The majority of Canadian parents do not have enough life insurance to cover the costs of raising their children, suggests a new poll conducted for TD Insurance.

The TD survey shows that while 42% of Canadian parents believe it will cost more than $200,000 to raise a child to the age of 18, the majority of parents with life insurance do not believe they have enough insurance to cover these costs.

“The poll findings show that most parents are underinsured,” says Dave Minor, vice president, TD Insurance. “One of our goals is to help Canadians think about what it takes to maintain their family’s lifestyle in the event the unexpected happens.”

Many Canadian parents face an even greater issue than being underinsured — they have no insurance at all. The survey found that 21% of Canadian parents do not have life insurance.

“Life insurance is a hard topic for parents to talk about; no one wants to think about not being around to raise their kids,” says Minor. “Just like everything else we do to protect our children, we need to consider the worst case scenario and plan for it.”

How expensive is it to raise Canada’s kids?

Raising children is an expensive undertaking, according to parents of kids under 18. Forty-two per cent say that raising a child to the age of 18 in Canada will cost them more than $200,000, 31% believe that cost is between $100,000 and $200,000 and 27% say it is less than $100,000.

When asked about the costs to attend a Canadian university, including living expenses, the majority of parents estimate that in 15 years it will cost between $25,000 and $50,000 a year to send a child away to school.

IThe majority of parents don’t think the are putting enough money away for their children’s future. A worrying 8 out of 10 parents say they are not saving enough: 8% say they spend more money each month than they earn; 30% are living paycheque to paycheque with nothing left to save; and 41% say they are saving a little, but not enough. Only 13% are saving about 10% of their earnings each month and just 9% say they save more than 10%.

How many parents have life insurance?

Seventy-nine per cent of parents surveyed say they have life insurance, either through their workplace benefits program or through purchasing a life insurance policy. Fifty-five percent of those with life insurance do not believe the policy will leave enough money to support their children to the age of 18.

“It’s also important to consider life insurance for stay-at-home parents, not just those in the workforce,” says Minor. “If something happens to the stay-at-home parent, the cost of child care can have a big impact on maintaining a family’s lifestyle.”

Of the 21% of parents who do not have any life insurance, 56% say they feel like they probably should have it, 36% say they cannot afford it and 9% say they do not believe it is necessary.

From Dec. 10-17, 2009, Vision Critical – Angus Reid Public Opinion conducted the TD Insurance Parents and Finances survey among 1,006 Canadian parents between the ages of 25 and 45 with children under 18. The margin of error is 3.1%.