Empower Blog
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August 21, 2022

Why Life Insurance for Kids Makes Sense

Is it worth the expense to take out a life insurance policy for your children? While there are life-long advantages your child can benefit from and situations when buying life insurance may be suitable for your child and your family, it’s important to do your research to ensure you are making the right decision for your situation.

Two Different Types of Children’s Life Insurance

Understanding the two types of life insurance you can purchase for your children is crucial. Each option has different advantages along with separate lengths of coverage and premium costs.

Whole Life

Whole life insurance, also called permanent insurance, is always in place. It will provide lifelong coverage as long as you pay your premiums as scheduled. This kind of insurance typically costs more; however, it also could provide a higher benefit amount, options to purchase more in the future without providing evidence of insurability, and possible accumulating cash values which can be used while living. Depending on the size of the policy, cash value accumulations could assist with college tuition, marriage expenses, purchasing a home or past down as a legacy.

As the owner of your child's policy, you can transfer it to them at any time, most commonly once your child becomes an adult and is ready to take over the cost of the premium.


This type of childrens life insurance is usually only available when added to a parent's life insurance as a rider that typically expires when your child turns 25. Adding a child rider is a cost efficient way to have the protection in place but again it will eventually expire.

This type of policy is often more affordable but may not reap as many benefits as whole-life policies.

Three Benefits for Purchasing Life Insurance for Your Child

Childrens life insurance is one simple way to begin investing in your child’s future. Here are some of the benefits of purchasing a policy for them.

1. Guaranteed Insurability as a Rider

Guaranteed insurability ensures your child will have coverage, even if they develop a health condition, and the option to buy additional insurance in the future without completing a medical exam, which is often a key reason parents purchase this kind of coverage. One thing to keep in mind is that riders are elected by the policy owner, and there is an extra charge for this.

With the recent Covid-19 pandemic and all the unknowns about the long-term effects of the virus, guaranteed insurability has become a central point of interest for parents wanting to ensure their child will always have life insurance coverage.

Something to think about: If your child was born healthy and does not have a high genetic probability of developing a medical condition, there is a high likelihood they will have no problem obtaining affordable life insurance on their own in their 20s or 30s.

2. Lower Rates

A child will have a much lower life insurance policy rate than an adult. Often rates increase with each year of life. By purchasing a policy when they are young, their rate will be much lower than it would be in their later years or as adults. These rates are locked in for life on the policy purchased, a key benefit of purchasing a policy for children.

Something to think about: Healthy applicants in their 20s are likely to secure competitive rates, so if you think your child won’t need to find life insurance with a pre-existing condition, a child life insurance policy might not be needed.

3. Cash Value

Whole-life children's insurance policies have the potential to grow cash value, which could be used for living benefits such as, college tuition, marriage expenses, down payment on a home. Depending on how you withdrawal the funds would determine if taxes would be owed.

Something to think about: If setting up an investment account for your child is your main goal, there may be other types of investment opportunities that would better suit your situation. Life insurance cash value accounts rely on you paying premiums, and can some time to grow.

Getting Started

Most parents and grandparents find the benefits of childrens life insurance make purchasing a policy worthwhile. Contact the CommunityAmerica Insurance Agency if you are interested in learning more about child life insurance. Our expertise will help guide you in navigating what insurance is right for your family and finding a policy that fits you best.


We all want to protect our childrens futures. Exploring a childrens life insurance policy is an excellent way to do so.

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CommunityAmerica Insurance Agency

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The CommunityAmerica Insurance Agency is dedicated to helping you protect what matters most, with insurance offerings including auto, home, life and much more.

Life Insurance products are offered by Copper Financial Network, LLC (“Copper Financial”), in its capacity as an insurance agency. Other insurance products may be sold through CommunityAmerica Insurance Agency, LLC, a wholly owned subsidiary of CommunityAmerica CUSO One, LLC and a licensed insurance agency in Missouri and Kansas. Copper Financial Insurance Advisors are only authorized to offer non-securities insurance products. Copper Financial is a wholly-owned subsidiary of CommunityAmerica Credit Union.

Investment and insurance products, including annuities:

Are Not Deposits

Are Not NCUA or otherwise Federally Insured

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