Insurance for children: what it is, what it costs, and when it makes sense

When parents ask about insurance for children, the goal is rarely income replacement. Instead, pediatric life and critical illness coverage serves two practical purposes: locking in future insurability while a child is young and healthy, and building a tax-advantaged financial foundation early in life.

A participating whole life policy on a child can be paid up over a finite period (such as 10 or 20 years), accumulating cash value on a tax-advantaged basis that can later be transferred to the child tax-free in adulthood.

Before considering coverage for children, we always make sure the parents’ own income protection, life insurance, and core family savings are properly in place first.