Compare and Buy Canada's Best Children's Life Insurance

Children’s life insurance is a permanent (whole life insurance) policy that is issued on the life of a child or grandchild in Canada. Children’s whole life insurance policies provide:

• Lifelong insurance coverage as long as the premiums are paid
• Cash value accumulation that the child can use later in life for major goals such as paying for education, buying a car, or making a down payment on a first home
• The benefit of getting an insurability guarantee at a young age
• Fixed or level premiums, especially if the policy is structured as a limited pay whole life plan where premiums are paid for a set number of years after which the policy is fully paid-up

In short, children’s life insurance combines lifelong protection with a steady savings component, giving your child or grandchild a financial head start and peace of mind.

Cash value in children’s whole life insurance refers to the savings component that is included in these policies, in addition to the guaranteed death benefit. A portion of the premiums that are paid by you for your child’s policy go towards building the cash value which grows on a tax-deferred basis. Unless the cash value is withdrawn, there is no tax applicable on it.

The cash value typically increases over time due to interest and investment earnings. Policyholders can choose to withdraw their cash surrender value or can take out loans using their policy’s cash value as collateral.

As long as premiums are paid for the children’s life insurance, the policy remains in force and gradually builds cash value; a savings reserve that grows over time based on the insurer’s guarantees.

In the case of a participating whole life plan, the policy could also earn dividends (based on the discretion of the insurer) that one could use to pay for additional coverage or reduce future premiums.

Children’s life insurance is a thoughtful and practical way for parents to secure lifelong coverage and build long-term savings that grow as their child grows.

Key benefits of children’s life insurance are:

• Lifelong financial protection: The policy stays in force for the child’s life, ensuring future financial stability
• Affordable premiums: Buying early ensures a low premium that remains stable even when the child is older
• Financial flexibility: Access the cash value later for education or other goals
• A legacy that grows: Build a financial gift that increases in value over time
• Peace of mind: Know they’ll always have coverage, no matter what life brings

For grandparents, buying life insurance for a grandchild isn’t just a policy; it’s a lasting gift of love and security. Child insurance is affordable to start, grow in cash value over time, and ensure a lifelong protection for their grandchildren.

A Registered Education Savings Plan (RESP) is designed specifically to fund post-secondary studies. RESP has a lifetime contribution of  $50,000 and can only be used for education at eligible institutions on the Designated Educational Institution List. If the beneficiary does not attend a qualifying program, government grants must be returned and investment income may be withdrawn as an Accumulated Income Payment (AIP), which is subject to tax and possible penalties.

Children’s life insurance, on the other hand, provides lifelong protection along with flexibility. It builds cash value over time, which can be accessed for any goal including education, a first car, a home down payment, or even starting a business. It’s a way to combine financial protection with long-term growth potential.

A children’s term insurance rider is an optional add-on available for most insurance policies that offers term insurance protection for the children of the insured at an additional cost. The child term rider offers no cash value, the coverage is not permanent, and the maximum death benefit is substantially lower than a standalone policy.

A child rider can be typically added to the parent’s insurance policy when they apply for coverage, but age limits and rules may differ by insurer.

Most insurers require child rider addition at policy issue, but some allow later addition with evidence of insurability. Child rider coverage typically ends when the child turns 25 or the parent turns 65, though exact terms may vary by insurers. Some insurers allow the child rider to be converted to a permanent insurance policy, typically between the age of 21 and 25, though conversion options may vary by providers.

In contrast, children’s life insurance is a standalone whole life policy that offers lifelong protection and cash value growth. Children’s life insurance can be purchased independently by a parent, grandparent, or legal guardian and continues for life as long as premiums are paid.

The cost of a children’s life insurance premium depends on several factors, including age,  gender (where permitted by regulations), coverage amount, insurer, policy type (participating or non-participating), and premium payment period. Gender-based pricing is permitted for life insurance in most provinces, but not in Quebec for individual life insurance as of 2024.

For example, the estimated monthly premium for a three-year-old boy’s $100,000 whole life insurance policy is likely to be between $22 and $25 per month in 2025, with premiums paid for life. Alternatively, $250,000 in coverage for a one-year-old girl could be about $95–$105 per month with a 20–Pay 20 option.