The idea of ​​insuring a child’s life may seem unusual, but it has its benefits in both the short-term and long-term.

First of all, what is child life insurance?
It is an insurance policy that parents or guardians take out on a child, the main purpose of which is to provide financial protection in the event of the child’s death due to illness or accident. The insurance helps cover funeral costs and other unexpected expenses (as of 2024, the average funeral in Canada costs between $5,000 and $15,000), and can help avoid financial hardship during such a difficult time for a family.

However, child life insurance is much more than just financial protection! For many parents in Canada, it is a smart move to create financial security for their child in the future. Many types of child life insurance include a savings component that allows the policy amount to increase over time and provide the family with additional financial resources in the future. For example, the capital accumulated within the insurance policy can be used to pay for the child’s education, purchase of a home, or other major expenses.

An investment in child life insurance that grows significantly over the years can provide your child with a financial cushion as an adult.

Other benefits of child life insurance:

Access to coverage in the future, regardless of changes in health.
If your child develops serious medical problems as an adult, an insurance policy taken out in childhood may be the only way to ensure coverage.
Fixed premiums (premiums and payments).
Unlike adult insurance, where premiums may increase as the insured person ages and/or changes in health, child life insurance usually has fixed premiums. This means that parents can expect the same amount of insurance payment for the entire term of the policy.

There are several types of child life insurance in Canada, each with its own characteristics.

Whole Life Insurance
This is a type of insurance that is valid for the entire life of the insured. The policy includes both coverage and a savings element that increases the policy amount over time. This type of life insurance is one of the most popular among parents because it provides both long-term financial protection and capital accumulation.
Term Life Insurance: This policy provides coverage for a certain period of time, such as until the child reaches a certain age. These policies are usually cheaper but do not include a savings element.
Other types of child insurance include critical illness insurance and accident insurance.

Critical illness insurance is a policy that pays a fixed amount of money if a child is diagnosed with one of the serious medical conditions specified in the insurance contract. Such conditions may include cancer, cardiovascular disease, organ transplant, kidney failure, meningitis, type 1 diabetes, and others.

What are the benefits of critical illness insurance for children?
First of all, it covers medical expenses. Many types of critical illness treatment are not covered by either public or private health insurance, so the insurance payment can be used to cover the costs of specialized medications, alternative treatments, travel abroad for treatment, and more.

Another advantage is the flexibility in using the funds. The payment under the critical illness insurance is a lump sum, is tax-free, and can be used at the sole discretion of the family. This can include not only the cost of treatment, but also rehabilitation after medical procedures, or even a family vacation to help the child and family recover from a difficult period.

And, of course, it is financial support for the family. If one of the parents may need to take time off or even temporarily stop working to care for the child, the insurance payment can compensate for the loss of income.

Children's accident insurance
This type of insurance provides financial protection in the event of injury or disability to a child caused by an accident. In such a situation, the insurance payment will help cover medical expenses related to the treatment of the child, including hospitalization, operations, rehabilitation and other medical services (in Canada, despite the existence of a public medical system, some specialized services and procedures are not covered by public insurance).

Also, this type of insurance may include payments if 

an accident results in a child becoming disabled. These regular payments will help parents cope with the costs of child care, purchasing necessary equipment, and even paying for specialized medical care. Some policies include additional payments for certain types of injuries, such as loss of limbs or vision. These payments can be used to cover the costs of the child’s recovery or adaptation to new living conditions.

There are insurance policies that allow parents to include children in them. Therefore, when buying insurance for yourself, carefully study the terms of the policy and choose the one that best suits the needs of your family.

In previous issues, we wrote a lot about the different types of insurance and the importance of having competent insurance coverage - one that strictly meets your needs at a given time.

Thus, “under-insured” means that if an insured event occurs, the amount that the insurance company will pay you will be insufficient, and the costs will have to be covered out of your own pocket.

Over-insured means that you have more coverage than you need – you may have duplicate policies, outdated coverage that you no longer need, or policies that cover far more than the cost of a potential financial loss.

One of the tricky aspects of insurance is determining the right type of insurance – your life and health, your children’s life and health, and of course, the exact amount of coverage you need.

Contact us – we will be happy to help you find the coverage that is right for you, your needs, and your current budget. We can also tell you about other financial products that exist in Canada that may be a great solution for you!

NilevskyGrigoriyMargarita

Tel: (416) 640-2600, (416) 697-9979

With Be Healthy editorial team

Childhood morbidity statistics in Canada

Respiratory diseases
Asthma is one of the most common chronic diseases (10-12% of children under 14 years of age).

Allergies and dermatological diseases
Approximately 6-8% of children in Canada have allergies to certain foods, and up to 20% of children in Canada suffer from various dermatological diseases, such as eczema.

Infectious diseases
Due to high vaccination rates, diseases such as measles, whooping cough, and rubella are extremely rare. However, diarrhea and rotavirus infections are the most common causes of hospitalization in young children.

Chronic diseases
Type 1 diabetes is the most common endocrine disorder (20-30 cases per 100,000 children annually). About 13% of children aged 5 to 17 years are obese, which increases the risk of developing co-morbidities such as type 2 diabetes and cardiovascular disease.

Mental disorders
Approximately 15-20% of children and adolescents in Canada have one or more mental disorders such as anxiety, depression, attention deficit hyperactivity disorder. Suicide remains one of the leading causes of death among adolescents in Canada (about 20% of all deaths).

Accidents and injuries (motor vehicle crashes, falls) remain the leading cause of death among older children (about 25% of all deaths).