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Should You Get Life Insurance for Your Baby?

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Key Takeaways
  • In Canada, life insurance for infants is primarily available as whole life insurance or as a child rider on an adult policy.
  • Many companies do not sell term life insurance to minors in Canada.
  • The biggest advantage of infant life insurance is guaranteeing their future insurability, regardless of future health issues.
  • Most infants don’t require life insurance—but for families who want it, adult term policies with a child rider are typically the best option.

Do you need life insurance for your baby?

You probably don’t need life insurance for your baby. Life insurance is designed to replace income and/or offer financial security for dependents, and babies don’t have either of these. 

Worried about costs if your child passes away? A savings account is a better way to cover unexpected costs due to the death of a child, like funeral expenses and your own income replacement while you take time off work.

Worried about a child’s future costs? It’s a good idea to purchase your own life insurance policy, pay down your debts, and set up an RESP for your baby’s post-secondary education costs.

There are two reasons you might consider life insurance for an infant:

  • You’re preparing for a worst-case scenario
  • You’re setting them up to convert to an adult policy without a medical exam

While PolicyMe does not offer life insurance for infants or children, each PolicyMe term life insurance policy includes $10,000 in free coverage for each of your children.

Find an affordable term policy—and enjoy $10K in free child coverage.

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Pros and cons of infant life insurance

While life insurance for infants can offer guaranteed insurability for the future, it’s expensive and the money may be better off invested in an RESP or TFSA.

  • Guaranteed insurability: Some policies lock in lifelong coverage at a young age regardless of a child’s future health conditions.
  • Cash value: Permanent policies build cash value over time, which the child can use later in life.
  • Lower premiums when purchased early: You’ll find that premiums are more affordable when starting at birth, and they’re locked in for life on a permanent policy.
  • Complexity: Permanent policies are complex and long-term with limited flexibility.
  • Expensive: The overall cost is higher since premiums (and coverage) are lifelong.
  • Opportunity cost: There may be better uses for the money spent on premiums, such as investing or contributing to RESP.
  • Slow cash value growth: The savings component in permanent life insurance takes time to build, and it’s often undercut by administrative fees.

If you’re seeking financial security for your baby, alternatives like RESPs or savings/investment accounts may offer greater flexibility, potentially higher returns, and easier access to the funds.

Types of life insurance for infants

There are three types of life insurance for infants in Canada:
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  • Term life insurance offers coverage for a set period of time, typically until the child reaches a certain age. The child is the policyholder and parents can be the beneficiaries. Note, however, that this coverage is rare and most insurers don’t offer term policies for children.
  • Whole life insurance is a type of permanent life insurance policy with a cash value component that grows over time. The child is the policyholder. Premiums are high, but this could be an option for babies who are likely to face future health concerns.
  • Child riders are add-ons to adult life insurance policies. A child rider covers a child until they reach a certain age, and this is typically the most affordable way to get infant life insurance (or coverage for any child).

How much life insurance should you buy for your baby?

Most Canadian families don’t need life insurance coverage for infants; however, if you’re interested in coverage, $10,000 to $25,000 should be sufficient. This payout is mainly to cover funeral costs since, unlike adult policies, infant life insurance is not about income replacement. If your own policy offers complimentary child coverage, that may be all you need. 

For families with a history of chronic illness, consider $25,000 to $100,000 of coverage with a permanent policy, allowing the child to lock in low life insurance rates now.

For families with a child who will be a lifelong dependent, $100,000 to $500,000 of coverage as a whole life policy is a good idea for the adults. This offers financial security for long-term care, future expenses, and any unexpected costs. Plus, it builds cash value for later access, if needed.

How to buy life insurance for infants

To buy life insurance for infants (or add a child rider), you will need the child’s:

  • Full name
  • Date of birth
  • Social insurance number

Depending on the type of policy you’re purchasing, you may be asked a few health-related questions to assess the child’s health status. There is not usually a medical exam.

Consider premium payments, coverage levels, and fees over time to pick the right policy for your loved ones.

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Many life insurance companies only offer coverage for policyholders 18+

Since minors can’t legally sign contracts, the owner is usually an adult until the child reaches the age of majority—even if the policy is for a child. Then, legal ownership transfers to the child.

BMO, Sun Life, and Industrial Alliance offer life insurance for children under 18. PolicyMe includes $10,000 in free child coverage for each child when you secure an adult term life policy.

Find affordable term life insurance with PolicyMe.

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FAQ: Life insurance for infants

Bonnie Stinson is an insurance writer and researcher in Toronto with a decade of experience producing helpful, accurate content for Canadians. They have published resources for some of Canada's most innovative and consumer-trusted companies in the health, legal, and fintech sectors. 

Bonnie Stinson is an insurance writer and researcher in Toronto with a decade of experience producing helpful, accurate content for Canadians. They have published resources for some of Canada's most innovative and consumer-trusted companies in the health, legal, and fintech sectors.