Give Your Baby the Gift of Life…and Baby Life Insurance
While purchasing life insurance for a baby may seem a bit dark, we promise it’s quite the opposite. Keep reading to understand why it’s better to buy a whole life insurance policy for your little one sooner rather than later. (And why it means you're planning for them to live a nice, long life!)
Whether you’re welcoming a new addition for the first time or the fifth, it’s safe to say you’d do anything to protect that precious little life in your arms. And as you look into those wide, trusting eyes, it suddenly hits you – like really hits you – that they depend on you for, well, everything. (No pressure, eh?) So why not consider giving them the gift of baby life insurance?
Because here’s the thing: Newborns grow into babies, babies into toddlers, and toddlers into teenagers – eventually. And of course, as our children grow, they inevitably become more independent. But that doesn’t mean their safety and well-being become any less of a priority to loving parents. Did you know that baby life insurance means you are thinking (far) ahead into their future?
Sure, purchasing life insurance for newborns may seem a bit dark, but we promise it’s quite the opposite. Keep reading to understand why it’s better to buy a whole life insurance policy for your little one sooner rather than later.
Baby life insurance comes with a lifetime of guaranteed protection
Believe it or not, life insurance for kids is a gift you can give baby today that can last their entire lifetime. How? Well, it’s simple, really.
Of all the items that you’ll need to buy your child throughout their life, whole life insurance is one of the few products that actually comes with not one, but three, lifetime guarantees:
Guarantees come in threes
1. Guaranteed premiums – This means that the amount you pay for the policy will never go up, despite inflation, rate increases at the Bank of Canada, or other things we can’t predict about the economy.
2. Guaranteed access to the cash value1 – A whole life policy comes with a cash portion that accumulates within the policy over time, and can be accessed when your child needs it most.
3. Guaranteed death benefit – This is the lump-sum payment made to designated family members or other loved ones in case of death. Of course, this is not the reason parents buy baby life insurance – quite the opposite! Purchasing life insurance for a baby is an investment in their future.
Baby life insurance is an affordable way to plan for baby’s future
While you may be concerned about what can feel like a never-ending list of child-rearing expenses at this stage of baby’s life (diapers… so many diapers!), child life insurance is one expense that is much more affordable the earlier you get it.
Cheaper than your coffee run
That’s right, getting a policy for a newborn baby can cost you around $20 a month2 – that’s probably cheaper than your daily coffee run over the course of a month! Even better, you can choose a plan where the cost remains the same throughout baby’s lifetime (that guaranteed premium we mentioned above), making it easier for your child to take on the payments once they reach adulthood. And then there’s always the option of purchasing a guaranteed 20-pay whole life policy, meaning they won’t have to worry about taking on the cost, since payments stop after twenty years.
The earlier, the better
Here’s the catch: If you wait to make the purchase, you’re risking an incremental increase in price with each birthday. While minimal, a few extra dollars a month can add up over the years. Another reason to commit to purchasing a whole life policy for your baby within their first year of life? You can take advantage of our Bundles of Joy Benefit, and receive a $100 baby bonus. More savings!
A tax-preferred emergency fund
Speaking of savings, remember that cash value we told you about? Well, think of it as a tax-preferred savings plan that continues to accumulate over baby’s lifetime – a nice little emergency fund that can be accessed when they need it in the future – to help pay for post-secondary education, a down payment on a home, or the trip of their dreams. (And if you take advantage of the compound effect, they just might have enough for a down payment… no joke!)
With baby life insurance, it’s easy to transfer ownership when the time is right
As the owner of the policy, you are responsible for making the payments (otherwise known as the “premium”). In the future, it’s pretty simple to transfer ownership of the policy to your adult child – possibly tax-free – under rules set out in the Income Tax Act. (For more information on this tax-savings opportunity, we recommend speaking to an accountant.) And if you don’t want them to have to worry about taking on the payments, speak with an advisor about the 20-pay whole life option we mentioned above.
As the new policyowner, your adult child can choose to name a new beneficiary (i.e., the person(s) they choose to receive their life insurance payment in the event of their death) – like their spouse or children – as they step into your shoes and begin to think of their loved ones’ financial futures.
A fourth guarantee… if you so choose!
One last thing: At the time of purchase, you can add an extra something to your baby’s policy for just a few extra dollars a month. It’s called the Guaranteed Insurability Option (GIO), and it will give your baby the freedom to purchase additional life insurance later – without the need for a medical exam. This is huge, considering a person’s current health status and other risk factors determine the price of their plan.
With a GIO, your child won’t have to worry that an unexpected illness, a high-risk career, or participation in extreme sports might make life insurance significantly more expensive down the road.
Why choose Serenia Life for baby life insurance?
As a member-based organization with roots that go back nearly 100 years, we encourage kindness by sharing a portion of our profits through community outreach, fundraising, and unique member benefits that help Canadians support their family, their community, and the causes they care about. The more we grow, the more we can give.
We provide members with access to a growing collection of member benefits that make a positive impact on their lives and the lives of others, such as:
- $1,000 post-secondary scholarships
- $250 seed funding towards fundraising events
- Free digital wills (value: $189), or $150 reimbursed when drafting/updating a will through a lawyer
- And much more
View a full list of our member benefits.
The bottom line
Of course, no new parent wants to think about the dangers that may lie ahead, but every parent wants to keep their babies safe – no matter what their age. Investing in your little one’s financial future is one way to protect them (and possibly their babies – your future grandchildren!) when you may not be around to do so anymore.
Baby life insurance really is the gift that lasts a lifetime!
Get a quote
One of the best ways a parent can set a baby up for financial success is by purchasing life insurance while it’s still super affordable. To learn more about how life insurance fits into your financial plan, book a no-obligation consultation with a Serenia Life advisor to get a quote today!
Disclaimers
This blog post contains general information only. Because each person’s situation is unique, it is best to speak with a qualified professional before making any final decisions. Serenia Life Financial does not advise clients on tax, accounting, or legal matters.
1Cash values are accessible via a withdrawal, policy loan, or surrender. These may be subject to taxation and a tax slip may be issued. Accessing the policy’s cash value will reduce the available cash surrender value and death benefit.
2Monthly cost for a newborn female (0-12 months) with $25,000 in coverage
