If you’re committed to securing your children’s future, buying them life insurance is a wise financial move—whether you choose term, whole or universal life insurance.  

While term life offers valuable protection—and is the most affordable form of life insurance— whole and universal life are particularly sound financial vehicles that continue to grow in value over time.  

At Pan‑American Life Insurance Group (PALIG), we offer term, whole life and universal life insurance for children. Here’s the top reasons parents buy these products.   

One unique feature of whole and universal life insurance is the ability to build cash value over time. When parents purchase life insurance for their child at a young age, it allows more time for the policy to accumulate cash value—a separate policy component from the policy’s death benefit. 

As premiums are paid, cash value grows. Down the road, it can be accessed through a policy loan or withdrawal, providing financial flexibility whenever it’s needed—say, to pay for braces, dental care or healthcare that isn’t covered under a health plan. In other words, it serves as a valuable emergency fund. 

Some parents earmark the cash value in their child’s whole or universal life policy to pay for college—very helpful, given the high costs of tuition. Alternatively, that cash value can be used to buy a car, purchase a home, start a business, pay for a wedding—whatever the policyholder chooses. Insurance companies do not impose restrictions on how cash value is spent.  

And because the growth of the cash value is generally tax‑deferred, it grows at an accelerated rate, earning interest on every premium contribution.    

Another powerful advantage of purchasing life insurance for children is affordability.  

Premiums are typically based on a policyholder’s age and health at the time they apply for coverage. Because children have long life expectancies—and most are in generally good health—they present significantly lower risk to carriers.  

As a result, life insurance premiums are significantly lower for kids. In addition, securing life insurance at a young age safeguards insurability—because when adults develop serious health conditions, as is more likely later in life, it can make it harder or more expensive to obtain life insurance.  

Furthermore, with whole and universal life insurance, premiums are guaranteed to remain the same throughout the policies’ life. By locking in low premiums early on, parents secure coverage for their children at a highly‑affordable cost that becomes an even better deal over time.   

Most carriers allow coverage to be purchased throughout childhood. At PALIG, coverage may be purchased from 30 days after birth the age of 18 years old. 

Depending on the carrier, children’s life insurance may be available as a rider added to a parent’s policy or as an individual policy.  

For example, at PALIG, coverage may be provided via rider on their parents’ term, whole and universal life policies, or, for whole and universal life, as a standalone policy.  

Typically, policy ownership is transferred to the child when they reach maturity. Then, they can keep their policy in effect (by paying their premiums), increase or decrease its face value, withdraw cash value or surrender it. 

While carriers’ underwriting requirements vary, at PALIG, it’s only required when the policyholder wishes to increase their policy’s face value.  

While the idea of purchasing life insurance for children may seem unconventional at first glance, it’s truly a gift that may last a lifetime.  

Life insurance terms may vary widely by carrier, country and policy type. It’s therefore important to discuss this in detail with an experienced insurance advisor and consult with you own financial or tax advisor on your personal situation. 

At Pan‑American Life Insurance Group, we offer a range of quality life insurance solutions that take children straight through to adulthood.

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