How much life insurance should I get for my child?
Asked by: Blanche Hyatt | Last update: December 18, 2025Score: 4.8/5 (24 votes)
Is it normal for parents to have life insurance on a child?
However, many parents and guardians also purchase life insurance for their children to provide them with coverage and financial support later in life. Purchasing a whole life or term life policy with a conversion rider is ideal if you intend to transfer the policy to your child once they're old enough.
Should I put my kids as beneficiaries on life insurance?
Pros and cons of designating a minor child as a beneficiary
This can give them the financial help they need once they become a young adult. The main disadvantage, however, is that your child won't have access to the money until they turn 18 or 21, depending on your state.
Do children need whole life insurance?
Yes! Whole life insurance is an extremely good plan to buy for your child since it is an extensive life insurance policy that fully covers their life for as long as a 100 years. It saves money for them based on the regular and fixed premiums you invest in it.
How much life insurance should you have for your child?
To give your child a healthy amount of financial security, you might consider $25,000 to $50,000 in coverage – a nice leg up on the future. The more coverage you buy, the bigger the policy's cash value can become.
5 Reasons To Buy Whole Life Insurance For Children
At what age should you get whole life insurance?
As we age, we're at increased risk of developing health conditions, which can result in higher mortality rates and higher life insurance rates. You'll typically pay less for life insurance at age 25 than at age 40. Waiting until age 60 may mean an even bigger rate increase and limited policy options.
Why is it unwise to buy life insurance for a child?
The death benefits on children's life insurance policies are typically smaller than adult policies; they may be insufficient to cover the child later in life. While whole life policies have a cash value component that can grow, it's typically not the most advantageous investment option.
How should I split my life insurance beneficiaries?
You can name more than one beneficiary for both the primary and contingent categories. If you do, you'll also need to specify how much of the death benefit should go to each. Let's say you have two beneficiaries and want the death benefit to be split equally between them. You'd specify that each should receive 50%.
What are the three types of life insurance?
There are five main types of life insurance: Term life insurance, whole life, universal life, variable life, and final expense life insurance. Each type of life insurance is designed to fill a specific coverage need.
What does Dave Ramsey recommend for life insurance?
Core Ramsey Teaching: You only need life insurance while you have people depending on your income. Buy a 10–20-year term policy worth 10–12 times your annual income. Since life insurance is only for the short-term, you should only buy term life insurance. (Hence the name.)
How much a month is a $500,000 life insurance policy?
A $500,000 whole life insurance policy costs an average of $451 per month for a 30-year-old non-smoker in good health. If you get whole life insurance, the premiums you'll pay may vary based on factors like your age, health, gender, and the type of policy you get.
Do you pay taxes on life insurance?
Generally, life insurance proceeds you receive as a beneficiary due to the death of the insured person, aren't includable in gross income and you don't have to report them. However, any interest you receive is taxable and you should report it as interest received.
Can I cash out my child's life insurance policy?
Unlike with term life insurance coverage, whole life insurance for children accrues a cash value as you continue to pay the premiums. This cash value can be borrowed against or, upon adulthood, be received as a lump sum upon surrender of the life insurance policy.
Can a parent take out a life insurance policy on a grown child?
Getting a Live Insurance Policy for an Adult Child
A parent must prove insurable interest to get a policy for an adult child.
What happens to a child's life insurance policy when they turn 18?
Once your child becomes an adult, you can transfer the policy to them. Adult children may be able to maintain these policies until the child is between the ages of 18-25. After that, they can turn their policy into an individual whole life insurance policy.
Should my child be primary or contingent beneficiary?
Do you have a contingent beneficiary in mind if you decide to name your child/children as your primary beneficiaries? Remember that you always want to name contingent beneficiaries so your estate isn't tied up in probate if your primary beneficiary isn't able to receive assets for any reason.
Can a will override a life insurance beneficiary?
Does a will supersede a life insurance beneficiary? A will won't supersede the beneficiaries listed on a life insurance policy. In most cases, the beneficiary listed on the life insurance policy has the right to claim the payout regardless of the instructions in the will.
When a beneficiary dies, who gets the money?
The easiest way to think of a per stirpes designation is this: if a beneficiary dies before you do, their share of your estate will automatically and evenly go to their descendants, their children or child.
Is life insurance for a child worth it?
Key Takeaways. Life insurance for children offers lower premium rates, lifelong coverage, and the potential to secure additional coverage as they grow older. It can provide financial protection for final expenses, relieving parents and family members of the burden during a difficult time.
At what age should you drop life insurance?
At What Age Is Life Insurance No Longer Needed? Life insurance is no longer needed for many people once they reach their 60s or 70s. At this point they have retired, their kids have grown up, and they've paid off their mortgage and other debts.
Why is life insurance not a good investment?
The cash value is slow to grow
Eventually, a higher percentage of your premium will go toward your cash value. But this takes a while, so it can take 10 to 15 years (or even longer) for you to build up enough cash value to borrow against.
At what point is life insurance not worth it?
When is term life insurance not worth it? Term life insurance probably isn't worth the costs if you don't have any significant debts to pass on to your loved ones or you don't have dependents or a spouse that you'd leave in a bind by passing away.
What does Colonial Penn give you for $9.95 a month?
We offer Guaranteed acceptance whole life insurance for those ages 50-85 (in most states) with options starting at $9.95 a month—ease the burden of final expenses and get back to living life on your terms. Colonial Penn's® popular guaranteed acceptance whole life insurance coverage rates are offered in units.
How much does a $100,000 whole life insurance policy cost?
What is the average cost of whole life insurance per month? Quote costs vary widely depending on the coverage amount and applicant's age, medical status, and other terms and factors. A recent survey found that a 20-year-old female could pay about $55/month for $100,000 of whole life coverage7.