What Is Child Life Insurance?

4 min read

Child Life Insurance – Mother laughing with daughter

Child life insurance, like the Grow-Up^® Plan, is a whole life insurance policy that you can buy for a child or a grandchild when they are 14 days to 14 years old. Even though it’s called child life insurance, the coverage can last a lifetime (as long as premiums are paid), and the policy ownership transfers from the parent or grandparent to the child during the year the child turns 21 years old.

Some insurers sell the option of adding a child rider to your own term life policy. Gerber Life does not offer this option, and you should be aware that the rider typically expires at the end of your policy term, meaning your child would have to buy their own policy as an adult.

Who's buying life insurance for children?

Parents and grandparents buy child life insurance so they can help give financial security to their loved ones. Child life insurance helps families by:

Locking in a childhood life insurance rate that never goes up
Guaranteeing insurability when children become adults
Building cash value over time
Doubling coverage during age 18 automatically — a $10,000 policy becomes $20,000 — with no increase in cost
Preparing families for uncertainties of life

Purpose of Child Life Insurance & How It's Different from Adult Life Insurance

Child life insurance works like adult life insurance by providing money if the unexpected were to occur. But there are some differences.

It is not income replacement

One of the primary reasons for getting adult life insurance is to replace your income if something were to happen to you, so your family can still pay the bills. Your child doesn’t earn income, so why do you need it? Any loss in the family also comes with added expenses. And if the unthinkable happens, life insurance can help cover the cost of final expenses and provide support when it’s needed most.

It's not meant to be a college savings fund

Life insurance is meant to provide assurance that your family is financially prepared for the unexpected. Although child life insurance has cash value that builds up and you can borrow against (policy loan interest rate is 8%. Loans may impact cash value and death benefit), it does not accumulate rapidly enough to provide as much money as you may want for college.

If you’re planning ahead to save for a child’s education costs, we recommend getting the Gerber Life Insurance College Plan. You can determine the coverage amount to match how much you’d need to pay for college. Your child would be able to use the benefits for any purpose, not just college tuition, and it doubles as an adult life insurance policy.

So what does child life insurance cover?

Child life insurance offers financial security to families, helping them cover costs that can come up in the event of a loss of a young family member. That’s something no family wants to think about, but what would already be a difficult time for parents would be even harder if they could not cover final expenses, medical bills, family counseling, or time missed from work.

We all hope your child lives a long, healthy life and that their Grow-Up^® Plan provides life insurance coverage that lasts their entire lifetime. It also provides the additional benefit of coverage that doubles during age 18 at no extra cost. Your child will have increased coverage with the same childhood premium rate that never goes up.

And this whole life insurance policy includes a cash value benefit, where a portion of each monthly payment is set aside, so your child can take out a loan if they have an unexpected need in the future, or surrender the policy for the accumulated cash value.

Do you need to protect your child's insurability?

When you buy life insurance for your child, you’re not just protecting them through their childhood — you’re also helping provide protection that continues into adulthood.

Child life insurance policies like the Grow-Up^® Plan are whole life insurance policies, so your child can keep the coverage and help protect their own family. And if your child needs to buy more life insurance coverage as an adult, the Grow-Up^® Plan has a guaranteed insurability option, letting them buy an adult life insurance policy at the standard adult rate.

Here are two benefits of buying life insurance when young:

Life insurance rates are most affordable when the insured is young and healthy. So getting life insurance for your child now will let you lock in the lowest possible rate, and it will never go up as long as you and your child keep the policy.

If your child has the Grow-Up^® Plan, they take ownership of the policy at age 21, and they can keep the plan, with coverage that doubled during age 18, at the same childhood rate. And they can also purchase an additional adult policy from Gerber Life — their acceptance is guaranteed, regardless of future health or occupation.

A lot of coverage for not a whole lot

Life insurance premiums are based on the insured person’s age and health at the time of signup. So there’s no better time than now to buy them the coverage they deserve at the lowest monthly rate possible. The best part? If you get the Gerber Life Grow-Up^® Plan for your child, the coverage automatically doubles during age 18 and you don’t pay a single cent more.