While it’s not a very nice topic, it’s one that many parents are concerned about. As a result, I went to a professional, Lea Basawa with Investors Group, and asked her what she had to say about insuring kids and here’s what she, as a new mom, had to say.

Many parents do not want to think about anything happening to their children, whether that be death or being diagnosed with an illness. In turn, they are not willing to have the discussion about Life Insurance or Critical Illness insurance for their children.

Let me ask you this, have you started savings accounts for your children, whether it be RESP’s or other investment accounts? This is great because you are setting your children up for success. You may be doing this to fund their education, which allows them to start their career without significant amounts of debt. However, have you ever thought of using insurance as a means for these savings while also providing them protection?

Life Insurance for children has seen an increase in popularity, as we look at insurance for children, as an opportunity for them to have a “head start.” This ultimately changes the perception of insuring children from the “what if” into a positive focus of a way to contribute to help children afford their dreams.

By insuring your children you are providing them with a nest egg that combines two key elements of financial security:

  1. Life insurance protections for the rest of their lives
    • Regardless of future health problems
    • Ability to transfer the ownership of the policy to them at age 18
  2. Assets that they can access
    • Can be used to fund life events
    • Can be used to fund investment accounts

We can use life insurance to plan for the following life events:

  • Education
  • Marriage
  • Buying first home
  • Expecting a baby
  • Travel
  • Other

Some of the risks associated with not having insurance for your children are:

  • Your child develops a health condition that may not insurable
  • Your child develops a health condition that results in a rated policy (increases the price of the premium)
  • In the event of death, there is no payment to allow you more time off work to mourn
  • Investments that you made for your child’s life events face market risk

Some parents wonder why there would be a need for Critical Illness Insurance for their children. If your child became critically ill the benefit would provide you with the financial resources to make treatment and care choices that you may not be able to otherwise, focus more on your child’s recovery and less on the financial concern, and as mentioned previously taking time off work to be with your child.

Critical Illness covers 24 insured conditions including five of which are childhood-related conditions:

  1. Cerebral Palsy
  2. Congenital Heart Disease
  3. Cystic Fibrosis
  4. Muscular Dystrophy
  5. Type 1 Diabetes Mellitus

We can also elect a rider that is called return of premium that, in the event an illness doesn’t occur and no claim is made within x years all your money is returned. Therefore, if something happens, you receive the payout to allow you to find appropriate treatment and to spend time with your child.

On the contrary, which we are all hoping for, is if nothing happens and no claim is made you receive all of your money back. That being said, why wouldn’t we as parents do this to ensure we have the protection but can also utilize this as a savings strategy in the event nothing happens?

This turns a previously negative conversation into a positive one. Not only are you protecting your children, but you’re planning for their futuer.

For more information or to see how this would look for your children please contact Lea Basawa at Investors Group: p. 403-284-0494, c. 403-919-5683, e. lea.basawa@investorsgroup.com.