Through working with clients over the past 20+ years, we have seen the many benefits of life insurance in action. For most people, life insurance is purchased to ease the financial impact of there is a pre-mature death by providing funds to pay off debt such as a mortgage or to replace lost income. However, purchasing life insurance for your child can be a valuable gift that you are able to pass along down the road.
Permanent life insurance, such as universal life or whole life, can build up a cash value over time and provide children with a savings vehicle that can be used in the future. For individuals who have maximized RESP contributions, a permanent policy can offer a way to build tax-advantaged savings.
Other benefits include:
Low premiums at younger ages
Lock in rates regardless of a change in health down the road
As with any financial asset it is important to assess your current situation and objectives, however, life insurance for your children or grandchildren should be considered and can be a valuable gift to give down the road.
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