Life Insurance for Newborns

Posted on January 16, 2014 and updated March 20, 2018 in Insurance Types, Life Insurance Canada News, Life Insurance for Children 3 min read

According to Statistics Canada, there are more than 350,000 children born in Canada every year. 

Many financial experts say that life insurance for newborns doesn’t make sense. The common rationale is that you’re not financially dependent on your baby, but rather, your baby is financially dependent on you. This makes sense on the surface, but what about the parent who likes the idea of giving the child a head start?

If you look at it this way, insuring a newborn offers plenty of advantages. Chantal Marr, President of LSM Insurance and mother of three, cites the following benefits.

1. The child can lock in early at a very favourable rate. Many permanent plans can start at premiums as low as $12 a month.

2. You are guaranteeing your child’s future insurability. Knock on wood that your child is in good health at birth, but that good health may not always stick around, and taking out insurance on them at a young age allows them to guarantee their current health status. Many policies even allow you to add a guaranteed insurability option, where you can upgrade their coverage at different points in the future without a medical exam.

3. The policies can build cash value. Sure, there are other ways you can invest your money, but some participating whole life policies in Canada have rates of return in excess of 6 per cent compared with other low-risk investments. This rate of return can be quite attractive.

4. The policies can be paid up in a limited number of years. Many parents like the idea of having a plan that can be given to their child and be paid up before the child begins working. Most Whole life plans can be paid up in 10, 15, or 20 years.

5. Parents who don’t want to set aside a lot of money can add a children’s term rider to their existing policy. Many of these children’s term riders can be added for as little as $4 a month.

In fact, the younger someone is when you buy them a life insurance policy, the cheaper the policy is. A recent article in the National Post quoted Harley Lockhart, chairman of Advocis, the Financial Advisors’ Association of Canada, saying that premiums for a young insured person can cost less than a phone bill.

Just as parents are protecting their kids against possible insurability, an insured child is also protecting their parents against financial hardship. The death of a child means many parents will not be able to go back to work right away and will need a way to maintain their finances before they are ready to restart their lives again.

However, if you are young, the advice is to take care of your present — such as debts, student loans, and RRSPs before considering life insurance. It’s important you make sure these are covered before considering life insurance for your future.

For more details on life insurance for newborns, please contact us at 1-866-899-4849, or visit our Whole Life Insurance Quote Page.

Jason Biggs
Jason Biggs

Hello, I’m just trying to learn a bit about child insurance.

Why is the minimum age for an insurable child set at 15 days?


Syed Raza
Syed Raza

Hi Jason,

Thanks for the good question.

The risk of a newborn death is higher in the early days of their life. Almost half of child deaths that occur under age 5 happen during the neonatal period, which is the first 28 days of a child’s life.

Furthermore, within the child’s first month of life, 75% of deaths occur in the first 7 days.

Hopefully this explains some of the reasons why insurance companies will exclude death occurring in the first 15 days.


LSM Insurance
LSM Insurance

Richard good point about adults appreciating the fact that their parents bought them insurance.

LSM Insurance
LSM Insurance

I believe in buying permanent insurance for children and I did what I am preaching. I bought my 2 boys participating policies of $50,000 each. Every year the insurance increases at a greater rate than inflation. In fact the insurance has doubled and they have now more than $100,000 of insurance for the same premium. At age 25, they will have more than $250,000 of insurance. If they buy a house they don’t have to worry about mortgage insurance… in fact they will never have to worry about buying insurance ever as this insurance will continue to increase… I have… Read more »

LSM Insurance
LSM Insurance

Ami, I agree making sure the primary breadwinner(s) are insured is top priority.

But insuring a child has a lot benefits. My father a CA at the time took out small Whole Life policies on myself and my two brothers all of which we’ve kept. Not only is the policy a very good deal when you crunch the numbers but we all benefited from an unexpected windfall when they demutualized.

LSM Insurance
LSM Insurance

In my view, the combination of degree of potential negative impact and probability of an event giving rise to such negative impact should be a primary consideration to establish priority for risk-transfer (insurance). Life insurance on children is often pitched to impulse like trinkets at the check-out counter with little, if any, real value to the consumer. One of the pitches is “guaranteed insurability”. Read the contract! ..and keep in mind that it is far more likely that the child will be able to purchase proper coverage at lower costs in the future than the coverage that is guaranteed under… Read more »