There are more than three million dual-income households with children, according to Statistics Canada, but a recent poll shows only 43 per cent of parents of minor children have life insurance.Feng Yu
As a parent, a key part of planning for the future is life insurance. And yet, less than half of Canadian parents have it.
According to a 2024 poll from my company Willful and Angus Reid, only 43 per cent of Canadian parents of minor children have life insurance.
In Ontario, the government bereavement policy entitles you to two unpaid days off after the death of a spouse or child. While many employers offer more time off, they’re not obligated to.
According to Statistics Canada, there are more than three million dual-income households with children in Canada. Which means that if one partner passes away, their income is no longer helping keep that household afloat.
Would you be able to go to workdays after the loss of an immediate family member? Do you have enough vacation days to take additional time off? Can you afford to take unpaid leave?
If anything happened to me, I wouldn’t want my husband worrying about paying the bills.
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My husband and I both have life coverage under our workplace benefits plan, but it’s a nominal amount, and tied to our employment. So we both purchased term life insurance, which is coverage for a set period of time, typically 10 to 30 years. You pay a monthly premium to keep that coverage active, and if you pass away during that period, your beneficiary receives the value of the policy, tax-free.
Term life insurance is typically easier to get and more affordable. The younger and healthier you are when you purchase, the less expensive the monthly premiums. For example, a healthy 30-year-old non-smoking woman from Toronto could get between $250,000-$500,000 in 25-year coverage for $28 a month according to RateHub’s online calculator.
We also have six-figure whole life policies on our children. Instead of only covering you for a set period of time, whole life policies provide lifetime coverage. They also typically have a cash value, meaning as we pay the premiums, a portion of them accumulate and can be withdrawn in the future. It tends to be more expensive than term insurance (for that same 30-year-old woman, she’d pay at least $221 a month according to RateHub).
But in the case of getting coverage for our children, I like that it stays in effect for their lifetimes, it guarantees they can purchase additional insurance in the future, and it can be used as a savings vehicle (albeit one that will provide much more conservative returns than other investment vehicles).
Like any insurance premiums, life insurance premiums can feel like you’re flushing money down the drain, especially if you have term insurance that terminates when the policy term is up. The policies also only stay active if you pay the premiums, so you have to be willing to commit to these costs for the duration of the policy – if you lapse, so does the policy.
If you don’t fit the profile of a young, healthy, non-smoker, it can be prohibitively expensive. Finally, it’s complex – good luck understanding how your premiums are calculated.
My husband and I pay over $200 a month for our various life insurance policies. Do I look at that $200 and think about the other things it could pay for? Absolutely.
Some readers may suggest saving that money instead as a way to provide financially for my family. But for that to be meaningful, I’d need to save for years, if not decades – and it assumes that none of us will die during that time.
The whole point of life insurance is that it would provide a guaranteed cushion for my family today. I don’t know many parents of young children who have six figures in non-registered savings, or who would be able to take a meaningful amount of time off work without stressing about bills.
In the past eight years of running our online estate planning business, I’ve seen firsthand how reticent parents are to think about or talk about death. But like taxes, death is a sure thing in life, and steps like buying life insurance, writing a will, or documenting your end-of-life wishes, are gifts you give your loved ones.
As a parent who wants to leave a positive legacy for my kids, they’re worth investing in now.
Erin Bury is the co-founder and CEO of online estate planning platform Willful.co. She lives in rural Ontario with her husband and two young children.