Life insurance for a child is usually Whole Life insurance that would pay a death benefit if the child should pass away, or provide cash values to use for college or other expenses when they are older. My parents took out life insurance on their six children, and when my sister died as a toddler, the money from the life insurance was a ray of sunshine at a very dark time. However, thankfully, by far the most common use for life insurance for a child is for large expenses when they are older.
There are two main reasons to purchase child life insurance. The first is to insure against the unthinkable tragedy of losing your child early to cover the cost of final expense. The second is to protect the child's insurability should they develop a disease or disorder such as Type I diabetes or cancer which would be difficult to purchase life insurance.
Permanent plans like whole life and universal life insurance protect insurability and allow cash accumulation for that can be used for college funds, a new house or even a retirement plan. Adding a child life rider to an adult term life or permanent life insurance plan is a very affordable way to insure children, especially multiple children for one low rate will cover all children and allow for guaranteed conversions in case they should lose their insurability.
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Permanent plans like whole life and universal life insurance protect insurability and allow cash accumulation for that can be used for college funds, a new house or even a retirement plan. Adding a child life rider to an adult term life or permanent life insurance plan is a very affordable way to insure children, especially multiple children for one low rate will cover all children and allow for guaranteed conversions in case they should lose their insurability.