Why should I get life insurance for my children?
The idea of purchasing a life insurance policy on children is an idea that many parents do not consider. However, there are several reasons why parents or even grandparents may want to place an insurance policy on their child/grandchild.
Insurance coverage for your children is as easy as these 3 steps!
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Get covered
Do you want to provide a legacy gift or wealth transfer for your children?
Children’s policies are often quite popular as a way for grand-parents to leave a gift for their grand-children. This allows grand-parents to transfer their wealth in a tax-efficient manner and provides the grand-children with an opportunity to use funds in the future for such things as post-secondary education or buying a home. Note, ownership of policy remains with parent or grandparent of policy, until such time they decide to transfer ownership (if they so desire). There is one caveat to purchasing a child life insurance policy, namely if the primary purpose is to save for a child’s education.
Given in Canada, the government encourages parents to save for their children’s education by providing a 20% education grant through an RESP (Registered Education Savings Plan), for most parents it would likely make sense to maximize the “free” money the government provides first. The government will match 20% on the first $2500/annually up to a maximum of $7200 in grants. We would be happy to provide further analysis of your family’s specific circumstances. Contact Protect Your Wealth today to learn more! We proudly service clients in Alberta, B.C., Manitoba, and Ontario.
