As parents, students and educators, ensuring that our children have the resources to pursue their dreams is a top financial priority. Here are three ways parents can give their kids a head start in life:
1. Save for their education
An RESP is one of the best ways to invest in your child’s future. Registered with the Government of Canada, this plan allows you to earn tax-free income while saving for your child’s future education. The government will also add grants to your contributions that guarantee a minimum return of 20%!
Anyone can open an RESP account for a child—parents, grandparents, other relatives or friends! When your child is ready to pursue their post-secondary education, the earnings from government grants and investment income will be available to withdraw from this account. In addition to paying for tuition, the RESP can be used to cover lodging, transportation, or school supplies.
2. Ensure insurability
The best time to get insurance is when we're young and in good health to benefit from the most affordable rates available. Taking out a life or health insurance policy for your children while they’re young is a smart way to protect their future insurability. When they reach the age of majority, you can transfer the insurance contract to them so that they can maintain their coverage at affordable rates. Some products even reimburse the premiums paid, which can help fund their future. Either way, he or she will benefit from a strong financial foundation for life.
3. Be covered in case of a critical illness
In all likelihood, your children will grow up healthy. In the event that they are diagnosed with a serious illness, critical illness insurance can allow you to take time off work to be with your child and to seek out the best care available. It provides a tax-free lump-sum payment that you, as the policyholder, can use as you wish.
Talk to your financial security advisor about the different options to protect your family’s future.
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