Should I Have Life Insurance on My Children?

Dave Ramsey does not recommend purchasing life insurance on children, specifically Gerber Life and similar policies that pose as college savings plans or promise a child’s insurability into the future.

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Children’s life insurance is another method of selling whole life insurance to people who don’t need it. As a child’s premature death is extremely rare, Dave feels that the expense can be managed via the parent’s emergency fund.

Alternatively, for those who wish to have some sort of extra protection in place, a child rider can be added to most term life policies. Companies that offer a child rider tend to charge $50 to $60 a year for $10-20,000 of coverage, which would cover all children in the household (usually up to age 25). Once the child is old enough to buy their own life insurance, they can convert their child rider coverage to an individual policy even if they have health issues. So, instead of spending too much money on a policy for your child, consider using those funds for better investment options such as Education Savings Accounts, 529 plans, or regular mutual funds.