I’m going to be honest, buying life insurance for kids isn’t the most cheerful of topics. For most parents, this type of insurance is uncomfortable. After all, childhood is supposed to be about swings, scraped knees, and ice cream. Not life insurance.
But here’s the thing: Life insurance for children isn’t just about preparing for the worst. It’s about giving your child a head start in life. Whether it’s ensuring future insurability, covering unexpected costs, or creating a cash-value nest egg, insurance is one of the smartest decisions you make as a parent.
At TermCanada, we help families across Canada navigate life insurance options, and this is one of them. Let’s break it down in a way that feels less clinical and more empowering.
Purchasing life insurance for a child can provide a safety net if the worst should happen, but it can also protect them well into adulthood.
There are different plans that parents, grandparents or guardians can buy, including standalone whole life or term life insurance policies and riders to their own policy.
The best life insurance companies for children in August 2025, CNBC
Financial Support When It’s Needed Most
No parent wants to imagine the loss of a child. There’s nothing worse that I can imagine. However, families who have been through this kind of tragedy will tell you that the healing takes some serious time. Some parents need months away from work to grieve, support siblings, or simply function again.
Unfortunately, many Canadians can’t afford that kind of time off. A life insurance policy for a child helps cover the costs of taking time off from work.
And, yes, there are final expenses to consider as well. Funeral costs can easily reach $15,000 to $20,000, and not every family has emergency funds ready to cover them. Having insurance in place doesn’t lessen the pain, but it does remove financial stress when you need clarity.
Future Insurability: A Hidden Superpower
Here’s where life insurance for kids shines as a strategic decision. By getting coverage when your child is young and healthy, you lock in their insurability for life. So even if their health changes down the road, they’re covered!
Think about how unpredictable life is. A diagnosis like Type 1 diabetes, ADHD, or even anxiety makes getting affordable insurance as an adult harder. Add to that the rise in risky hobbies, mental health concerns, and emerging genetic markers that insurers red flag. You just never know what the future holds.
Buying a life insurance policy for your child early locks in coverage later on. In a world full of uncertainty, that’s powerful peace of mind.
Option 1: Adding a Child Term Rider (Simple & Affordable)
If you already have a term life policy or plan to apply for one, adding a child term rider is a low-cost way to protect your kids.
For about $10 a month, you can cover all your children, including future children, with a benefit ranging from $10,000 to $30,000 per child. It’s not just budget-friendly, it’s incredibly flexible. Most policies allow you to convert this rider into permanent insurance later on, with no medical exam required.
It’s a great starter move for budget-conscious families who still want future options in place. And if you’re applying for life insurance through TermCanada, your advisor can add this rider during your quote process.
Option 2: Individual Term Life Insurance for Kids
Some parents prefer to give their children standalone coverage. Companies like Ivari offer 30-year term life insurance policies for children as young as 5. For example, a healthy 5-year-old boy could get $250,000 in coverage for roughly $30/month.
This coverage remains level until age 35, and, like adult policies, you can convert it to permanent insurance without providing proof of insurability.
Sure, it’s a bigger commitment, but it provides a larger death benefit, more extended protection, and future flexibility. By the time your child hits adulthood, they’ll already have strong coverage in place.
Option 3: Participating Whole Life Insurance (Long-Term Value)
Now we’re stepping into premium territory. Whole life insurance for kids. These policies offer lifelong coverage and build cash value over time. That means part of your monthly premium goes into a savings component that grows tax-deferred.
Over time, that cash value can be used to help pay for university, a business start-up, or a first home. Some policies even allow borrowing against the policy later in life.
Can you imagine how this would come in handy as your kids grow up?
Equitable Life, for instance, offers a 20-Pay Whole Life Policy with a future insurability rider that allows your child to purchase up to $500,000 in additional coverage later in life, without a medical exam.
Here’s a real-world example:
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A parent pays $30/month for 20 years on a $30,000 policy.
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At year 20, the policy is fully paid-up for life.
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The policy continues to grow in both death benefit and cash value.
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By age 25, there could be over $4,000 in cash value, with no further payments.
You’ve not only given them lifelong coverage but also a financial asset they can carry into adulthood. Win, win!
Whole Life vs. Term for Kids: What Works Best?
This really comes down to your goals and your budget. If your priority is affordability, go with a term rider. It’s simple, cost-effective, and still gives you future options.
If you want something with guaranteed value that can be handed over to your child later, whole life might be worth the investment. You’re locking in protection and building an asset… without any of the usual approval hurdles that typically face them in adulthood.
What About a Policy with No Medical Exam?
One of the coolest parts of life insurance for kids is how easy it is to get started. Kids are typically healthy, and insurers know that. As a result, many companies offer simplified issue or guaranteed issue policies that skip the needles, doctor’s visits, and long health questionnaires.
You’ll usually just need to answer a few basic questions about your child’s health and family medical history. And if your child is under 10, the process is even more streamlined.
Now, if you’re applying for larger coverage amounts (especially over $250,000), some carriers might ask a few more in-depth health questions. But even then, it’s far from the full medical underwriting experience adults go through.
And here’s the good news for parents of children with serious pre-existing conditions: you still have options. Some companies provide guaranteed issue coverage, which doesn’t ask about your child’s health at all. These policies may have smaller benefit amounts, but they guarantee future insurability, even if no other coverage is possible.
At Term Canada, we recognize that no two families are the same. Whether your child is perfectly healthy, living with a condition like ADHD or diabetes, or has already faced medical challenges, we’ll take you through the available options. Our goal is to make sure you can protect your child, no matter what life brings.
Final Thoughts: A Loving Legacy
No parent ever wants to think about losing a child. But every parent wants to protect them, now and in the future. Life insurance for kids may seem like overkill, but it’s a terrific product.
Whether you start with a rider or invest in a full policy, the impact can last a lifetime. You’re not just buying protection, you’re giving your child options, security, and a bit of financial freedom in a world that’s anything but certain.
Let TermCanada help you choose the right path.
