Life Insurance for Children

A life insurance policy purchased on a child life will likely be an asset well into their adulthood. As the child grows older, cash value accumulates which can be invested or withdrawn as a lump-sum payment.
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Written by Brian Greenberg
CEO / Founder & Licensed Insurance Agent

Last updated: July 19th, 2022

Reviewed by Grant Desselle
Licensed Insurance Agent

Yes! Obtaining life insurance for kids can provide them coverage and benefits early in life at a much lower cost than waiting until they are older.

The Best Life Insurance Providers for Children

While Gerber life Insurance company is perhaps the best known provider of juvenile life insurance in the industry, Mutual of Omaha is another strong, reputable company that provides life insurance for children.

There are dozens of other companies that provide life insurance for children, but since we only quote top rated providers, we have narrowed our guide down to Mutual of Omaha (our #1 rated insurance provider overall) and Gerber.

Sample rates - $25,000 for a 6 month year old Boy from Alabama
CompanyIssue AgesCoverageSample cost
Mutual of Omaha life insurance company14 days – 17 years$5,000 – $50,000$8.50/month
Gerber life insurance company14 days – 14 years$5,000 – $50,000$15.70/month

Life Insurance for Children by Mutual of Omaha

Overview

United of Omaha (which is related to Mutual of Omaha) is comparable to Gerber in the sense that it also provides a relatively low-risk policy. United of Omaha does not require a medical examination, its benefits never decrease, and its rates never increase with age.

Mutual of Omaha has a limit of $50,000 but more coverage can be purchased in the future even without evidence of insurability.

Children’s Whole Life is a whole life product that can begin a lifetime of coverage for children or grandchildren.

In addition to the death benefit, the Guaranteed Insurability Rider can help protect the future insurability of the child.

PROSCONS
No medical exams, just a few health questionsIf money is tight, life insurance for your child could be an unnecessary expense
Builds cash value, more than Gerber’s plan
Rates never increase, and benefits never decrease
Additional coverage can be acquired during the child’s life

Mutual of Omaha – Children’s whole life insurance

Overview:

Children’s whole life insurance is the only life insurance type available by Mutual of Omaha for children just 14 days old to age 25.

While Gerber is the perhaps the most well-known company that provides life insurance for children, Mutual of Omaha’s pricing is usually less than 50% cheaper.

What it offers:

It offers coverage amounts from $5,000 to $50,000 with the option to purchase additional life insurance as the child grows older.

Since it’s a whole life insurance policy, it builds cash value, there are no medical questions or exams involved, and the price will never go up.

The policy will never be cancelled due to health conditions or other factors, only if you decide to cancel the policy.

Life Insurance for Children by Gerber

Overview

United of Omaha (which is related to Mutual of Omaha) is comparable to Gerber in the sense that it also provides a relatively low-risk policy. United of Omaha does not require a medical examination, its benefits never decrease, and its rates never increase with age.

While Gerber initially offers a coverage limit of $50,000, Mutual of Omaha has a limit of $30,000 but more coverage can be purchased in the future even without evidence of insurability.

Children’s Whole Life is a whole life product that can begin a lifetime of coverage for children or grandchildren.

In addition to the death benefit, the Guaranteed Insurability Rider can help protect the future insurability of the child.

ProsCons
No medical exams, just a few health questionsThe cut-off age for the child to be insured is 14 years old, a few years younger than Mutual of Omaha’s plan
Coverage amount doubles when child reaches age 18While Gerber’s plan builds cash value, it builds less than Mutual of Omaha’s plan
Builds cash value
Rates never increase, and benefits never decrease

Gerber – Grow-Up life insurance plan

Overview:

Gerber is most well-known for its trademark ‘Gerber Life Grow-Up Plan’ that is specifically designed to provide whole life insurance coverage for children.

Gerber plans tend to accumulate less cash value when compared to some other options, the monthly rates are very low.

What it offers:

It offers coverage amounts from $10,000 to $50,000 with a unique feature that doubles the coverage when the child reaches age 18.

The policy builds cash value, like most whole life insurance products, but Gerber’s plan builds less cash value than others, such as Mutual of Omaha’s whole life insurance plan for children..

The policy will never be cancelled due to health conditions or other factors, only if you decide to cancel the policy.

Benefits of buying life insurance for a baby

The chances of a healthy baby dying are statistically very low.

Furthermore, a baby is obviously not an individual who has to worry about providing for any dependents in the event of their death. Though funeral costs and future income are among the primary reasons an adult would want to buy life insurance, there are other reasons as well that are uniquely applicable to children.

Guaranteed insurability:

The ability to qualify for life insurance depends upon a number of different conditions. An individual’s health and age can tremendously impact their ability to qualify. Naturally, when someone is a baby, they are the youngest and they will ever be.

Babies have the longest amount of life left to be lived. In the eyes of an insurance company, this means they will not have to “cash in” on their policy for a very long time. Because babies are such low-risk life insurance policyholders, they are essentially guaranteed to qualify for nearly all possible life insurance policies (usually after they are 14 days old).

