Jami Sliger When you’re expecting a child, it can feel like there are a million things to get ready before the baby arrives. From building a crib, picking a name, and trying to figure out where to put everything, expectant parents have a lot on their plates.
Expectant parents often start to think of the future as the baby gets closer, and many buy life insurance during this period. Life insurance is a wise investment for new parents as it’s one of the best ways to secure your child’s future even after you’re gone.
However, what about life insurance for babies? The idea of buying a life insurance policy for a newborn makes people nervous sometimes because they don’t even want to consider the prospect of something happening.
Life insurance for babies is a lot more than financial help if the worst happens, though. Even though you’ll (hopefully) never see the insurance payout, there are many benefits to buying a life insurance policy for a child.
Read on to learn how life insurance for babies works, what the benefits are, and which companies have the best plans. Then, compare quotes and features with as many companies as possible to find the insurance that will work best for your family.
Do babies need life insurance?
Getting a newborn baby a life insurance policy might seem strange at first, but there are many reasons why doing so is a good idea.
Of course, a life insurance plan for a baby will help pay for expenses if the worst happens. With a bit of luck, the policyholder will never see a penny of the payout.
There are two significant reasons to buy a life insurance policy for a newborn, both of which they might appreciate when they are older.
The first is that most life insurance policies for babies or children are whole life plans, meaning they’ll cover the child for life. Most of these plans offer guaranteed insurability. If your child develops a medical condition later in life, they won’t have to worry about being denied life insurance coverage.
A second benefit is that whole life plans accumulate a cash value that can be used later. Many parents or guardians choose a life insurance policy to save money for a child’s future since the accumulated value can be used for college or as a down payment for a home.
There are two primary types of life insurance you can buy for a minor. The first is a policy written specifically for them, where they are the insured and eventually become the policyholder. Another option is to add a child rider to an existing policy. Typically, child riders split into separate policies when the minor comes of age.
What insurance company has the best life insurance for babies?
Not all life insurance companies offer policies for minors. For those that do, you should carefully vet a company before you agree to purchase a policy. Life insurance is almost always an investment you’ll be paying on for a long time, and that’s doubly true of life insurance for youths.
To help you get started, you can learn about some of the most trusted names in life insurance for minors below. These companies have solid reputations and unique features that set them apart.
Gerber Life Insurance
Anyone who has a baby is familiar with the Gerber brand. From tasty baby food to soft, comfortable onesies, most parents rely on Gerber at some point.
Gerber is known for more than just its baby food and an adorable mascot. Parents, guardians, and other relatives have trusted Gerber’s life insurance for the past 50 years.
People choose Gerber time and time again because they have competitive prices and unique features. You can get a quote instantly by filling out a simple online application, and it automatically doubles the coverage you buy when the child turns 18.
Gerber is a huge name for baby products, and you’ll be paying for the brand — Gerber life is more expensive than most other companies. It also uses gender as a determining factor for rates in several states.
There are two plans you can buy through Gerber:
- Grow-Up Plan. Gerber’s Grow-Up Plan is a whole life policy for children under 18 years old. This plan builds cash value and offers guaranteed insurability.
- Gerber Life Young Adult. For older kids between the ages of 15 to 17, this plan offers the same benefits as the Grow-Up Plan for a higher price.
As a final plus, Gerber gives the insured child the option to either take the plan’s cash value and cancel it when they turn 21, or they can continue paying and increase their coverage.
A.M. Best, a company that rates the financial strength of insurance companies, gives Gerber an A.
State Farm
While Gerber is famous for its baby products, State Farm is known for its overall excellence in insurance. From car insurance to homeowners coverage, State Farm offers protection for almost everything in your life.
State Farm’s life insurance for children is one of the cheapest on the market, and it covers babies from the moment they’re born. State Farm offers term life insurance options for children through a parent or guardian’s policy. This life insurance add-on covers all children in a family for the affordable price of $50 a year.
Some drawbacks of this plan are that you can only buy $20,000 worth of coverage, and grandparents can’t add grandchildren to their plans.
Although coverage is limited to a death benefit, State Farm’s Family Life Insurance plan is an excellent choice for parents or guardians with a tight budget. People who plan to save for major life events for their children through other means might also find State Farm’s plan interesting.
You can’t purchase children’s term insurance as a stand-alone policy, but it does have the option to convert to a separate plan when your children turn 25. If they decide to keep their life insurance, they won’t have to prove their insurability.
State Farm has one of the highest ratings with A.M. Best, with an A++.
Mutual of Omaha
You might not have heard of Mutual of Omaha, but they are leaders in the industry of life insurance for children. Mutual of Omaha offers coverage throughout the U.S., promises guaranteed coverage for life, and has some of the lowest prices.
It’s also incredibly easy to get a quote online as the application process is straightforward.
Parents, guardians, and grandparents choose Mutual of Omaha because they offer features the child will benefit from as they grow up. For example, Mutual of Omaha allows children to add more coverage after qualifying events, such as marriage, having a child, or buying a home.
Insurance experts typically recommend Mutual of Omaha for baby life insurance above all other companies. You can buy coverage as low as $5,000 up to $50,000.
Mutual of Omaha does very well in terms of financial security — the company got an A+ from A.M. Best.
How much does life insurance for babies cost?
Insurance companies consider several factors when determining how much to charge you for your insurance. One of the most significant factors for life insurance is your age. Life insurance companies charge lower rates for young people because the risk of them dying soon is lower.
Due to this, buying a life insurance policy for a baby will give you the lowest prices possible. Consider the following prices listed below to get an idea of how much you’ll pay per month.
| Company | $5,000 Coverage | $10,000 Coverage | $20,000 Coverage | $50,000 Coverage |
|---|---|---|---|---|
| Mutual of Omaha | $2.30 | $4.61 | $8.21 | $19.03 |
| Gerber | $3.70 | $7.39 | $11.09 | $35.53 |
| State Farm | N/A | N/A | $4.16 | N/A |
| Global Life | $2.17 | $4.24 | $7.68 | N/A |
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As you can see, some companies offer a much better deal than others. However, you still need to compare the actual plan before you choose. Cheaper insurance doesn’t always mean you’re getting a better plan.
Find the Best Life Insurance Plan for Your Family
Buying a life insurance plan for a baby or child is a great way to help them prepare for their future. However, not all baby life insurance plans are created equal. Determine what you want to get out of your plan before you start looking so you’ll be ready to buy when you find the right fit.
While the three companies discussed above are some of the best, many others offer life insurance for babies. When you’re ready to find the right plan for your family, start by comparing quotes with as many companies as possible.
