Purchasing life insurance on a child is almost always foolish. It might feel like the “responsible” thing to do, but the responsible thing it to carry appropriate life insurance (and disability insurance) on the child’s *parents *(or whoever is financially supporting the child).

Here is the math:

The highest odds of death, from ages 1 (after infant mortality risk has passed) to 18, is for a 1 year old male and the chance of death (all mortality figures from the RP-2014 tables) is 0.00041 or 1 in 2,439. The lowest is a 10-year-old boy with a chance of death of 0.000072 or 1 in 13,889.

So, the value of the insurance itself for a juvenile, while they are a juvenile, is the death benefit divided by somewhere between 2,439 and 13,889. In other words, if the death benefit is $20k (just to have an arbitrary number to work with) then the true cost of insurance is just $1.44 to $8.20 per year! So the vast majority of the annual premiums are just overhead. In fact, the value of the death benefit is so low, you can ignore it as immaterial and just do a straight time value of money calculation. What is the guaranteed cash value (FV) in year N for an annual premium of PMT (PV is zero)? It’s an annuity due (premiums collected up front), solve for I. I suspect it will be a negative number which means on average you would do better to just put the money in a sock drawer.

Let me do it another way. If you took out a policy for a child age 1 and held it until age 18 and it had a death benefit of $20,000 (sticking with my earlier arbitrary choice) then the *total* cost of insurance for the whole period is just $61.24 for a boy and $46.70 for a girl. If you have *all* the rest of the premiums paid in available as cash value at 18 then you still earned zero rate of return. (And I would be shocked if the cash value was that high.)

Don’t buy life insurance on children. Fund a Coverdell or 529 plan for them instead.