Life insurance is primarily designed to protect dependents who rely on someone’s income. Since children do not have dependents, child life insurance is usually not necessary However, it may make sense for specific family preferences or situations.

It is common for grandparents to buy life insurance for their grandchild. After obtaining consent from the child's parent or legal guardian, grandparents can typically purchase whole life insurance for their grandchildren. Typically, to purchase life insurance for a minor, the grandparent or the child’s parent must also have their own life insurance policy.

Whole life insurance, the most common type purchased for children, does build tax deferred cash value at a guaranteed rate. Any gains withdrawn may be subject to income tax. Some policies allow the cash value to grow enough to cover future premiums, which may help when the child becomes the policy owner as an adult.

Many standalone juvenile policies and child riders allow future increases, either automatically at certain ages or through buying additional policies.

When the insured child reaches adulthood, typically between the ages of 18–25 depending on the insurer, the children’s life insurance can usually be transferred to them. They can:

• Take over the premium payments
• Select beneficiaries
• Access cash value for whole life policies (taxes may apply)
• Convert a rider or term policy into a permanent policy

If a policy or rider isn’t converted when required, coverage may end, and they will need to apply for their own life insurance policy as an adult.

This will depend on your family’s needs. Child riders often provide $10,000–$25,000 in coverage, which may be enough to help with final expenses. Families looking for higher coverage amounts, lifelong protection, or cash value growth may prefer a standalone whole life policy for children.