What Matters Most – Protecting Your Children

Anthea Personal Interest

What Matters Most to Me – Protecting My Teenage Daughter

Posted by Douglas Pinnell

The centre of my personal universe, my 16 year old daughter Rhiannan is currently contemplating her career choices. She’s quite concerned about her summer plans and ensuring she makes the best choice for how she will spend her time in order to ensure that she can build the best possible resume for her application to university next year, since she currently plans to pursue a career in medicine. Her summer will be a busy one, including volunteer work, a part time job, and hopefully some family vacation time, as it’s my 50th birthday this year, as well as my 20th wedding anniversary with my wife, Anthea.

The reality is, she is going to need insurance protection, so I need to make this a priority.

As I reflect on my daughter’s future, I realized that I have been guilty of “Cobblers Children” syndrome. While I have been busy looking after clients and the needs of our insurance brokerage, my daughter Rhiannan has no life or critical illness insurance.

The reality is, she is going to need insurance protection, so I need to make this a priority. Just as the first 16 years of her life have rushed by, it’s quite likely that before I know it, she’ll be starting her own family. With the tuition costs she will be facing, it’s unlikely she will have much, if any, savings accumulated by the time that happens.If she were to become sick or die, her young family would be left dealing with what we can expect to be significant student loans, plus any other debt they may have accumulated.

If she doesn’t start her family but suffers a critical illness (which is becoming all too frequent amongst children in Canada; last year there were over 1300 critical illness claims submitted for children in Canada), then she would need funds to cover her medical costs. Anthea and I would also need to hire someone to manage the brokerage, an additional cost, so that we could take time off to be with our daughter. As I review her needs as a healthy teenager with a bright future ahead of her, I’m giving consideration to the following:

Guaranteed Insurability Option or GIO.
This option will allow her to obtain more life insurance when she gets older without having to reapply, even if her health deteriorates or she chooses a high risk occupation.

Conversion Options.
If I purchase a term life policy for her, I will make sure it’s guaranteed convertible to permanent life insurance since she may need a cash value life insurance product in the future. By getting her an inexpensive term life policy today, she has the option to convert for a cash value policy in the future, and pay the higher premiums themselves.

Critical Illness Policy.
I also want to ensure that if Rhiannan becomes critically ill Anthea and I would be able to give her our complete attention during her recovery as well as the best medical care available. With a Critical Illness policy, if Rhiannan is diagnosed with a covered illness, we would be able to use the benefit to:

  • Take time off work to care for her and pay someone to run the brokerage
  • Make the best decisions about treatment options without having to consider the level of government or group health plan coverage
  • Cover costs such as transportation or accommodations it she needs to travel for treatment

In addition, this protection will continue to grow with Rhiannan and meet her needs through the various stages of her life. And, at some point in the future, if she hasn’t made a claim on the policy, she may decide to cancel it and get a refund of premiums.

As we continue to save for her post secondary education, Anthea and I are on a modest personal budget. Fortunately, term life insurance rates for a $250,000 term 20 policy will only cost about $20 per month. Since it is far more statistically likely that she will suffer a critical illness, the critical illness policy will be higher, at $80 per month for a $100,000 limit. At the end of the day, it’s well worth it to have peace of mind and protect our daughter’s bright future at a cost of about $3 a day.