The number one reason for purchasing life insurance coverage is to compensate for the loss of income a death in the family would create. Obviously, young children don’t have any income to speak of. But if they were to die, you would surely need to take some time to grieve and come to terms with the shock.
Kids come into our lives full of magic and big dreams. But let’s be honest—they also bring a whole new set of responsibilities for parents, which can become worries as well. That is why making sure your children are protected is so important.
It could mean getting accident insurance for babies, often offered by insurers at low cost, sometimes even free.
It could also mean getting critical illness insurance for your child, so you can take time off work to care for your child if they become seriously ill. Since the odds of this happening are low, the insurance is usually quite affordable. For kids between the ages of 2 and 5, coverage might even include some extras.
You can ensure your baby from the very first week of life!
By taking out children’s life insurance when they are in good health, you’re giving them protection that will stay with them for life. This can be a huge advantage for your kids, especially if their health declines. For instance, a child diagnosed with a critical illness that would rule out the chances of getting insurance in adulthood could fall back on the life insurance you had the foresight to pay up when they were young.
Looking at different types of life insurance, the comparison between the premium for permanent and term insurance is particularly interesting. Here is the calculation to cover a 12-month-old boy:
| Permanent insurance | Term insurance | |
|---|---|---|
| Coverage length | 20 years* | 20 years |
| Face amount | $50,000 | $400,000 |
| Annual premium | $469.50 | $444 |
Although the difference in premiums is minimal, the face amount is very different.
The advantage of permanent insurance is that the annual premium stops after 20 years, but the adult child continues to be insured.
In addition, term insurance can be a solution to maximize coverage for short-term needs, while permanent insurance may be better suited to long-term needs.
Ultimately, a financial advisor will be able to guide you towards the best option for you, based on your financial situation.
Use our term life insurance calculator to get an idea of the premium you'll have to pay, based on your family's needs and financial situation.
You can renew your term insurance or convert it to a permanent policy at the end of the term.
It's important to note that the premium for term insurance can increase significantly when the policy is renewed at the end of the term, mainly because of the insured's increased age.
Yes, grandparents can insure their grandchildren without their written permission, since the grandchild is a person whose life is of interest to them.
A financial advisor is the best person to help you assess your needs and guide you towards the product best suited to protect your heirs. If you already have an iA advisor, contact him or her. Otherwise, visit the Find an advisor section.