We’ve all seen the advertising for RESPs – how the government is offering a financial incentive for putting aside money for your child’s education. It’s not always that simple, since it is a government program, there could be challenges pulling the money out for your future student. Plus, your child may choose not to pursue higher education or not be at an eligible institution. Although a great program to take advantage of, RESP’s are not perfect. There is an insurance option that will work wonderfully as an alternative: A Whole Life insurance policy for a child. The nature of a participating whole life policy is that it is an investment that should pay dividends every year. The funds staying within the policy will grow tax free. When your child reaches an age where they wish to go to University or College, the funds that have grown in the policy (known as the cash value) can be withdrawn and used to pay education expenses. Alternatively, the funds can be used to buy their first car. Or for a down payment on their first home. Or anything they choose. It’s an effective use of an insurance product for a living benefit that isn’t based upon having something negative take place. Purchasing Whole Life policies for children can be done by not only parents, but as a gift from grandparents, aunts or uncles!
