As a parent living in Canada, you might wonder which company provides the best life insurance for children. You’ve probably watched some parents suffer in pain over the loss of their child.

This pain is worse if they have to shoulder unplanned funeral expenses. Worse, if this happens at a period when they’re experiencing financial constraints.

The best life insurance for children is from companies that offer low premiums as well as ad-ons like accidental coverage. Amongst these companies includes; Dundas Life, Policyadvisor, Milife, and lots more.

Other features some of these life insurance companies provide is a future investment for your children’s college fees.

If you are ready to decide to buy a life insurance policy for your kid, this piece is for you. Here you’d learn about the best life insurance for children, the features of life insurance policies for kids, their pros and cons, etc.

Features of life insurance for kids

The features of life insurance for kids include;

Coverage for child’s death

Funerals can be quite expensive. However, if you’ve got life insurance for a child who passed away, you’d receive a lump sum of money to help cater for the funeral expenses. If your child lives, that lump sum can go into paying their college fees. This brings so much peace of mind.

Lump sum payout to designated beneficiaries

“The lump sum payout” feature in a life insurance policy for kids means that if something were to happen to the child, the insurance company would pay a large sum of money, all at once, to the people designated as beneficiaries. This is typically the parents of the child.

So, if the child passes away, the beneficiaries can use this money for any expenses related to the child’s death. This includes; funeral costs. Also, it can be used for future expenses for the child’s education. It’s like a safety net for the family, providing financial support during a difficult time.

Typically low premiums

This feature on the best life insurance for kids means the monthly or annual cost of the policy is quite cheap compared to other types of insurance. This is because the chances of a child passing away are quite low. So, the insurance company doesn’t need to charge a lot to cover the potential payout.

It’s like buying peace of mind for a small price, which can be affordable for most families. You can think of it as buying a small price of protection for a very small price.

However, it can provide a lot of benefits in case the worst happens. It’s a good way to ensure your child is financially protected without breaking the bank.

Low death benefit amount

This feature is found in the best life insurance for children. It means that the amount of money the insurance company will pay out if the child dies is not the same as for adults.

This is because the purpose of life insurance for kids is to provide some financial protection for the child’s family. It isn’t designed for providing a significant sum of money.

It’s like buying a small safety net that would help the family with funeral expenses and other immediate expenses. However, it’s not meant to replace the loss of the child.

It’s also worth noting that a lower death benefit amount also helps keep the policy’s cost low for the parents. So, it provides the necessary protection but at an affordable cost.

Accidental coverage

Companies that offer the best life insurance for children have this feature. Here, the policy provides additional protection in the case of the accidental death of the child. It means that if the child dies from an accident, the insurance company will pay an additional benefit aside from the regular death benefit.

This can be especially valuable for families who live in high-risk areas or have more active children. This is because they are more prone to accidental death. It’s like an extra layer of protection to ensure that your family is financially covered in case of an accident.

Some companies may offer this as an add-on feature to children’s standard life insurance policy. However, not all companies offer this option.

Option to convert to adult policy

This means that at a certain point, usually when the child reaches adulthood. The policyholder has the option to convert their child’s life insurance policy into an adult policy.

This is a great feature because it allows the policyholder to continue to protect their child even after they have grown up. For example, a parent can purchase a life insurance policy for their child when they are born.

However, as the child grows up, they can convert it to an adult policy. This saves them the cost of having to purchase a new policy.

It’s like having a policy that grows with your child, providing them coverage throughout their whole life. Also, this will likely have a better rate as the child would have grown into a healthy adult. So, it’s a convenient and cost-effective way to continue to protect your loved ones.

Can be purchased by parent or guardian

This means that the policy is typically purchased by the parent or legal guardian of the child. They are the ones who will be responsible for paying the premiums and making decisions about the policy on behalf of the child.

This is important because children, by definition, are not legally able to enter into contracts, including insurance policies.

It also means that parents or guardians are the ones who would benefit from the policy in case of the child’s death. It would be a way for parents and guardians to ensure that their child’s future is protected, even if something were to happen to the child.

It’s important to note that, in some cases, if the child is a minor, a parent or guardian will need to provide consent for the policy to be taken out on their behalf. The purchase is made by the parent or guardian.

Age limits for purchase

The “age limit” is another feature of the best life insurance for children.  Here, there’s a certain age range within which the policy can be purchased for a child. This age range varies depending on the insurance company. However, it’s typically between birth and somewhere between 18 to 21 years of age.

It’s important to note that once a child reaches the upper age limit, they can’t purchase a life insurance policy as a child. Rather, they would have to apply as an adult.

It’s like having a window of opportunity to protect your child’s future at an affordable rate, but it closes as the child grows up. This is why it’s important to think about purchasing a policy while the child is still young and within the age limit.

Once the child reaches the age limit, the rate for coverage would be based on the adult rate. This might be higher than if the policy was purchased when the child was younger.

Best life insurance for children

Let’s walk you through the best life insurance for children, especially if you live in Canada.

Dundas Life

Dundas Life is an insurance company with branches in Toronto and Ontario, Canada. Amongst the service they offer is Life Insurance for kids and adults. If you already have a life insurance policy with them as an adult, you can add a rider to it to cover your child. 

Another option you can choose for your child is Stand Alone Term Renewable Coverage. Here, you simply buy the insurance policy for your child for a stated number of years. At the end of the stipulated years, you have the option of renewing the policy.

The third option on Dundas Life is Whole Life Coverage. Here, it covers your child’s entire life. However, it is more expensive than the other life insurance policies.

Pros

• Provides financial protection for children in the event of their untimely death.

