When your children are young they require constant care and attention. As they grow into strong, independent adults, you’ll know all the sacrifices were worth it. Giving your child a good start in life paves the way to a future of successes.

• Have you considered how you can help shape your child’s financial future?
• Did you know life insurance pays an important role in their future financial security?

Tax-advantaged growth of policy values

Besides providing surviving family members with a death benefit, some types of life insurance can accumulate cash value on a tax-advantaged basis. If the accumulation stays within prescribed limits, the cash value that builds in the policy is only subject to income tax when it’s withdrawn. Consider the financial benefits to your children’s start into adulthood if they could access their accumulated cash value to help pay for their education, put down a down payment on their first car or home, or travel the world!

Unlike traditional investments, a permanent life insurance policy is exempt from annual income taxes on the growth of policy values, provided certain conditions are met. As a result, with permanent life insurance more of your cash value goes towards your child’s future instead of income taxes.

Protecting your child’s insurability

Life insurance is best purchased when your child is young and healthy. Some policies guarantee insurability, allowing your child to purchase more life insurance as an adult, regardless of disability, illness, occupation, residency, or foreign travel.

Without proper life insurance planning, a child who develops serious health problems or is diagnosed with a major illness may not be insurable as an adult. In addition, foreign travel to world hot spots may significantly increase your child’s life insurance premiums or even lead to being denied coverage as an adult. If this occurs and your child is not adequately insured, his or her loved ones may face a large financial burden in the event of premature death.

Covering unforeseen expenses

The tragic loss of a child is unpleasant to think about and even worse to endure. The last thing you’d want is to worry about money. Life insurance not only covers immediate expenses, such as funeral costs, it can also be used for grief counselling, taking time off work, moving costs, or whatever is needed in your personal situation. While children should never die before their parents, are you financially prepared if the worst was to happen?

Reasonable doubts

Some people believe life insurance for children is unnecessary, because they don’t contribute to a family’s income. However, when you factor in the benefits life insurance can provide through tax-advantaged growth, protecting your child’s insurability and paying for unforeseen costs, they outweigh the notion that life insurance is only for individuals with an income.

Find out how life insurance fits into your child’s future.

Photo credit: “like a record…” by shoothead, on Flickr
“Untitled” by Noukka Signe, on Flickr

We’re back! I hope everyone had a great summer with a little bit of sun and fun. Of course, all good things must come to an end, and with children heading back to school (during the warmest week of the entire summer no less! Cruel, cruel nature.) I’ve been thinking about some of the things they end up learning outside the classroom. Many of the lessons that we learn in school don’t become relevant until long after graduation;  unfortunately some of these lessons can be very painful, and learning them the hard way can have a huge negative impact for many years into the future.

Before I attended my first class at the University of Alberta, I had a “free” travel mug (a gift for signing up for a new Visa), sports bag (Mastercard), and t-shirt (American Express). They handed these cards out like candy.

“You should start building a credit history,” was a popular line from the smiling, attractive sales reps. Not that I needed to be sold; I was an adult now! I could handle the responsibility! I had a weekend job, and not too many bills. What’s the harm?

Ever hear the analogy of giving a child a loaded gun?

“Big Cajun Man” wrote on his website “Canadian Personal Finance Blog” about having similar experiences:

Students: Banks’ New Markets

For those of you who are unaware, Banks try to capitalize on attracting new (and young) customers on campus these days (most Universities have entire bank branches on campus).  They are quite aggresive in their marketing to these new potential clients, enticing them with iPods and other “perks” to open new accounts.

…

Banks are always on the look out to get NEW clients that want to pay Bank Fees and put their savings in their banks for the bank to use as well.  When you send your child/student off to school keep this in mind and maybe talk to your kids about banking and the in’s and out’s of the “Banking Game”.

Click here to read the rest of this article.

I’m a firm believer that the real education that takes place at college/university happens outside the classroom. Up to the point that they are sent off to school (or even well past that), most children have been totally dependent on their parents for housing, groceries, phone/tv/internet and other utilities, vehicle costs, maybe even allowance income. Even if they have been fortunate enough to have someone build an RESP for them, it’s still more money coming from “nowhere” that takes care of things for them. Some may have had part time jobs, learned a little bit about the value of money, but until you’re buying your own toothpaste…

“Big Cajun Man” says it well:

Teach Your Kids To Be Frugal At Back To School Time

…

The point of University is to learn, and one of the things that kids need to learn is how to cultivate and develop their own Inner Frugality. If you buy your kids $3000 worth of furniture for their apartment, they are effectively living YOUR lifestyle (i.e. it’s just like home), whereas maybe they should be learning to live a frugal lifestyle instead? At University I had a treasure trove of old, used and scrounged furniture, and I loved it. No, my living room was not something out of “Better Homes” but it was mine (mostly my parents gave me an old dresser), and that is (I think) one of those things a kid in post secondary education (or one that has just moved out) needs, that sense of self.

Teach your kids to live within their own means, when they spread their wings and leave the nest, and that may be the most important thing they learn.

Click here to read the rest of the article.

To borrow another well-known phrase: “If you don’t talk to your kids about money… someone else will.”

I have found a very good article for parents who have young children.  One concern most parents have is the development of social skills while making sure your child is safe in communicating with others.

Children look up to their parents. You are their very first teachers, so be conscious of how you handle social situations. The more you guide and model positive social interactions, the quicker your children will learn what is acceptable and what’s not.

…

As a parent, there always seems to be too many things to worry about; are your kids eating enough? Exercising? Getting good grades? And most importantly, are they happy?

More and more parents are also concerned about their children’s social-emotional well-being. Ease your anxiety and help ensure your children’s social success with the tried and true strategies that follow.

Read the rest here.