The lowest possible monthly rates:

In addition to being able to qualify for life insurance in general, babies are also able to qualify for the lowest possible rates. One of the reasons that many parents consider getting life insurance for a newborn baby is that they have a unique opportunity to “lock in” the lowest monthly rates on the market.

By having these rates locked in, your baby will be protected from rate increases that will inevitably happen as they get older or as their health begins to worsen over time. Not only will the monthly cost of life insurance be less for an individual who qualifies for a plan early in life, but the total cost of the plan might end up being less as well.

A potential savings vehicle for the future:

Life insurance is about more than just financial security. Life insurance can be a very practical vehicle that enables financial growth as well. In fact, many individuals buy life insurance because they will not only be able to provide for their loved ones in the event of their death, but because permanent life insurance policies can generate a respectable return on investment.

The savings component of whole-life (permanent) insurance policies is tax-deferred and can often outperform other conservative saving vehicles. Depending on the specific policy you end up choosing, life insurance can be used a vehicle that can help save for your child’s college tuition or other future financial goals. The ability to be saving while also staying protected makes life insurance a particularly attractive financial asset for many parents and grandparents.

Maximum amount of time for growth:

The savings component of whole life insurance is known as cash value. As is the case with most financial assets, cash value is something that increases over time. Naturally, the longer you have a given life insurance policy, the more amount of time you will have to let your policy’s cash-value grow. By purchasing life insurance for your newborn baby, you will be able to maximize the amount of time their cash value can increase.

Though there are certainly many reasons to buy life insurance for your children, there are of course also some reasons not to buy life insurance for your children. When evaluating the pros and cons of children’s life insurance, it is important to consider the alternative options you might have available.

Frequently asked questions

At True Blue, we are transparent and honest. We understand life insurance is a big financial decision, and we would never pressure you in making a decision.

For this reason, we’ve provided additional information with questions we often get asked, so you can be more informed and make your own decision.

If you’d like to speak with a licensed agent, give us a call at 1-866-816-2100. Our agents will be able to answer any life insurance questions you may have.

Should I get life insurance for my child?

Yes! Obtaining life insurance for kids can provide them coverage and benefits early in life at a much lower cost than waiting until they are older.

Your child doesn’t need life insurance for the same reasons you would buy life insurance for yourself. It has no spouse or dependents, but there are other reasons you should consider.

The child will lock-in the lowest life insurance rates possible, and since life insurance for children are not level term life insurance (life insurance for a specific period of time), the child can carry the insurance policy for their entire life.

The insurance plan will accumulate cash value, and while this cash value would not yield the same result as depositing the premium in a bank account instead, over time it will accumulate and it can be invested in stocks and other options.

Aside from the small side benefits, the biggest benefit of life insurance will always be that in case your child does decease, the financial burden that comes with it will be lifted off your shoulders.

While these various facts are advantageous, ultimately whether or not you should get life insurance for your child depends on your situation.

If money is tight, life insurance for your child could be an added unnecessary expense.

Can I get life insurance on my grandchild?

It’s no surprise that grandchildren are often the biggest joy of a grandparent, and as a result, grandparents often want to pave the road to a more secure future for their grandchildren.

Grandparents are eligible to purchase life insurance for their grandchildren, although whether they need the parent’s permission depends on their state.

If you – as the grandparent – buy life insurance on your grandchild, you will be the policy holder. You will be in responsible of making the premium payments, and you will be able to choose the beneficiaries.

Is cash value life insurance a good investment?

Life insurance that builds cash value is a wonderful benefit, but if your main goal is to create a financial nest for your grandchild, there are other investments that could prove more effective.

To give you an example, a $20 per month policy will grow to about $8,800 in cash value over 20 years. Considering you paid a total of $4,800 in premiums over that time, that is a net rate of return of about 4.7% per year.

Almost all of the growth in cash value takes place in the last ten years of that period. If you were to look at the same policy halfway through the term, even though you would have already paid $2,400 in premiums, you would only be able to access about $2,700 in cash value.

Doing the math, that’s an annual return of 1.94% – which is typically less than the annual rate of inflation.

With mutual funds and other investment options, investment returns are never guaranteed, but a 10% annual return is not uncommon.

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  • Written by

    Brian Greenberg

    CEO / Founder & Licensed Insurance Agent

    Brian is the founder and CEO of Insurist and carries Life, Health, and Property & Casualty licenses in all 50 U.S. states. Since 2013, Brian has been a member of Million Dollar Round Table, a designation for the top 1% of financial advisors worldwide. Brian has been featured in Yahoo! Finance, Money.com, Entrepreneur.com, Life Happens, Forbes, MSN, and Good Financial Cents. Brian’s goal is to show customers the best products, the quickest answers to their questions, and provide expert advice.

  • Reviewed by

    Grant Desselle

    Licensed Insurance Agent

    Grant's past experience includes work as a licensed sales agent for Hagerty Insurance. He has reviewed thousands of existing auto policies across the nation and issued hundreds of new ones on everything ranging from classic cars undergoing restoration to modern exotics and motorcycles.

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