Do I Need Life Insurance For My Newborn?

Having a baby is an exciting time, but it comes with more than its fair share of questions. Long before a baby is born, parents are asked to answer questions, weigh options, and make life-changing decisions. All these decisions will affect the life of their unborn child.

There are many questions to be considered and answered, but one that may be less common is the question of life insurance.

Life insurance isn’t always thought of at the beginning of a person’s life. The truth of the matter is, though, that life insurance is a real and viable option for young children and newborns. The process of how to buy life insurance for a child may be murkier, but it’s worth the research and investigation.

What is life insurance?

Life insurance, in the most general terms, is a sum of money meant to be paid to a person at the death of the insured individual. The terms, conditions, and amounts all depend on the individual policy.

Ultimately, the decision is very personal and will vary wildly depending on each situation. The decision to purchase a life insurance policy for a young child opens up more questions like what type of policy to select.

Types of Life Insurance for Children

There are basically two types of insurance you can buy for your child: term life and whole life. Let’s look at both.

Term Life Insurance

Term life insurance is an inexpensive life insurance policy that protects a child for a set period of time. The length of time for this policy, as well as other specifics, depends on several different factors.

With a term life policy, once a child reaches 30 years old, they have the option to extend or increase the policy themselves. This, however, does come at a higher cost.

One option related to term life insurance is a term life rider policy. This type of policy simply adds a child to an existing life insurance policy, usually a life insurance policy of a parent. Rider policies usually expire once a child reaches adulthood, usually 25 to 35 years of age, and max out around $10,000 or $20,000 worth of coverage.

Whole Life

Whole life policies have no expiration date or age and are in effect as long as premiums are paid. There are a number of options for whole life policies, so it’s important to shop around before purchasing a policy.

What should you consider before buying life insurance?

The answer to this question isn’t a simple one. If a parent asks anyone — family members, friends, or financial advisors — they will receive a number of different answers and rationales. The decision to purchase a life insurance policy for anyone is incredibly personal, but there are a few things to consider when shopping for life insurance policies for your newborn.

The first consideration is future plans for the child. All life insurance policies have cash value, and that value continues to accumulate throughout the length of the policy. This value, depending on the terms and conditions of the policy, can be used as a savings plan or help secure financing for future educational expenses.

It’s also important to consider the potential ramifications of the loss of a child. A child’s life insurance policy can help offset final expenses, loss of income for parents during grieving, and even family counseling to help with the loss and trauma.

While no parent wants to consider this tragic loss, it’s important to see child life insurance plans as preparation or protection from the unthinkable. It’s simply an available option for parents to consider in the grand scheme of their child’s life.

How does life insurance benefit a newborn?

A life insurance policy may seem out of line with the birth of a child. Every parent wants healthy, happy kids for many years to come, but life insurance policies offer several benefits even to the youngest policyholders. Buying a life insurance policy for a newborn helps establish and provide for a savings plan, increases the future insurability of the child, and helps protect future financial issues such as student loans.

These insurance policies are meant to help protect assets, both current and future, as well as add a sense of security and peace of mind for parents. The biggest benefit of these policies is the potential for them to grow with the needs of your child.

Many policies can be added onto or extended once the insured child reaches a certain age, allowing them the chance to make changes or additions based on their needs and long-term plans.

What’s the process for buying a policy for a newborn?

As a new parent, there are hundreds of new life changes and considerations. Adding another one, like a life insurance policy for a newborn, may seem overwhelming. Fortunately, the process of buying a life insurance policy for a newborn is relatively straightforward.

The first step is thinking through your own financial situation, future goals, and current insurance coverage. As most parents opt for a rider policy for their newborn, you’ll want to make sure all your insurance needs are being met at a price point you are comfortable with.

Once you consider your own assets and coverages, it’s time to get some professional advice and guidance. A life insurance policy is not always necessary or beneficial for each family or situation. To determine your own needs and understand benefits and options, you need to find an insurance provider you trust.

Insurance may not be high on the list of priorities when bringing home a newborn, but it should be on the list. A life insurance policy for a young child is not only affordable but can also offer benefits to both the child and the family as a whole.

It’s important to consider your current coverage and research options for the addition of a newborn. Remember, a life insurance policy isn’t always necessary. It’s a personal choice parents should make together after gathering all the important information.


Laura Gunn writes and researches for the insurance comparison site, She is a mother to two young boys and is passionate about parents knowing every possible way to protect their children.