1. It is an asset
2. It is a tax shelter
3. It guarantees their insurability
Many people are not aware that whole life insurance policies have a significant equity component to them. The cash value along with the death benefit continue to build and grow year after year (even after the policy is paid up in 10 or 20 years). You may have heard of this concept before being referred to as the Million Dollar Baby plan.
The cash value inside the policy can be used later in life for a down-payment, for travel, for tuition, to start a business, or for to fund any financial need in their 20s, 30s, and throughout life.
Life Insurance is Canada's secret tax shelter. It is comparable to an RRSP meaning that any money inside the policy grows TAX FREE, however unlike an RRSP - there is no tax liability when the policy is cashed out or leveraged against. And of course the death benefit is paid out to their estate completely tax free as well.
Most importantly, when a child is insured at a young age it means they will always have guaranteed coverage no matter what happens to their health. In most cases they will have the ability to top up their insurance and also enjoy the benefits of a growing policy even if they become uninsurable due to an illness or injury.
For $100-$200/month you can give your child, grandchild, niece, or nephew an asset that they will have for life that will grow into a quite size-able amount. This is one of the most impactful gifts you can give to a child.
Talk to us today about investing in a smart asset for your children:
778 245 2262