Which Is Better: Child Whole Life or A CTR?

Child 1Last Monday I wrote, “3 Questions About Life Insurance For Parents.”

By coincidence, the next day an insurance company sent me the following 5 reasons for selling Whole Life insurance for children.

“Clients may ask you if there are advantages to buying a whole life insurance policy for kids or grandkids. The answer is “Yes.” Here are five reasons to consider:

1.     The Kids Will Always Be Insured

One of the biggest reasons to have a whole life insurance policy for children is to protect their future insurability. There are a number of factors that could affect a child’s future insurability – like high blood pressure, diabetes and obesity. With Children’s Whole Life from United of Omaha, they will always be covered regardless of future health.

2.    Peace of Mind for Parents

If the unthinkable happens and parents lose their child, the policy could cover funeral expenses and provide financial relief during a difficult time. A Children’s Whole Life policy with a face amount of $5,000 up to $30,000 could pay these expenses and more should tragedy strike.

3.    The Policy Can Build Cash Value

Children’s Whole Life insurance can earn a cash value. Kids may be able to use those funds to help buy a car or borrow from the policy to help pay education expenses.

4.    It’s Affordable

Coverage may be more affordable than your clients think and premiums may fit with most budgets.

5.    Rates Are Locked In

Buying a Children’s Whole Life insurance policy now will lock in the rate for the life of the policy. Rates never increase with age.”

I find the arguments they make in their marketing piece to be sound but insufficient.  I still believe that the bulk of the money in your Life insurance budget should be used to insure the life of a parent or guardian.

I would rather see the money for child Whole Life insurance policies be spent on Disability Income insurance for a parent.

In this post I will share my opinions on Child Whole Life insurance.  If you are a parent and considering Life insurance on your children, I urge you to read this entire post and make your decision accordingly.

Regardless of your decision, you cannot go wrong.  As long as you elect the plan that you feel best meets your goals, it will be correct.

1.   The Kids Will Always Be Insured

Most Child Term Riders (CTR) allow a child to convert their coverage to a lifetime policy when they turn 18.  If they exercise this right, they will never be uninsured.

Just make certain that when you buy a CRT you pay attention to the conversion option.

2. Peace Of Mind For Parents

A $10,000 or $15,000 CTR would be perfect for them.

3.  The Policy Can Build Cash Value

Most child Whole Life policies are wonderful if your goal is to help your future grand-children with their college expenses but there are other methods available to accumulate money for your child’s college or wedding expenses.

4.   It’s Affordable

There is no question that the premium for a Whole Life insurance policy is affordable.  I have seen them as low as $8.  The real question is if they are the most affordable option.

Many young parents have multiple children.  I am the youngest of 4 siblings.  If my parents had bought an $8 Whole Life insurance policy for each of us, they would have been obligated to pay $32 a month just for us kids.

A CTR is even more affordable.  One rider, costing around $6 a month, would have covered all 4 of us while we were still living at home.

5.  Rates Are Locked-In

I will grant that this argument makes sense, however, the cost of insurance for an 18-year-old is not significantly more than the cost of insurance for an 8-year-old.

Premiums are going to be different from one insurance company to the next, however, at that age, there is not a huge difference if they are healthy.


After 25 years of working with insurance, my recommendation is that parents consider a Life insurance policy with a Child Term Rider over getting separate Whole life policies for each child.  That way more money will be available to spend on enough Term Life insurance to protect the family if something were to happen to the parent.

You can use the link above to get prices for regular term insurance, however, you will need to contact us directly to get rates for term insurance with a CTR.



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