👶 Starting a Family
A new child changes everything — including your financial responsibilities. Here is what to understand about life insurance as a new or expecting parent.
Why does life insurance matter when you have a child?
Before having children, most people's financial obligations are primarily their own. A new child creates a dependant — someone who relies on your income, your presence, and your planning for their wellbeing. If you were to die unexpectedly, your child would need financial support for potentially 18 or more years.
Life insurance is one tool that can provide that support. A death benefit paid to a surviving partner or a trust for the child can cover:
- Ongoing household expenses and lost income
- Mortgage or rent payments
- Childcare costs (which can be significant for a sole surviving parent)
- Education savings
- Final expenses and estate costs
Financial obligations to consider
- Lost income — How many years would your partner and child need income replacement?
- Childcare — A surviving parent who works full-time may need paid childcare. This is often underestimated.
- Mortgage — Can the surviving parent maintain housing payments alone?
- Education — Many parents include post-secondary education in their planning.
- Emergency reserves — Unexpected health, legal, or household costs.
Terminology to understand
- Beneficiary
- The person who receives the death benefit. For new parents, this is typically the surviving partner — or a trust set up for a minor child.
- Term Life Insurance
- Coverage for a set period (e.g. 20 years). Often used by young parents to cover the years their child is a dependant.
- Death Benefit
- The tax-free payout your beneficiary receives. In Canada, most life insurance death benefits are paid free of income tax.
- Premium
- Your monthly or annual cost. Premiums are typically lower when you are young and healthy — often a reason new parents act early.
Questions to ask an insurance advisor
- How much coverage do we need to replace both our incomes?
- Should we each have separate policies, or a joint policy?
- Should we name our partner as beneficiary, or set up a trust for our child?
- Does our employer provide any group life insurance, and is it enough?
- What happens to the policy if our family situation changes?
- Should we consider permanent coverage or term coverage for this stage of life?
Registry resources
Appropriate next step
Use the Needs Calculator to build a rough estimate, then speak with a licensed insurance advisor who can assess your specific situation and help you choose the right type, amount, and structure of coverage.
The Registry provides education and directory information. It does not provide insurance advice or sell insurance.