How Old Should a Child be Before Having a Life Insurance Policy?

Life insurance can be an uncomfortable topic of conversation, especially when it comes to the question of whether or not to purchase a life insurance policy for your child. We understand the difficult implications that come from this conversation, but we urge you to remember: life insurance for children is an investment for life.

Although financial needs and priorities vary from family to family, we at Southwestern Investment Group recommend that you evaluate whether buying a life insurance policy is a good move for the future of your family. 

Here are a few considerations for if and at what point you should consider buying life insurance for your child.

The Ins and Outs

This might be your first time encountering the idea of purchasing a life insurance policy for your child. You probably have a lot of questions or maybe only vague ideas of what an investment like this entails. We’re here to help.

A life insurance policy may be purchased for a child between 14 days and 14 years of age. When purchasing life insurance for a child, only whole life insurance is possible, rather than term insurance. This means that the policy purchased during childhood will follow the individual for the rest of their life, assuming the premiums continue to be paid. An important note: as a caretaker, it’s important to have all the policy materials and information ready to pass on to the child when they are of age.

The child then becomes the owner of this policy when they become 21 years of age. At this point, the individual may choose to continue to pay the premium and carry the policy. However, since the life policy also carries cash value, the individual may also cash out the policy and use it for other life investments.

Purchasing a life policy for your child may not be the right choice for your family, so it’s important to research and talk with a knowledgeable and trustworthy professional before making this investment. Other options for securing your child’s future include:

  • College Fund
  • IRA
  • Custodial Account

Life Insurance for…Life

We understand that it can be a daunting thought: the unimaginable happening to your child. But, we are here to tell you that life insurance for children can serve your family beyond funeral costs and cover general life expenses.

An example of this is protecting your child’s insurability; heaven forbid your new bouncing baby one day grow up and become a skydiving instructor or deep sea diver. Professions and hobbies which come with inherent risk may affect your child’s access to affordable life insurance. 

When life insurance is purchased during childhood, the policy grows with the child until they take ownership at age 21. Meaning, by the time they are swimming in cages with sharks or jumping out of an airplane on a regular basis, they will already have an affordable premium locked in place.

A Vehicle for Investment

Of course, when buying insurance, there should be an underlying need for insurance coverage, however, there are other, often overlooked, reasons parents might desire to take out a life insurance policy on their child are that it can be used as an investment vehicle for future life expenses, such as college. After all, you purchased this policy to protect your family’s future, therefore it might very well be best spent to pay for their education so that they may start their professional life without the burden of debt.

An additional benefit? Cashing out a child’s life insurance policy will not be considered household income, therefore it won’t affect access to student aid.

The beauty of this policy is that it was purchased for the child in whatever capacity it might be best used. You have the power to decide. So, how old should your child be when you purchase a life policy? The sooner you invest, the more cash value your policy will have; however, the real answer: whenever the investment is right for your family.

It’s important to note that an insurance policy should not be taken out strictly as an investment vehicle for a child. After fees and typically lower returns, an insurance policy is oftentimes not the best investment vehicle.

Got questions about life insurance policies?

Southwestern Investment Group provides financial advising services with knowledge and integrity. Contact us today to learn more about life insurance and how it can benefit your family.

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Jeffrey T. Dobyns


President, SageSpring | Financial Advisor, RJFS 

Jeffrey T. Dobyns

President, SageSpring | Financial Advisor, RJFS

Beyond crunching numbers and investment strategies, at SageSpring, we’re about building relationships. When you encounter Founder & President of SageSpring, Jeff Dobyns, it’s easy to understand why this is at the very heart of who we are as a firm. You won’t find stuffy formalities with Jeff; instead, you can expect to find him sharing a warm smile, communicating a compelling vision, or patiently untangling life’s complex challenges with clients. He believes in truly getting to know clients, understanding their aspirations and priorities, and navigating their financial plans with a tailored, comprehensive approach. Our team members have often been caught taking notes on Jeff’s effortless relationship skills from a distance, and we admire them for striving to learn from one of the best. 

Jeff’s financial expertise and wisdom are the perfect match to his innate people skills. Jeff holds the prestigious CERTIFIED FINANCIAL PLANNERTM certification, Chartered Life Underwriter (CLU®), and Chartered Financial Consultant (ChLU®) designations, and has held executive positions with financial planning firms for more than two decades. 

His dedication extends beyond the office to the boardroom and the local community, where Jeff is passionate about giving back. He serves as Chairman of the Board of Men of Valor, a prison ministry and mentoring program. Jeff also serves on the board of Send Musicians to Prison, which shares hope, healing and restoration with the imprisoned through musicians & artists. Jeff actively supports other initiatives in the community by sitting on the board of The Signatry of Middle Tennessee and the Halftime Institute of Nashville. 

Witnessing his four children, Gracyn, Hunter, Tanner, and Logan, excel on the field is almost just as rewarding, if not more, than celebrating the victories of seeing his clients overcome obstacles and build wealth. Spending weekends boating on the lake, hiking mountain trails, and fishing with his family are the moments Jeff cherishes most. It’s this grounded perspective that reveals the true meaning of wealth for Jeff: not just numbers on a page, but the freedom to create experiences that enrich your life and the lives of those you love. When you choose the Dobyns McMillin Wealth Team, you choose more than financial expertise. You choose a partner who champions your dreams, celebrates your victories, and walks besides you on the path to achieving your unique goals.

**Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER TM, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.