Purchasing a life insurance policy for a child is a personal choice. Life insurance is designed to protect your dependants from the financial impact of your death by replacing a portion of your lost income. Children do not have dependents or generate income. However, some parents choose to insure their children because the emotional impact of losing a child may render them unable to work for a period of time. In that case, a child life insurance policy can act like income protection for the parent, allowing them time to grieve. In other cases, affluent parents may choose to purchase a life insurance policy for their child as a tax-advantageous way to transfer wealth to their children.