for the last ten years and counting, the American Council of Life Insurers have reported that only 15% of all persons under the age of 18 have life insurance.  You can learn more about this & other life insurance policies at Suncorp, visit today & protect yourself & your family.

To help you gain an understanding of what both sides of the fence argue on this subject, I’ve put together a few of the key debate points for each side.


This is where child life insurance policies are considered a favorable option. If you have a child going through substantial childhood medical difficulties as a direct result of illness or disability, then their chances of finding their own policies later on in life are slim—at least, affordable ones.

In some cases, it’s much easier for the parents of such a child to simply purchase a whole life insurance policy when they’re young that the child can carry with them throughout their life. There are even some special branches of insurance designated specifically for these cases that require you to make the purchase before the child reaches a certain age. These “branches” vary from insurer to insurer, though, so it’s very important to do your homework and shop around. For example, some policies will offer a transfer option, where they offer a certain kind of insurance until the child comes of age and then the policy is transferred and altered, without additional fees or rate changes.

John Sestina, a financial advisor out of Ohio who is typically against the idea of child life insurance policies does admit that health problems do present a favorable case, “If your child has the potential for serious health problems, they’ll have to buy a ton of insurance—at least, a million dollars.” Obtaining that kind of coverage affordably would certainly be of benefit to anyone.


On the other side of the fence, you have two main arguments:

1)      Better Investments Exist

2)      It’s an Abuse of the System

Those that argue that child life insurance policies are a poor investment say so in a “generally speaking” manner, where certain instances of childhood illness don’t really come into play. After all, there’s a difference between establishing a nest egg for your child to use when they become an adult, if and when they continue to have medical issues, and your adult child trying to leave behind something substantial for their own family.

This is where this side makes their argument of: Why should parents invest in something that will never actually benefit the child? After all, life insurance only pays out once you’re gone. However, if you grow up with a substantial amount of medical history, how do you afford the rates later?

Of course, this is where the second part of the ANTI argument comes into play, as life insurance’s purpose is to provide for loved ones in the event of death. Some say that if a child with a terminal illness should pass, the family should be taken care of—some say that the family doesn’t need income replaced if a child passes, because a child is never the main income provider, making it an abuse of the life insurance system.

With these arguments in mind—what do you think?

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