Digitally dispelling the mysteries of children's life insurance

By and large, comparing and purchasing life insurance products has traditionally been a painful and rigorous exercise for Canadians, who nonetheless had to endure the process to get much-needed protection for their families. With the arrival of the global pandemic, the need for coverage has increased along with the difficulty of obtaining it through in-person purchases – and online comparison platforms like PolicyAdvisor are coming in to bridge the gap.

“Ever since we launched about 18 months ago, our focus has been on offering convenience, choice and transparency to the Canadian life insurance consumer,” said Jiten Puri, founder and CEO of PolicyAdvisor. “We are one of the most prominent digital platforms – in many ways, the only platform – for consumers to be educated and engage with insurance products.”

Due to the platform’s scale and presence, it accommodates hundreds of online interactions daily with consumers across the country, empowering them to compare life insurance products from a menu of 20 different providers. The company, in turn, has gotten a sense of the growing demand for life insurance; in a recent PolicyAdvisor survey ranking different insurance products based on how much Canadians value them, it came in second only to health insurance, with nearly two-thirds saying it’s more important to own now than before the pandemic hit.

“We've seen an increasing number of parents using our platform, just given the COVID environment,” Puri said. “There has been a significantly increased interest in life insurance products from consumers, including parents who would like to get coverage for their young children.”

With that in mind, the platform has expanded its functionalities to allow comparisons of children’s life insurance policies. Hosting products from prominent carriers – including BMO, Empire Life, Equitable Life, Industrial Alliance, Manulife, Desjardins, and Canada Life – the site enables consumers to get instant quotes, filter products based on features like payment terms and use of dividend strategies, and potentially purchase coverage in a fully online environment.

While life insurance is an inherently complex product, Puri said children’s life insurance can be harder to understand as it lends itself to a variety of applications as well as comparisons with financial products other than insurance.

“We wanted to equip the Canadian consumer with an understanding of the thesis behind children's insurance, why should they be purchasing it, and to be able to get transparency on the options available to them,” he said.

One unique beneficial feature of juvenile life insurance, he said, is that it can provide the certainty of lifelong coverage. A parent who gets that early protection for their child gets favourable coverage, as they tend to be in the prime of their health. They also have the opportunity to lock in low premiums and effectively guarantee insurability for the rest of the child’s life.

“Where it becomes even more interesting is that children's whole life insurance also can act as a savings or investment vehicle,” Puri said. Policyowners can benefit from tax-advantaged growth within the policy, where the cash value accumulates and can be accessed or borrowed against in the future for a variety of different uses, including buying a vehicle, making a down payment on a mortgage, and starting a business. That’s in contrast to RESPs, where funds earned over time can only be used to fund education.

Another advantage of children’s life insurance over RESPs, Puri said, is that the whole-life investment component is placed in a well-diversified portfolio of asset classes, which means the expected returns are generally safer as they have lower volatility and are relatively uncorrelated to the equity markets. Beyond that, it can provide an emotive function for senior Canadians who want to leave behind a gift for their young grandchild in the form of a life insurance policy.

Where PolicyAdvisor shines, according to Puri, is how it helps users make more informed choices. Insurance consumers who want to do some of the research independently are able to see the comparisons themselves, as well as use the platform’s tools to understand the accretive impact over time on policy cash values and coverage amounts.

“When they are considering purchasing any of these policies or if they wanted to get more specific or customized advice, our advisors provide them that curated guidance,” he said. “Our advisors pride themselves in offering independent, unbiased consultative guidance to the consumers, after which we help them in being able to purchase insurance through our platform fully online.”

Aside from being fully licensed advisors, Puri said the advisors working on the platform are non-commissioned. Being salaried advisors, they’re not open to the same conflicts of interest that may compromise licensed agents who are paid based on recommendations of certain products. Because of that, they’re better able to provide independent, objective advice and honestly direct consumers to the best policies for their needs.

“We make the effort to educate the consumer about the use cases of children's life insurance within their insurance portfolios,” he said. “Of course, we also guide them with regard to affordability, whether it is the right product for them, and whether it fits within their budgetary norms. As long as some of that consideration has been discussed and understood by the consumers, we believe children's life insurance has a place in most parents’ insurance portfolios today.”