What Is Whole Life Insurance for Children?

Whole life insurance for children is a permanent life insurance policy purchased by a parent, guardian, or grandparent on behalf of a child, typically under the age of 18. These policies:

• Provide lifelong coverage

• Accumulate cash value over time

• Require fixed premiums

• Can be transferred to the child when they reach adulthood

The coverage is typically between $10,000 and $50,000, and some policies may offer riders or options to increase the benefit later in life.

Key Features of Child Whole Life Insurance

1. Permanent Coverage

Unlike term insurance, whole life policies do not expire as long as premiums are paid. The child is guaranteed lifelong protection.

2. Cash Value Growth

Part of your premium goes into a cash value account that grows over time at a guaranteed rate. This can be borrowed against or withdrawn in the future.

3. Guaranteed Insurability

Even if the child develops a serious illness later in life, they will not be denied coverage or face increased premiums.

4. Level Premiums

Once you purchase the policy, the premiums remain locked in for life—no matter how long the child lives or how their health changes.

Why Buy Whole Life Insurance for a Child?

Lock in Low Rates Early

Since children are young and healthy, premiums are extremely low—often as little as $5 to $20 per month.

Future Financial Planning

By the time the child becomes an adult, the policy may have built up thousands in cash value, which can be used for:

• College expenses

• Buying a home

• Starting a business

Guarantee Insurability

 

If the child develops a health condition like diabetes, heart disease, or cancer later in life, they may be uninsurable. Early whole life insurance locks in their eligibility permanently.

Transfer Ownership

Most policies allow you to transfer the policy to the child when they turn 18 or 21, giving them full control of a valuable financial asset.

Funeral and Burial Costs

While it’s difficult to imagine, in the rare event of a child’s death, the policy helps cover the emotional and financial burden of final expenses.

Disadvantages and Considerations

While there are benefits, it’s important to understand the limitations and potential drawbacks.

Lower Investment Returns

Cash value growth is usually conservative. Compared to investing in a 529 college savings plan or mutual funds, the return may be lower.

Opportunity Cost

The money used for premiums could be invested elsewhere for potentially higher gains, such as in stocks or education savings.

Not a Necessity

Most children don’t need life insurance because they don’t have dependents. The policy is often more of a financial tool than a necessity.

Surrender Charges

If you cancel the policy early, there may be fees or penalties that reduce the cash value you receive.

Best Providers of Whole Life Insurance for Children

Here are some of the top companies offering whole life insurance plans tailored for children under 18:

1. Gerber Life Insurance

• One of the most well-known child life insurance providers

• Offers the Grow-Up® Plan

• Coverage: $5,000–$50,000 (automatically doubles at age 18)

• Fixed premiums

• Policy ownership can be transferred at age 21

Pros: Strong brand, competitive rates, automatic benefit increase
Cons: Limited customization

2. Mutual of Omaha

• Offers simplified whole life coverage for children

• Coverage up to $50,000

• Builds cash value and has loan options

Pros: High reputation, solid cash value growth
Cons: May require more paperwork than competitors

3. Globe Life

• Offers $1 starting rate promotions

• No medical exam required

• Coverage up to $30,000 for children

Pros: Easy to apply, flexible payment options
Cons: Smaller death benefits

4. State Farm

• Offers child life insurance riders and standalone policies

• Competitive premium pricing

• High financial strength ratings

Pros: Reliable customer service, can bundle with parent’s policies
Cons: Must work with an agent

5. Foresters Financial

• Offers participating whole life policies

• Eligible for dividends, which may enhance cash value or reduce premiums

• Comes with added member benefits like scholarships

Pros: Unique member perks
Cons: Dividends are not guaranteed

READ MORE: Why Life Insurance Is Important for Seniors Over 60

How Much Does Whole Life Insurance for Children Cost?

Premiums depend on the child’s age, gender, and the amount of coverage. Here’s a rough idea of typical monthly costs for $25,000 in coverage:

The earlier you purchase the policy, the cheaper it will be in the long run.

How to Apply

1. Choose a Reputable Insurer
   Look for strong financial ratings (A or better from A.M. Best).

2. Compare Quotes
   Use online comparison tools or consult with an agent.

3. Provide Basic Info
   Most child policies do not require a medical exam—just general health information.

4. Set Beneficiary and Ownership
   As the purchaser, you will be the policy owner until the child reaches maturity.

5. Set Up Payments
   Choose monthly, quarterly, or annual payment schedules.

Alternatives to Consider

If your main goal is financial growth or education savings, consider:

• 529 College Savings Plans

• Custodial Roth IRAs (for children with earned income)

• UGMA/UTMA accounts

These may offer better long-term growth, although they don’t include life insurance.

Final Thoughts

Whole life insurance for children under 18 isn’t for everyone—but for those who can afford it and are looking to lock in lifelong coverage, build early financial assets, and protect future insurability, it can be a wise investment.

Whether you’re a parent, guardian, or grandparent, securing a policy now could mean lifelong benefits for your child later.