Attention Grandparents (and parents)
Have you heard the news? There is more than one way to skin a cat. And, there is more than one way to save for your children or grandchildren. Of course, RESPs are one way to save for education costs. However, there are limits to what you can contribute. Plus, there is another interesting savings tool that provides a secondary benefit; permanent life insurance and critical illness insurance.
Some of us “older” people were fortunate to have life insurance at an early age and really can appreciate the low cost and cash values that it accumulated over the years. This is still an important concept. Setting up a life insurance and/or critical illness insurance policy on a young person may be the greatest gift that you ever give and greatest that person ever receives. Consider this a jumpstart on their financial planning.
There are options how you grow the cash value inside the life insurance policy, not in the critical illness insurance plan. In the life insurance plan, you can choose to invest in stock market or guaranteed or balanced. Either way this is a long term investment that eventually you can turn over the young person when they can afford to continue the payments.