Why I chose to insure my baby
When I first started in the insurance industry I shared the same view as my mentor: life insurance isn’t necessary on a child as there isn’t the same financial loss as when an adult breadwinner passes away. While this is true in one sense, I now disagree - even if you don’t rely on someone for an income, the impact of their premature death can have significant financial consequences. But I don't have insurance for that reason (that as a parent, you can't even think about) - I'm thinking about the future.
When my son was born, I registered him online: applying for his SIN, birth certificate and MSP (basic health insurance) as well as registering him for the work health and dental benefits plan. When he was 30 days old I completed the applications for his Life Insurance and Critical Illness (CI) Insurance. There are different reasons why parents choose to insure their child and both made sense to me:
1. If my child got sick or passed away before me, there will very likely be a financial impact
2. By getting coverage now, no matter what my child’s health in the future, he will at least have some basic life and CI insurance.
We’ve all read the stories about families who have kids at BC Children’s Hospital and the subsequent fundraisers, charity events and donation collections. Unfortunately, in many cases, the money that comes in from generous family, friends and strangers doesn’t cover the full cost of parents taking time off work, traveling to/from the mainland, staying in a hotel or renting an apartment, childcare for other children, modifying their home after the hospital stay, comfort items (like a special chair, toys, a trip) for the child, etc. If anything ever happened to my son (and no one likes thinking about this), I would do whatever necessary to help him get better. And going to work would be at the bottom of the priority list. Receiving cash after a Critical Illness diagnosis could be a gamechanger. In the terribly unlikely event of me outliving my son, again, taking the time I need away from an office is important. So is donating money to a charity on his behalf or setting up a scholarship, as examples.
The nicer way to think about children’s insurance is the ability to have it in place for the future.
Children's insurance policies can be fully paid for in 20 years, leaving them health and life insurance that NO ONE PAYS FOR for the rest of their life. Do I think there's a pretty good chance that over the next 90 years or so, my son may suffer a critical illness? Unfortunately, statistics aren't in his favour. Do I think there's a chance he will die one day? Sadly, yes, it's still 100% (unless someone figures out how to make us immortal).
No parent wants to think about this but those that plan for their children's future are giving them a great foundation.