Best life insurance for children in Canada in 2024
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With over 20% of Canadians grappling with preexisting medical conditions, securing traditional life insurance becomes a challenge, often leading to higher premiums and stringent terms. Avoiding this predicament is crucial, emphasizing the importance of early life insurance for children.
By obtaining life insurance for your child before any serious medical concerns arise, you ensure their insurability. This guarantees continued coverage, allowing policy rollovers and additional riders without the hassle of medical exams, providing a secure and foresighted financial plan.
To help you, we've put together everything you need to know about life insurance for children, including the best plans. You can use our free comparator to compare plans and get life insurance quotes based on your child's unique needs.
Children Life Insurance in Canada
- Costs start as low as $8–$30 per month, offering lifelong protection at an affordable rate.
- Provides lifelong coverage, even if your child develops health issues later.
- Builds tax-free savings that can be used for education or future needs.
- Premiums are locked in for life, so you save more by starting young.
- Ensures your child can maintain or increase coverage as an adult, no matter their health.
What is life insurance for children?
Life insurance for kids is a type of whole life insurance policy, purchased by a parent or guardian for an individual under the age of 18 years. Premiums are paid monthly and the 'death benefit' will be paid out in the unfortunate event of the child's death.
When the child becomes legally of age they will take possession of the policy and they will decide to continue paying premiums or not. They will also be able to convert it into term life insurance.
Good to know
For an easy breakdown of the different types of life insurance and their comparative advantages and disadvantages see our life insurance guide.
Whole life insurance continues to accrue value over time and this value can be paid out in the form of dividends. In this way, whole life insurance can be used as an investment vehicle similar to a registered retirement savings plan (RRSP).
However, if you are planning to use child life insurance as a way of saving money for your child there may be cheaper ways to do it. You may want to consider exchange-traded funds (EFTs) or guaranteed investment certificates (GICs) which can be set to unlock and payout when they reach a certain age.
Why should you buy life insurance for children?
There are various reasons you might want to purchase life insurance. Let's take a look at some examples.
Case 1: Insurability
Keep in mind
Barbara, 54, from Ontario, has purchased child life insurance for her 15-year-old daughter, Cathy. Barbara did not have adequate insurance in place when she became seriously ill 10 years ago. Ever since she has had to pay higher premiums and has suffered financially. She wants to avoid her daughter ever being in the same position so she has purchased a policy for her.
Case 2: Financial stability
Keep in mind
Martin, 29, from BC, has a 5-year-old daughter. He is buying a kid's life insurance policy for his daughter so that when she comes of age she can choose either to keep paying or withdraw the money. He wants to give her the freedom to use the money as she chooses.
How much does life insurance for children cost?
| Coverage Amount | Whole Life Insurance for kids (Monthly Premium) | Child Rider on Parent’s Policy (Monthly Premium) |
|---|---|---|
| $10,000 | $8 - $10 | $5 - $8 |
| $25,000 | $15 - $20 | $8 - $10 |
| $50,000 | $25 - $30 | N/A |
| $100,000 | $45 - $55 | N/A |
Costs may vary depending on the insurance provider, the child’s age, and optional features like riders. Premiums for life insurance for children are typically much cheaper than premiums for adults because the risk being taken on by the provider is much lower. You can find policies with premiums as low as $8 a month.
For example
For example, a healthy 5-year-old child with a term life insurance policy of $25,000 might have a monthly premium of around $15.
The downside is that payouts are also typically capped much lower: between $10,000 and $35,000 per child. However, when the child comes of age they can convert it into a standard adult policy with the usual, much higher cap, of say $250,000 or more.
But we strongly recommend getting individual quotes based on your unique circumstances. Use our comparator and easily get quick quotes right here.
Is life insurance for a child in Canada worth it?
If your primary concern is to make sure your child is insurable then buying a cheap life insurance policy for them that they will be able to convert easily is a good idea. You may therefore want to choose a policy based on the adult policies offered by that provider.
You can quickly use our free comparator below to explore the various life insurance options for you and your children. Just enter basic information on your needs, and voila, compare multiple plan options and get free personalized quotes right here.
Get a life insurance policy that's right for you and your loved ones
If you are interested in children's life insurance as an investment then there are other options which may give greater value for money depending on your tolerance for risk. Aside from standard funds and investment vehicles, you could choose to purchase a registered education savings plan (RESP) which is geared specifically to paying for your children's tuition.
