Taking out life insurance for your children is a financial safeguard for you and your family if they were to experience an injury or illness. A convenient feature of generic life insurance policies (that you take out for yourself) is the option to add children to your policy. Read on to see how it works and which policies cover children as well as adults.
You pay the same price as buying directly from the life insurer.
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Is children’s life insurance essential for your family?
It's understandable if discussing life insurance for your children is uncomfortable. However, there are a few reasons why it is never a bad idea to purchase life insurance for your children.
Children cover can be added on to your cover. Not all providers offer this benefit. We looked at 16 policies and found just 4 give you the option of adding children to your policy.
Reduces financial burdens incurred by sickness or accidents. It might be a depressing thought, but being sick and getting involved in an accident is a probability in life. It could happen to anyone and no one is exempt, not even your children. This could mean extra medical care and purchasing medical equipment needed for rehabilitation - a financial burden can be relieved if your child is properly covered.
Replaces lost income. When your child’s sickness becomes longer than you expected and your presence is called for, there is also the possibility that you or your spouse will take a leave of absence from work for an indefinite period of time if both of you are working. No work, as everybody is aware of, generally means no income. Having children’s life insurance cover the added medical expenses will ease you of your fears how to sustain your daily expenses.
Takes care of the final expenses. Death is scary but is also a reality of life. The death of your child can cause you great emotional and financial stress. It might be difficult to deal with the loss emotionally, but there is something you can do about it financially. Dealing with half of the problem is a big help – a priceless one that you cannot ignore.
With the rising costs on every commodity, funeral expenses are also always on the rise - If you are not prepared for it, you might find yourself being in debt by just burying your child.
Can be used as collateral when your child takes out a mortgage. Some life insurance policies can be used as collateral when you want to secure a loan. This can be helpful to your children in the future when they are applying for a loan.
*Conditions apply. Check the policy disclosure statement (PDS) before purchasing cover.
How to purchase life insurance for your children
Children’s life insurance is basically to cover your child for sickness and accidents. Most insurance providers offer child insurance as an additional feature when you get your own life insurance.
Getting life insurance for your kids is easier because most insurance providers do not require medical or blood tests. Moreover, children’s life insurance is much cheaper than adult insurance because of the fact that kids have longer life expectancy.
Children eligible for this type of insurance are between the ages of 2 and 17 and a citizen of Australia.
So how long does the policy last?
Children’s life insurance benefits automatically expire when your child turns 21. However, an option to convert this into an adult life insurance policy is given by most insurance providers when your child reaches a certain age which is usually at 18 years old.
Speak to a trusted advisor to find a policy best suited to your family's needs
Why you can trust Finder's life insurance experts
You pay nothing. Finder is free to use. And you pay the same as going direct. No markups, no hidden fees.
You save time. We spend 100s of hours researching life insurance so you can sort the gold from the junk faster.
You can trust us. We say it like it is. We aren't owned by an insurer and our opinions are our own.
Richard Laycock is Finder’s insights editor after spending the last five years writing and editing articles about insurance. His musings can be found across the web including on MoneyMag, Yahoo Finance and Travel Weekly. Richard studied Media at Macquarie University and The Missouri School of Journalism and has a Tier 1 Certification in General Advice for Life Insurance. See full bio
James Martin was the insurance editor at Finder. He has written on a range of insurance and finance topics for over 7 years. James often shares his insurance expertise as a media spokesperson and has appeared on Prime 7 News, WIN News, Insurance News, 7NEWS and The Guardian. He holds a Tier 1 General Insurance (General Advice) certification and a Tier 1 Generic Knowledge certification, both of which meet the requirements of ASIC Regulatory Guide 146 (RG146). See full bio
James's expertise
James has written 255 Finder guides across topics including:
It’s possible to buy life insurance for your parents. We’ll show you how.
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You pay nothing. Finder is free to use. And you pay the same as going direct. No markups, no hidden fees.
You save time. We spend 100s of hours researching life insurance so you can sort the gold from the junk faster.
You can trust us. We say it like it is. We aren't owned by an insurer and our opinions are our own.
