Baby life insurance in Canada – what you need to know

With files from James Battison.

This post was originally published on May 31, 2022, and was updated on January 14, 2026.

Having a baby is one of the most significant experiences in a person’s life. You may feel overwhelmed at first, but things do settle down. There are many things to consider as you adapt to the changes a baby brings to your life, and insurance for the baby may not be a top priority. However, life insurance for babies is something parents should consider, as there are many benefits to securing this coverage for your child at an early age. 

Here is the information you need to determine whether it’s worth getting life insurance for your baby.

Can I take out life insurance for my baby?

Yes, you can certainly take out life insurance for your baby. Thinking about life insurance for your newborn baby may feel a little dark, but it’s never too early to purchase a policy for them. 

Purchasing an insurance policy for your baby can help reduce stress should the unimaginable occur. If something were to happen to your child, a life insurance policy would cover things like funeral expenses and income lost by taking time off work, giving you and your family the space you need to grieve. 

Life insurance for your baby doesn’t need to be a major investment. Term life policies for babies can often be purchased as add-ons to your own policy, or you can acquire a standalone policy specifically for them. Term insurance is also affordable, with premiums as low as $3 per month in some cases. For a personalized quote, compare life insurance policies today to learn what it can cost you.

Premiums for whole or permanent insurance policies are often higher, but these policies offer a cash value option. We’ll discuss this in greater detail later, but in short, this cash value allows you to accrue interest on your investment and can be transferred to your child, who can borrow against it as they get older.

Is it worth getting life insurance for your baby?

There are pros and cons to buying life insurance for a baby. Let’s take a look at the benefits and limitations of purchasing these policies early in a person’s life to help you determine the best path forward for your family. 

The pros of baby life insurance: 

Guaranteed insurability: Many adults with serious health conditions are unable to purchase life insurance because of their high level of risk. Since most babies and young children are healthy, buying insurance at an early age ensures the child is covered for life, even if they develop health conditions or engage in risky hobbies.

Lower premiums: Insurance premiums are based on the level of risk a policy poses to the provider, and when a child is young and healthy, they pose far lower risk than older, less healthy adults. This means that purchasing protection early in life can lock in lower premiums than waiting until adulthood.

Cash value: Whole or permanent life insurance policies build cash value that could come in handy for your child later in life. If you choose a whole or permanent life policy, a portion of the premiums contributes to the cash value, offering the opportunity to borrow against that value in the future, along with the potential for wealth transfer or tax-advantaged growth. When the policy ownership transfers to the child upon reaching adulthood, they can withdraw funds from the cash value account or borrow against the policy. This flexibility allows them to use the funds to pay for post-secondary education, start a business, contribute to a down payment on a home, or supplement their RRSP.

Also read: How does age affect life insurance rates

The cons of baby life insurance:

Low rate of return: While many life insurance policies do build cash value, this typically happens at a low rate of return, and many would argue that there are far more efficient ways to save for the future. 

Long-term commitment: To reap the rewards of life insurance, you must be in it for the long run. That means you’ll be paying monthly premiums for a long time and must be prepared to maintain this commitment.

What is the best life insurance for babies in Canada? 

There are two main policy options when it comes to buying life insurance for your baby: term life insurance or whole/permanent life insurance.

Term life insurance is an affordable way to get your child insured, though it does offer a lower benefit payout. If you already have a life insurance policy yourself, be sure to speak to your provider, as it is sometimes possible to have a child term rider (CTR) added to your policy. It’s also recommended to see if the policy is convertible when the child becomes an adult, as this can save them money in the future and prevent them from having to undergo a medical exam to secure their own life insurance coverage.

Whole or permanent life insurance is more expensive than term life, but it offers a cash value benefit that can be a significant help for your baby later in life. Permanent life policies usually grant you the option of purchasing a participating or non-participating policy. Participating policies collect dividends, profits from the investment component of the insurance policy, while non-participating policies do not.

There are additional options available within both policies, so it’s a good idea to speak with your life insurance company to discuss the options available to you.

The bottom line

Buying life insurance for your baby is about more than just protecting yourself financially if something happens to your child. There are other financial benefits to purchasing a policy for your baby early in life, such as guaranteeing their insurability and establishing a financial foundation through permanent life insurance. While this may be something you would rather not think about, it’s worth speaking to your insurance provider to find out more. And don't forget to compare life insurance quotes to ensure you secure your child's financial protection for the best rate possible.

Also read

• Life insurance for children in Canada: an overview
• The 8 biggest life insurance myths, debunked
• Can you take out life insurance on anyone?