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September 21, 2023

Child Life Insurance: Give Your Baby the Gift of Life…and Life Insurance

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 child life insurance?

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 the right insurance means you are thinking (far) ahead into their future?

Sure, purchasing life insurance for a baby may seem a bit dark, but we promise it’s quite the opposite. Keep reading for the top three reasons it’s better to buy a whole life insurance policy for your little one sooner rather than later.

1. A Lifetime of Guaranteed Protection

Believe it or not, life insurance 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:

(1) guaranteed premiums (i.e., the amount you pay for the policy will never go up),
(2) guaranteed access to the cash value (i.e., cash that is accumulated within the policy that can be accessed at any time), and
(3) guaranteed death benefit (i.e., lump-sum payment made to designated family members or other loved ones in case of death).

2. 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, life insurance is one expense that is much more affordable the earlier you get it.

That’s right, getting a policy for a newborn baby can cost you around $20 a month* – 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.

But here’s the thing: 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 Serenia Life Whole Life policy for your baby within their first year of life? You can take advantage of our Bundles of Joy Benefit, and receive $100 back as our gift to you. More savings!

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.

3. It’s Easy to Transfer Ownership When the Time Is Right

Once you’ve purchased life insurance for your baby, you are the owner of the policy, and 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.)

As the new policyowner, your 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.

Here’s the best part: If you add the Guaranteed Insurability Option to your baby’s policy, this means they can purchase additional life insurance later – without the need for a medical exam. Because a person’s current health status determines the price of their plan, your child won’t have to worry that an unexpected illness such as high-risk career, or participation in extreme sports might make life insurance less affordable down the road.

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.

Life insurance really is the gift that lasts a lifetime! Contact your advisor to learn more about child life insurance. Don’t have an advisor? Fill out this short form to get the ball rolling.

*Monthly cost for a newborn female (0-12 months) with $25,000 in coverage

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.

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