This is a continuing blog in the series Millennial Parents’ Guide to Financial Planning for Children.

Imagine how it would feel to help your child build a life free of debt. A life where they not only had complete freedom to choose where in the world they want to go to university but also one in which they don’t have any student loans weighing heavily on their shoulders after graduating.

Imagine they had a head start on the down payment for their first home or the funds to help them start their own business.

How would it feel if you could be the one to give it to them?

Fortunately, it’s a dream that is not so far out of reach.

In fact, it’s all possible with the right plan.

Child Plan™ is a participating whole life insurance plan. Participating whole life insurance is the most secure plan because it’s backed by Canada’s oldest and most secure life insurance companies.

Participating whole life insurance plans have been a safe and flexible investment used by Canadian parents and grandparents to save for their children’s future education and life since 1847, over 100 years before the government of Canada created RESP (Registered Educations Savings Plan).

A Flexible Plan for a Flexible Future

Participating whole life insurance plans are considered the most valuable insurance plans in Canada because the owners of the plan (parents, grandparents, children over 18) are considered shareholders, or owners of the insurance company, and as owners, they participate or share in the profits of the insurance company every year for life.

How Does Child Plan™ Participating Whole Life Insurance plan Work?

From the first day a (grand)parent opens a Child Plan™ for their (grand)child, their children will receive an annual tax-free dividend from the insurance company every year for life. With a Child Plan™ you or your children have no restrictions on how you want to use the accumulated cash values in the plan, meaning it can be contributed towards any financial need in life.

Child Plan™ cash values can be used by your child to attend any university or education program around the world, as a down payment on their first home, or even to start their own company one day if that’s their dream.

Freedom from government rules on when your child can go to school, what they can study and how the money you saved for their future can be used.

With a Child Plan™ your child is free to use the cash value for any education program around the world, without any conditions set by the government. When you open a Child Plan™ you are not required to have a SIN number for your child or to provide education receipts from a government approved education program to access the cash values as you would with an RESP.

How Much Should You Be Saving?

Our average family opens a Child Plan™ for their young child as early as two months after birth, and contribute an average of $216 per month or $2,600 per year to the plan until their child reaches age 20. However, we have families who are comfortable with $100 per month and others who are able to save $500 per month, so your plan is entirely up to your dreams and goals for your child.

With Child Plan™ there are no minimum or annual maximums on how much you can save for your child’s future education.

If you set up a plan for a child under age one, by the time your child reaches the age of 20 they will have received up to $34,000 in dividends from the insurance company and will have over $70,000 in total cash values to use for their education.

Just think of all the possibilities that kind of freedom will bring.

How Does Your Child Withdraw the Funds?

When your child has chosen their university or education program they are free to use the Child Plan™ cash values at any time without needing to provide proof of enrolment to an approved program as required by RESP providers.

Your child can simply phone the insurance company and request that year’s dividend of $4,898 be paid to them in cash, rather than re-deposited back into their Child Plan for the future. They can phone the insurance company and request to withdraw a lump sum amount annually from their Child Plan™ to cover their tuition costs each year. Your child can, only with your permission, cancel their Child Plan™ and withdraw the entire $70,000 at one time; however, we don’t recommend that since it means the plan and all its future growth is canceled and there may be tax implications.

When you’re a parent, your child is your top priority. And by investing in their future today, you’ll have peace of mind knowing they will be looked after for years to come, no matter what path they choose to take in life.

This is an ongoing series in Millennial Parents’ Guide To Financial Planning For Children. Michael Lampel is President and co-founder of insuranceforchildren.

Child Plan™ is Canada’s fastest growing alternative to RESP. It’s a secure and flexible way to invest in your child’s future.