• Children can be covered by life insurance from a young age, which can be beneficial for their long-term financial security.

• Premiums for life insurance policies for children are lower than those for adult policies.

• It serves as a future investment.

• Some policies on Dundas offer additional riders like accidental death benefit and critical illness benefit.

• Premiums paid for children’s life insurance policies may be eligible for tax benefits.

Cons

• Limited applicability. This is because the policy may not be suitable for all children. Particularly those with pre-existing medical conditions.

PolicyAdvisor

This company is an insurance broker. That is, they’d help you scan through the multitude of insurance companies that are affiliated with them. Afterward, they’d give you the best policy that suits your need. The sole aim of the company is to help Canadians get insurance easily.

Pros

• Provides dedicated, licensed insurance advisor that guides you every step of the way.
• Allows you to compare rates from different insurance companies to help you make the best decision.
• Queries are attended to through emails, calls, and live chats.
• The insurance products of Policyadvisor are available in Ontario, British Columbia, Alberta, and Manitoba.
• Data collected by PolicyAdvisor is safe and not shared with third parties.

Cons

• The insurance broker does not cater to children in all parts of Canada.

Milife insurance

This company covers both insurance and investment for your children. That is, you can buy a whole life insurance policy for your child and get a lump sum if the child dies. Also, you can access the cash at any time if your desire emergency funds. 

Milife Insurance company offers a savings option for a child or an entire family. In this case, you save some cash for an agreed period.

Pros

• They offer a whole life insurance policy for kids, which covers future critical illnesses that may Mar their eligibility for it. 
• Lower premiums are available.
• Access to the accumulated cash at any time you desire. This can serve as an emergency fund to pay your child’s college fees.
• At 18, your child can switch to an adult plan.
• They offer savings plans for kids. They are the only company with this option in Canada.

Cons

• A term life insurance option is not available.

Canadalife

Canadalife is one of the biggest financial institutions in Canada that offers life insurance for kids. They are rated among the best life insurance for kids. They offer multiple life insurance policies to help you get some time off work when the unthinkable happens. You can get a lump sum of up to $10,000 to cover the funeral costs. Also, they are rated A+ from A.M.

Pros

• Access to up to $10,000 as a funeral cost.
• Funds can be converted to cater to your child’s future expenses.
• Access to a financial advisor that guides you on the best insurance policy that fits your child and pocket.
• Switch from a child’s plan to an adult plan when your child reaches adulthood.
• Get cash value in the form of dividends on whole life insurance plans.

Cons

• The limited benefit to the deceased family at the time of death.

Ratehub

This is another amazing financial company that connects Canadians to insurance companies that are affiliated with them. The majority of those companies offer both whole life and term life insurance policies. Also, when kids reach the age of 25, they can switch to a standalone adult plan.

Pros

• Offers access to both term life and whole life insurance policies for children.
• Some affiliated companies cover multiple children at a go for low premiums.
• Term life insurance plans start at $3 per month for kids, while whole life insurance is at $50 per month.
• Accumulated dividends on whole-life plans can be accessed at the time of emergency

Cons

• Limited death benefit. There is a stipulated amount to be paid to the deceased family, irrespective of the amount saved.

Canada Protection Plan

This company is rated among the best life insurance for children in Canada. They serve as the umbrella that offers shade for Canadians who have suffered rejection from several insurance companies.

They offer life insurance for kids with certain ailments. However, the plans available for these categories of kids are low-priced.

Pros

• No-medical coverage across all health issues. They’d pay the child’s family in the event of death but won’t pay for medical expenses.
• Easy access through a simple online application.
• Lower premiums for sick kids compared to other companies in Canada.
• Annual premiums can be paid through credit cards.

Cons

• The long waiting period to complete medical writing.

Life insurance for kids explained

Life insurance for children is a type of insurance policy that is taken out on the life of a child. The purpose of this type of insurance is to provide financial protection for the child’s family in the event of their death.

When you take out a life insurance policy for a child, you would typically pay a small premium each month. In the event of the child’s death, the insurance company would pay out a lump sum to the child’s beneficiaries (usually the parents).

This money can be used to pay for funeral expenses, or it can be saved for another child’s future education or other expenses.

It’s important to note that life insurance for children is generally quite inexpensive because the child is unlikely to die during the policy term.

Additionally, the death benefit for child policies is generally quite low. This is because this type of insurance’s primary purpose is to provide financial protection for the child’s family.

Also, when it comes to life insurance for kids, you have two options: term policy or whole life policy.

Term policy

A term policy is like a rental agreement, where you are paying for the coverage for a specific period. It could be 10, 20, or 30 years. If the child passes away within that period, the beneficiaries will receive the death benefit. However, if the child outlives the policy, the policy will end, and the beneficiaries will not receive any death benefit.

Whole life policy

A whole life policy is like buying a property. It’s lifetime coverage. It does not have a set expiration date as long as the premiums are paid. Also, the coverage will continue until the death of the child. The beneficiaries will receive the death benefit in any case.

Both options have their pros and cons; it’s important to weigh your options and consider what’s best for your family. A term policy may be more affordable in the short term, while a whole-life policy may provide more security in the long term.

Summary of life insurance for children

It’s important to consider and weigh the pros and cons of having life insurance for children. Some parents find it comforting to have the peace of mind that comes with having life insurance for their children. While others may feel that the cost of the policy is not worth the potential benefit.

Ultimately, the decision of whether or not to purchase the best life insurance for children is a personal one. This decision should be made after careful consideration.

Other types of insurance

• Term Life Insurance
• Mortgage Life Insurance
• Disability Life Insurance
• Critical Illness Insurance
• Senior Life Insurance
• Life Insurance for Adults