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How To Determine If You Need Life Insurance For Your Child

kokou adzo



A Happy Elderly Couple Holding a Document

Discussing life insurance for children can be a sensitive topic. But the benefits it brings in times of unforeseen tragedies are worth considering. The primary advantage of such a policy is the peace of mind it offers. Having this protection in place allows you to prioritize your family’s emotional well-being over financial concerns.

The idea of life insurance for your child might seem strange, given that the primary function of life insurance is to offset potential income loss. Children, obviously, don’t contribute to household income. So, one might question the rationale behind such a policy. However, there are several reasons why getting life insurance for your child makes a lot of sense. We look into the advantages of having life insurance early on. 

Affordable Premiums

Policies for children often come with lower premiums due to their youth. By initiating a policy early, you can lock in these affordable rates, ensuring long-term coverage. Be sure to look into the policy’s payout conditions. Some policies might have waiting periods or specific terms around illness-related claims. You can also opt for policies with a “guaranteed insurability” provision. This allows the child to purchase additional coverage later without a medical examination.

Savings Component

Some policies, like whole life insurance, have a savings or investment component that can grow over time. This can be seen as a financial tool that the child can use in the future, be it for education, a first home, or other significant expenses. Consider this cash value as a financial tool. You can withdraw a portion of the cash value up to the amount of premiums paid. However, withdrawals will reduce the policy’s cash value and death benefit. Withdrawals up to the amount of premiums paid are usually tax-free, but any amount exceeding that may be subject to taxes.

You can also borrow against the policy, and the interest rates are usually lower than those for personal loans or credit cards. But be aware that if the loan is not repaid, the outstanding amount plus interest will be deducted from the death benefit when the insured passes away.

Medical Bills

When a child faces a prolonged illness, the associated medical costs can accumulate rapidly and become overwhelming. Even with comprehensive health insurance, out-of-pocket expenses might not be covered. For instance, it may cover hospital stays, but often, there are limits on the number of days covered. Any days beyond that limit will need to be paid out of pocket. Physical therapy, occupational therapy, or other rehabilitation services might not be entirely covered by health insurance, or they may have caps on the number of sessions.

Life insurance policies offer riders or add-ons that provide a lump sum payment if the child is diagnosed with a critical illness listed in the policy, such as cancer, heart disease, or stroke. This payment can cover medical expenses, travel for treatment, home modifications, or any other costs related to the child’s illness and recovery. Adding riders to a life insurance policy is usually more cost-effective than purchasing separate standalone policies for each type of coverage.

Funeral Expenses

Funerals in places like Canada can be costly. A child’s life insurance policy can help cover these expenses, alleviating an additional financial burden during a challenging time. Always check the terms and conditions of your policy to ensure it covers funeral costs. Some policies might even include bereavement counselling or other supportive services.

Insurance provides peace of mind to parents, knowing they have a financial cushion should unexpected events arise. It allows you the possibility of an extended break from professional commitments without the overhanging dread of monetary implications. By securing a policy early on, you can ensure that when the child becomes an adult, they’ll have one less financial planning item to worry about. 

Kokou Adzo is the editor and author of He is passionate about business and tech, and brings you the latest Startup news and information. He graduated from university of Siena (Italy) and Rennes (France) in Communications and Political Science with a Master's Degree. He manages the editorial operations at

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