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life insurance for children

A secure and flexible way of investing in the child’s future, getting them a head start for tomorrow.

A Participating whole life insurance for children, a secure and flexible way of investing in the child’s future, giving them a head start for tomorrow. This plan provides your child lifetime protection, and emphasis on long-term growth of values, which give them a head start for any financial need in life including education, down payment on a home or starting a business.

How Child Plan Will Grow For Their Education

  • Its “Participating” Whole Life plan also doubles as an education fund.
  • Guaranteed cash value grow tax-free from the day you open it.
  • Annual tax-free dividends for life.
  • It can be given to your child, tax-free, anytime after they turn 18.
  • Its includes permanent whole life insurance that grows in value throughout your child’s life for future generations.

Sample illustration* of Children plan Cash and Insurance Values:

Based on a monthly deposit of $250 per month You may be able to use the Canada child benefit to pay the premium

Age Accumulated Cash Value Insurance Value
21 $68,319 (Education) $607,899
35 $163,143 (House) $728,670
45 $285,445 (Security) $936,584
64 $763,488 (Retirement) $1,430,775

*Sample illustration is based on a $250 monthly premium for 20 years, starting when the child is less than 1 year old. Cash and life insurance values are based on the current dividend scale of 6.25% from an Equitable Life Insurance Company. This example is strictly for illustrative purposes only, the annual dividend scale is not guaranteed, and values may differ.

Features and Benefits of the Plan:

  • You can open a participating -whole life insurance plan for your child as early as 14 days after birth.
  • Plan is permanently funded after 20 years. No further deposits will ever be required.
  • It provides your child annual dividends
  • Cash values can be used by your child for any financial need in their lifetime including education, down payment on a home, starting a business, even to provide financial security for their future family
  • Plan can be opened by parents, grandparents, aunts and uncles or legal guardians.
  • Premiums are guaranteed.

Advantages

  •  The cash value in this plan grows tax-free for life, unlike the Registered Education Savings Plan (RESP), which only grows until age 18. This makes plan ideal for long-term tax-free savings for your child.
  • It is not invested in the stock market, meaning your savings are shielded from economic fluctuations and stock market volatility. This ensures stability and protection of your child’s financial future from market risk.
  • The cash value in this plan grows through annual tax-free dividends, which are deposited every year throughout your child’s life by a life insurance company, enhancing financial security and growth potential.
  • Unlike RESP funds, which have government restrictions, cash value can be used for any educational institution worldwide, with no government approvals needed. This flexibility allows your child to choose from global education options.
  • If your child decides to pursue a different path other than a formal education such as skills trade or other future educational options, funds can be used for other financial goals, like buying a home or other significant life expenses.

Disadvantages

  • Regular premiums are required to maintain the plan, making it a financial obligation over an extended period. However, most plans are fully funded after 20 years, allowing the cash value to grow for life.
  • The cash value in a child’s life insurance policy grows gradually, making it unsuitable for immediate cash access or short-term financial needs.
  • Children typically do not have dependents or financial obligations, so the need for life insurance at a young age may not be significant.
  • The money used to pay premiums could potentially be invested elsewhere with potentially higher returns, such as education savings plans or other financial instruments.
  • Understanding the long-term benefits versus costs of a child’s life insurance policy can be challenging, requiring careful evaluation to ensure it aligns with your financial goals.
  • Have a question we didn’t answer?

    Call 1800-666-0483 to speak with our licensed insurance advisors right away or email us at info@vertexinsurance.ca to book an appointment.

  • Rashmi, a client of Vertex Insurance and Investments Inc., was asked what made her realize it was time to buy life insurance? Listen to her story!

    Gurlove

    A Single Mother of 3 grown-up children, a client of Vertex Insurance

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