Insurance Strategy: Children’s Insurance Protect and provide for a child’s financial future with permanent life insurance

Helping a child or grandchild get off to a great financial start is one of the greatest gifts you can give. Using life insurance, you can provide a foundation for financial security and a lifetime of benefits.


A picture of a grandma and granddaughter baking in a kitchen

Life insurance has benefits that can last a lifetime

A life insurance policy bought for a child can result in significant cash value accumulation throughout the life of the policy. The cash value built can help pay for college, a down payment on a first home and other larger expenses through life.

When properly structured, a life insurance policy for a child can:

  • Provide protection throughout the child’s life, no matter what happens
  • Grow in value, income tax-free, that can result in significant cash value accumulation
  • Offer cash value that can be accessed income-tax free to help fund life's major milestones


Getting a RiverSource® permanent life insurance policy for a child

If you are considering purchasing a life insurance policy for a child or grandchild, consider these factors:

  • The earlier you purchase life insurance for a child, the lower the potential cost for a given premium over time. Purchasing a policy early can also allow more time for it to accumulate potential cash value for use by the child as he or she reaches adulthood.
  • Parents, grandparents, relatives or guardians are typically owners of a child’s life insurance policy and they retain control over the policy and the policy’s cash value. The ownership can be transferred to the child at any time they feel it’s appropriate. However, any change in ownership may have gift tax consequences.
  • You will want to consider the kind of permanent life insurance and size of policy. Talk to your financial advisor for what will work best for your situation.


The journey through a lifetime of benefits

A lifetime of benefits for a child can look like this:

  • Born – Child receives a RiverSource permanent life insurance policy
  • Age 30 - Can use cash value in the policy for a mortgage down payment
  • Age 40 – Start saving for retirement by adding money to the policy
  • Age 66-85 - Take income annually, tax-free and keep a death benefit for heirs

The reason for buying a life insurance policy on a child’s life is to establish a financial foundation for later in life, but it can also provide a financial cushion for the family in the unfortunate circumstance that a child dies. An Ameriprise financial advisor can answer your questions about buying a life insurance policy for your child or grandchild.

It's important to remember that accessing policy cash value through loans and surrenders may cause a permanent reduction of policy cash values and death benefit.


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Get the guidance you need

Let an Ameriprise financial advisor review your will and your current life insurance. We can help you create a financial plan using life insurance strategies to help reflect the goals important to you.

Neither RiverSource Life Insurance Company, nor RiverSource Life insurance Co. of New York, nor their affiliates or representatives, offer tax or legal advice. Consult with your tax adviser or attorney regarding your specific situation.