Answer:

If you want life insurance coverage for your child, you may be able to add a child death benefit rider (usually limited to $5,000 or $10,000) to an existing policy on your own life. Otherwise, you'll probably need to buy a separate policy on your child's life.

But is it a good idea to insure your child's life? In some cases, yes. Term policies for children typically carry small premiums. In addition, your employer's group policy may include inexpensive term coverage for your dependents. Either one of these options can provide you with some peace of mind at a relatively low cost. In most cases, however, it's better to wait until your child reaches adulthood to start thinking about life insurance.

Why? Because the main purpose of life insurance is to replace lost income when a person dies. Unless your child is a movie star or a model, he or she is likely earning little or no income. His or her death would certainly be a tragedy, but it would probably not cause your family any financial hardship. You would have to pay for your child's funeral expenses, but buying a life insurance policy just to cover those costs may not make sense. Instead, consider saving or investing the money you would spend on insurance premiums. That way, the money will be available in case a tragedy strikes, but it can be used for other purposes as well.

Perhaps you have other reasons for wanting to buy a separate insurance policy on your child's life. You might be worried that you won't be able to insure your child down the road if he or she develops a medical condition (especially if certain diseases run in your family). However, few medical conditions make a person uninsurable. Only about four percent of all life insurance applications are rejected. And don't think that life insurance will be too expensive once your child grows up. Insurance policies for healthy young adults don't cost much more than policies for children.