If you are concerned that a life event might prevent them from being able to work as an adult then you could look into buying a registered disability savings plan (RDSP).
Whole life insurance vs term life insurance for a child?
It is not possible to buy term life insurance for a child as this type of policy has a 'term limit'. You are only able to buy whole life insurance for a child.
However, if you have a term life insurance policy for yourself, you may be able to add a rider to the coverage which will protect your child as well. Once the child reaches an age specified in the rider you be able to convert this into permanent life insurance for them.
Another alternative is making sure your child is specifically listed in your own life insurance as a life insurance beneficiary.
If you are interested in finding life insurance that can extend to your children at a great price then hit the button below and get free quotes from multiple providers in no time.
Get a life insurance policy that's right for you and your loved ones
What is the best life insurance for children in Canada?
The "best" life insurance for children can vary based on individual needs and preferences. However, some popular options in Canada include:
- Policy Advisor: Customizable coverage options
- Customizable options.
- Accidental death and child term insurance.
- Choose from various providers.
- Canada Life Life Insurance: Including options like disability exemption
- Accidental death child term insurance
- Disability exemption
- Guaranteed acceptance
- Sun Life Insurance: Coverage from 30 days old
- Between 30 days and 17 years
- Fracture, Hospitalization, and more
- Manulife Life Insurance: Comprehensive critical illness coverage
- Guaranteed acceptance
- Child critical illness
- RBC Life Insurance: Good children's term Insurance plans
- Accidental death
- Children's term Insurance plans
- Age issued depends on individual situation
When choosing the best life insurance for children, it's essential to consider factors such as coverage amount, flexibility, and any additional features or riders that may be beneficial for the family's needs. Consulting with a financial advisor can also provide personalized guidance based on specific circumstances.
What are the tax benefits for children's life insurance?
- Tax-Free Cash Value Growth: The cash value in a whole life policy grows tax-free over time, providing a savings tool for your child’s future without tax implications on the accumulated amount.
- Tax-Free Death Benefit: If the policy pays out, the death benefit is tax-free, ensuring the full amount goes to beneficiaries without deductions.
- No Taxes on Withdrawals (Up to ACB): If the child later withdraws funds up to the adjusted cost basis (ACB) of the policy, it’s generally tax-free. Only amounts above the ACB are taxable.
- Gifted Policy Transfer: When transferring ownership of the policy to the child as an adult, there are typically no tax consequences, allowing them to take over a valuable asset seamlessly.
Life insurance for children not only secures their future but also offers significant tax advantages compared to other savings options.
What are the ways to find cheap life insurance for children?
- Shop Around: Compare quotes from different insurance providers to find the most affordable option. Online comparison tools can help streamline this process. Use our HelloSafe tool for the quickest and easiest quotes.
- Consider Term Life Insurance: Term life insurance is generally more cost-effective than whole life insurance. It provides coverage for a specified term and maybe a more budget-friendly choice.
- Look for Riders: Some policies offer additional riders that can enhance coverage at a lower cost. Explore options like child term riders to add coverage for your child within your life insurance policy.
- Health and Lifestyle: Maintain a healthy lifestyle for your child. Insurance premiums are often influenced by health factors, so encouraging healthy habits can contribute to lower insurance costs.
FAQs on Life Insurance for Children
Yes, you can buy life insurance for children in Canada. Policies like whole life or term-to-100 provide lifelong protection and build cash value over time. These policies are typically purchased by parents or grandparents to lock in affordable rates while the child is young.
The cost depends on the type of policy and coverage amount. For example, a whole life policy for a child with $50,000 coverage might cost around $30/month. Adding a child rider to your own policy typically costs $5–$10/month per child.
The best time to start is as early as possible, typically between 0 and 10 years old. Starting young locks in low premiums for life, ensures lifelong coverage, and allows the cash value to grow tax-free over time. It’s a cost-effective way to secure their financial future.
Many life insurance policies allow you to add a child as a rider. A child rider provides a small amount of coverage, typically up to $25,000, at a low additional cost. This coverage lasts until the child reaches a certain age, such as 18 or 25, and can often be converted to a permanent policy without medical exams.
If it’s a permanent policy, it stays in force as long as premiums are paid, and the child can take ownership of the policy. They can continue the coverage, withdraw or borrow from the cash value, or even increase coverage. For riders, coverage usually expires when the child reaches a certain age but can often be converted to a standalone policy.
