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No one wants to think about their child getting sick, but as parents, it’s important to have a plan in the event that they do. Without insurance, a childhood illness can take a huge financial toll on families. And trust us, in moments like these, finances are the last thing you’ll want to be thinking about. Securing insurance ahead of time means that if the worst happens, at the very least, you’ll be able to put your family first.
In today’s post, we’re breaking down everything you need to know about choosing and purchasing insurance for children in Manitoba.
There are many different types of insurance policies available to children. By reducing financial stressors and freeing up mental space, insurance policies benefit children, parents, and families alike. Here’s how children’s insurance helps:
Health can change at any time. Insuring your child while they’re young and healthy means guaranteeing their coverage well into their adult years — no matter what. And, having early life insurance coverage lets you purchase additional insurance in the future, without requiring medical evidence (which is a big deal!).
Purchasing a permanent life insurance policy for your newborn, baby, or child means setting them up for life. Life insurance policies provide death benefits that grow over time to offer a bigger and bigger payout. They also offer “cash surrender values” which means they can be accessed whenever your child needs financing in the future (for example, when they want to put a down payment on a home).
A children’s critical illness policy provides the financial freedom you need to access pricey medications and additional treatments that might not be within reach without it. It also pays for you, as your child’s parent or guardian, to take time away from work to be with and care for them, without facing a loss of income.
Child health insurance policies protect your family from many unexpected or unforeseen costs related to a child’s illness. Depending on your budget and concerns, you can choose coverage ranging from basic to advanced to help ensure that you can afford everything your child needs to get better.
Some common reasons and scenarios that lead parents to use insurance for their babies and children are:
First, as we mentioned above, it guarantees their insurability as adults. Second, while we never, ever want to think about our children leaving this world before we do, it can and does happen. And the financial burden associated with the loss of a child isn’t something any parent should have to worry about during a very challenging time.
Having life and living benefits insurance for your child not only takes on the financial burden off your family for things like medical costs and funerals, but it can also provide the beneficiaries (typically you, the parents) the time they need to grieve without worrying about their financial situation. A portion of that insurance policy payout could even let you quit your job for a period of time, without any significant financial impact.
Insurance for babies and children works just about the same as it does for adults—except that it’s even better!
While the coverage will provide for a financial payment to your family in the event the absolutely heartbreaking should happen, it ALSO guarantees your child’s insurability as they move into adulthood. This is crucial because, as you likely know, our health can change quickly.
Purchasing life and living benefits insurance for your baby or child while they’re young is truly a gift you’re giving them. It will help protect their ability to continue to be insured as an adult, despite any significant future changes in their health.
There are several options available for children’s insurance. We’ve broken them down here to help you decide which one is best for your family.
The Manitoba Health Services Plan is available at no cost to all Manitoba citizens (which includes newborns, babies, and children), as well as permanent residents and work permit holders (and their spouses/dependents) who physically live in the province for at least six months a year.
This plan offers basic, essential coverage, like:
This is a free plan provided by the government. It ensures that all Manitobans have access to, at the very least, the essential healthcare services. It does not cover anything above and beyond the basics. For things like extra or different treatments, loss of income, or other illness-related expenses to be covered, you’ll need additional, private insurance.
As a parent or guardian, you have the option of purchasing life insurance for your newborn, baby, or child. There are two options for children’s life insurance: term or permanent.
There are a couple of options when it comes to getting a term life insurance policy for your child. You can purchase their own individual term insurance policy for a relatively low monthly cost which will guarantee their coverage for the term you’ve opted for. You can also add your child to your own insurance policy for an extra monthly cost. It offers your child coverage until they reach the age of 25, or until you, as the parent/guardian reach the age of 65. In order to secure term life insurance for your child, they must be under the age of 17 when you add them to your plan.
Term insurance options are the least expensive. They have no cash value or long-term financial benefit, and the coverage it offers is generally limited, but are often the right choice based on your needs.
Cons: Limited coverage and no cash value.
Permanent life insurance, also known as whole life insurance, is an independent policy that you purchase for your child, which covers them for their entire life. This option is more costly, but it’s also more beneficial. It builds up a cash value over time which your child can draw from, and it offers a larger coverage amount.
Pros: Extensive coverage and a cash value that increases over time.
Cons: More expensive.
Critical Illness Insurance offers coverage for a variety of life-threatening illnesses that extend into adulthood. Unlike other types of insurance, when you access your Critical Illness coverage, you’ll be paid a tax-free lump sum which you can use however you need to.
Choose to cover expenses not included in your provincial or private insurance (like travel for medical purposes or additional treatments and medications) or use the money to replace the income you may lose from taking time off to care for your baby or child. The real value of critical illness insurance is that how you spend your payout is completely up to you!
We recommend Critical Illness Insurance to many of our clients because its flexibility and extensive coverage is so unique and important for families dealing with an illness. But worth noting is that because this coverage is so extensive, it can come with a high premium. That said, there’s an option to get a return-of-premium upon the expiry of the policy, which can serve as a forced savings account in the event the coverage is not used!
We receive a lot of questions about how and when to add a child to an existing insurance policy. Here’s what our Insurance Consultants have to say:
It’s important to add your child to your plan as soon as possible — preferably when they’re still a newborn. Sadly, if you wait until your child becomes sick to secure the insurance your family needs, you could run into complications or be refused.
No, you’ll have to register and add them yourself.
Shortly after your baby is born, the hospital will provide you with forms that add them to your provincial insurance plan. You’ll need to complete these forms, and then mail them in yourselves. If you have private benefits through work, you’ll also want to request a form through your employer to add your new baby to your group benefits.
If you’re purchasing life or critical illness insurance for your baby, you’ll want to secure your policy as soon as possible. Depending on the insurer and the type of plan, there are different timelines. Some require the baby to be 15 or 30 days old, whereas some let you register at birth. It’s worth deciding on the plan you want to purchase ahead of time so that you can finalize any paperwork within the appropriate timeline.
No one wants to think about the idea that their child could get sick, but it’s important to realize that childhood illness can take a massive financial toll on families. Costs like hospital stays, medication, testing, and treatments that aren’t covered by the government add up quickly.
If your child did become ill, the last thing we’d want you to have to worry about is money. Securing insurance ahead of time means that if the worst should happen, at the very least, you’ll be able to focus on what matters most and put your family first.
If you have questions about childhood insurance, get in touch with us. Our Insurance Advisor will walk you through your options, and help you secure the right coverage for your family.