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stays within prescribed limits, the cash value that builds in the policy is only subject to income tax when it’s withdrawn.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

Hello,

I came across an interesting article (see link below) recently that discussed having “the talk” with aging parents. “The talk” refers to discussions with aging parents regarding health and financial matters facing them. For the older generation, this may be a difficult discussion for them to have, but with our population aging and the first “boomers” turning 65 this year, it may a discussion best had sooner, rather than later.

The author suggests 5 pointers that may help make these types of discussion a little less difficult. I won’t go into the details of each point since they are in the article, however a summary of the points discussed are:

1. Start early – use a 40/70 rule – when kids are approximately age 40 and parents age 70.
2. Be respectful – ask more probing questions to seek parents wishes & desires.
3. Ask for their feedback – update or amend your own will and ask your parents for their advice. Parents are natural advice givers and it may get the discussion going regarding their circumstances.
4. Keep having conversations – the more open ended and probing questions asked, the better the opportunity to find solutions.
5. Take the time – learn as much as possible, listen to what they want to have happen when they no longer can express their wishes.

Some of you may have already faced similar situations in regards to the health and financial well being of aging parents and as a result have already been in such discussions, while others may not. Some of you may have also had this same discussion with your own children regarding your future circumstances. Whatever the case, you can help guide and coach them on how to manage such a discussion.

Read the full article on Morningstar here.

Please take time to review the article and take the appropriate action as you see it fit your situation.

I do hope all is well and look forward to our next meeting.

Harvey

Photo credit: <<Hey, wait dad!>> by Tambako the Jaguar on Flickr

From the Edmonton Community Foundation:

Edmonton Community Foundation presents Willpower Wills Week each October as a public service. A dedicated team of lawyers and financial planning professionals volunteer their time to present informative seminars about the importance of having a valid, up-to-date will.

The objective of Wills Week is to encourage individuals to either create or update their wills. The sessions are free of charge to the public and offer information about:

* creating and/or updating a will,
* what a will can and cannot do,
* how a will can help save taxes for both you and your estate, and
* why a properly prepared will, with the assistance and expertise of a lawyer, accountant and financial and estate planner, is so important.

Having a valid, up-to-date will ensures you determine who:

* gets what from your hard-earned assets after you are gone,
* will administer your estate, and
* will be guardians of your dependent children.

Wills Week also reminds individuals to consider charitable giving as part of their estate planning. Research tells us that 98% of Canadians make a donation in their life and planning for a legacy gift in their will ensures that their dreams and aspirations for the community can continue beyond their lifetime. Working with the Edmonton Community Foundation can help individuals and families build funds that reflect their interests for the non-profit and charitable sector.

Wills Week 2009 runs from October 5 to October 10.  A full schedule of seminar venues and times is available here: Willpower Wills Week Newsletter – The Late Edition(PDF).