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ASK THE MONEY LADY: What can I do to create financial security for my grandchildren?

Life insurance for children can have plenty of financial benefits in the future, says The Money Lady.
Life insurance for children can have plenty of financial benefits in the future, says The Money Lady.

Dear Money Lady Readers,

Today I wanted to share some advice that I have given some of my older clients who would like to do something different for their grandchildren.

Have you ever wondered how to create a legacy? Yes, I know there are those that are ultra-rich who donate millions of dollars to hospitals and foundations and then get a research building named after them. But really, for those of us that have worked all our lives to scratch out a living and are now retired, how could we possibly think of creating a legacy to be remembered by those that we love, when we are gone? Wouldn’t it be a wonderful thing to have your grandchildren have something of real value from you that they will still have long after you have passed away?

Of course, you can give them your personal mementos, photographs or antiques – but what about real monetary protection and the ability to fund large future purchases like education or their own retirement? I’m talking about participating whole life insurance for children.

Now, before you dismiss this idea, why not consider purchasing a policy for a grandchild? The premiums are much more affordable, providing permanent insurance at children’s rates and the policy can be paid up in most cases by 10 or 20 years. Participating life policies vary by insurance provider and by province, so it is best to talk to a licensed advisor for guidance. The policies offer insurance protection with the potential to grow money tax-free within legislative limits inside the policy over time, called a CSV or “cash surrender value.” The premium, usually always level, is guaranteed for life at the time you purchase the policy.

For some plans, the participant may even be eligible to receive dividends which can be used to pay the premiums or be added to the CSV balance creating more continuous growth over time. Cash can be accessed to fund things like education, used as future collateral to borrow against, or simply left to grow over many years and used for family protection.

Bottom line, what we want when we create a legacy is to be remembered, valued, and thought of in a loving way. When your grandchild is 50 and you are long gone, wouldn’t it be nice for them to tell their advisor or banker, “I got this investment from my grandma!”

Good luck and best wishes,

Money Lady

Written by Christine Ibbotson, Author of the best-selling book, How to Retire Debt Free & Wealthy, and a new book Don’t Panic – How to Manage your Finances and Financial Anxieties During and After the Coronavirus, available at all bookstores across Canada. If you have a money question, please email on website

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