The value of having life insurance on children

There are two schools of thought on the value of having life insurance on children. Some parents may say that a child’s life insurance is unnecessary as a funeral is not very expensive, and there is no need for insurance other than perhaps setting aside a small amount to cover this expense.

The other school looks beyond this as coverage for the use of life insurance as a funeral expense to other reasons for having children’s life insurance. The thought of getting a child life insurance policy can be challenging to appreciate. And there is every reason for parents to have such reactions when it comes to this sensitive matter. However, if we are going to think objectively, a life insurance policy can be of great help at any time when there is a real need.

Parents are setting funds aside to set this up


  • There may be some hereditary issues in the family history that leads them to want to put some life insurance on their children to ensure they will have life insurance in the future. Some issues may make it difficult to get insurance in the first place, which is where we help.

  • To guarantee that the child will be able to purchase at least $250,000 of insurance before the age of 25 if they become uninsurable or rated for any reason. This is happening more than one might imagine.

  • If a child passes, it is frequently not sudden, and the family could have incurred many expenses over this period. Children’s life insurance will provide some funds to help and possibly a memorial.

  • Some families appreciate the importance of life insurance for children. Many of these families will purchase a fully paid plan in 15 or 20 years, and the parents or grandparents take on the responsibility of paying these premiums for this time frame.
  • When parents’ cash flow allows, they can purchase a permanent policy for their children for a modest amount of life insurance with the idea of stuffing as much cash as possible into it to create a policy with a lot of cash that is growing tax-deferred. This policy cash value is available when the child needs it for university or a down payment. We would welcome a conversation on this if it were of interest as it needs to be set up carefully.

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Who needs life insurance for children?


  • First Needs – Children who have conditions that will worsen as they grow.

  • Second Needs – Children who may develop long-term conditions later in life.

  • Third Needs – Both parents will depend on the children as they grow up.

Money-saving tips for parents looking to set up a child policy

There are reasons for having children’s life insurance that make sense depending on what it would cost. It covers the above needs at the lowest possible costs that we address.

Simply add low-cost child rider to your policy

The least expensive way to cover the first two reasons above is to add a child rider to your existing personal insurance policy, provided that it is with a company that has a decent rider, e.g. Manulife or Canada Life. It’s also vital that the coverage period for your policy is long enough that it will not go through a renewal before your child would want to take advantage of the rider. For example, if your child is under 15, you would not want to add the rider to a 10-year term policy as you will be replacing it in ten years, and it assumes that both you and your child will have the heath to qualify for life insurance in ten years. This is likely the biggest mistake that people make with child riders. The policy term is too short for the rider to be meaningful.

Two insurance companies offer the best child riders, but this can change quickly, so speak to us if this is of interest. The advantage of these companies is that they guarantee that the child can purchase up to $250,000 of any life insurance at standard rates at predefined times up to age 25. The riders only cost between $5 and $10 per month depending on the company and number of children – one is a set rate for the family, and the other charges per child.

Start with a low-cost convertible term policy

For the third reason, figure out how much life insurance you would like to cover for your child and use our quoting engine to get quotes from many insurance companies in Canada. We suggest that you purchase a term product that will keep it in place to at least age 21, so a term 20 usually works well. It is not very expensive. These policies are always convertible to a permanent policy without a medical need. If cash flow is available, a 20 pay whole life policy is a good choice, especially for very young children, where $50 per month will buy a two-year-old, approx. $44,000 of initial coverage, which by age 50 will have a death benefit of $184,250, or a cash value of $65,250

Whole life policies add value to your children’s future

The final two reasons are more complex, and a conversation would be to work through what would be best. However, a $250,000 policy can be purchased for a 3-year-old female for less than $84 per month, and it would be fully paid for in 20 years. The majority of our clients do not purchase children’s insurance, but there are valid reasons for doing so; of those who do, most cover it with a children’s rider on their policies.

We recently had a couple who purchased a $250,000 permanent policy for their 3-year old daughter on the basis that should the daughter become an angel prematurely, and the mother would be so devastated she may never work again. The $250,000 replaced lost income due to the mother losing several years of income due to grief preventing her from working.

Compare life insurance plans for children online

The quickest and most reliable way to compare children’s life insurance plans is to get multiple quotes from an online rate comparison service like IDC Insurance. Not only will you be able to compare life insurance quotes for children from several top-rated companies, but you’ll be able to do so from the comfort of your own home. You’re free to do it at your own pace, so you can take however much time you need to feel confident about your decision. Our accredited insurance advisors will help guide you through this process and assist you in buying a policy for your children when you’re ready.

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