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Child Education Funds: How to Build a Flexible Child Savings Plan

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This article is brought to you by insurance for children, Canada’s leader in financial planning for children and creator of Child Plan ™ the fastest growing alternative to the RESP. Child Plan, One Plan For Life.

With the cost of post-secondary education on the rise and the world of education evolving due to technology and the pandemic, it’s more important than ever for parents to start as soon as possible to not only save for their children’s future education but to also consider what will education will be like in 18 years as early as possible. 

But many parents find it difficult to start saving due to the lack of options and information. 

In this blog post, we’ll discuss some of the options available in Canada for children’s education savings plans, and why Child Plan ™ Participating Whole Life Plan is now the fastest-growing alternative to the RESP and a more flexible option than the RESP the only education savings plans parents have known since 1998.

Child Education Fund Canada

Saving for a child’s education is getting harder and harder, and there are only a few options available. While many know the RESP most don’t know about the Canada Learning Bond. However, the CLB is only available to parents whose family income is below $48,000 a year. And while the CLB is a free grant of $2000, it’s deposited into the RESP over 15 years as long as the family income remains below $48,000 a year. 

The Registered Education Savings Plan (RESP) is a government-sponsored savings plan that allows parents to save for their child’s post-secondary education. The money in the RESP can be used to pay for tuition, room and board, textbooks, and other expenses related to post-secondary education.

The Canada Learning Bond for children under 18 is a grant from the government that provides up to $2000 over 15 years, which the government adds to an RESP. The Canada Learning Bond can be used toward any type of post-secondary education, including apprenticeships, trade schools, CEGEP, universities, and more. However it only applies to families who’s income is less than $48,000 a year. 

The Canada Learning Bond for children between 18 and 20 years old is a grant from the government that adds to an RESP to aid children from low-income families pay for their post-secondary education. There are some requirements for qualification:

  • you were born on, or after, January 1, 2004
  • you were, and still are, a resident of Canada
  • your parent, or former primary caregiver, applied for the Canada Child Benefit and had a low adjusted income for at least one year before you turned 15.

Provincial education savings incentives vary by province and typically offer a matching contribution toward an RESP account. Saskatchewan and British Columbia are the provinces offering provincial education savings incentives.

Saskatchewan Advantage Grant for Education Savings (SAGES)

The Saskatchewan Advantage Grant for Education Savings (SAGES) provides a grant of 10% on contributions made to an RESP since January 1, 2013. Eligibility is also dependent on the child being a resident of Saskatchewan when the contribution was made.

British Columbia Training and Education Savings Grant (BCTESG)

The government of British Columbia will contribute $1,200 to eligible children through the BCTESG. Eligibility is dependent on both parent and child being residents of B.C., the child being born in 2006 or later, and the child must be a named beneficiary of an RESP.

If this all sounds complicated it is. The one part of the RESP that parents are now aware of is that in order to get the CLB and CESG, it’s up to your financial institution to report the amounts you deposit and if they miss then you are now losing money.

Is there a Better and Simpler Option than RESP’s?

The Child Plan ™ Participating Whole Life Plan offers several advantages over the RESP or any other child education funds.

While these grants can be applied for with many requirements, Child Plan ™ Participating Whole Life Plan is a secure and flexible way to invest in your child’s future without any complications. Child Plan ™ is a set it and forget it plan.

Child Plan ™ is the fastest growing alternative to RESP and the only tax free investment parents and grandparents can open for a child as early as 14 days after birth.

With Child Plan ™ you don’t need any social insurance number since the plan is completely tax-free. The annual dividends are tax-free for life and can be transferred to your child, tax-free, anytime after they turn 18.

While there are numerous restrictions and rules on RESP withdrawals along with tax and penalties on RESP’s that can’t be used. A Child Plan ™ Participating Whole Life Plan can be used for any university or vocational program around the world and for any other financial need in your child’s life when they are adults beyond education. While an RESP can only be used at institutions on the very limited Designated Educational Institutional list, Child Plan has no restrictions at all.

Child’s Education

The difficulty Canadian families face in saving money for a child’s education is very real. Real wages have stagnated for the past few decades, making it more difficult than ever to save. And with the cost of post-secondary education on the rise, it’s more important than ever to start saving early.

Post-secondary education tuition rises every year, and the average cost per year for students enrolled full-time in an undergraduate program is $6,693 for the 2021/2022 academic year and that’s before all the other costs such as books, equipment, accommodation, food and other expenses bring the annual cost to more than $16,000 a year. That doesn’t include room and board, textbooks, or other expenses associated with post-secondary education.

On top of all that, the requirements for acceptance and schooling are difficult, requiring further costs like tutoring and extra training. These also require further funds to pay for tutors after school, expensive exam prep courses, and more.

That’s why it’s important for parents to start saving for their child’s education as early as possible. But with the cost of living rising faster than wages, it can be difficult to find extra money to save each month. One option available in Canada is Child Plan ™ Whole Life Insurance.

Since you can open a Child Plan ™ as early as 14 days after birth, you can finally start saving early and ensure a better, more secure future for your child. Child Plan ™ is permanently funded after 20 years, and you don’t need to make any further deposits. A lifetime of annual tax-free dividends, which can be used by your child for any financial need, including their post-secondary education. 

Child Plan ™ Whole Life Plan

What happens if your child doesn’t want to go to university or has other plans or picks a program or college not approved by the government of canada? Sure, you can open an RESP, but contribution limits along with technology changes to education may mean your plans to save in an RESP is all for nothing.

With the changing world of education along with rising cost of education these days, there is a chance that an RESP is going to cover those costs. 

Your child’s education is at risk if you don’t start planning as soon as possible for their education. Your grandparents saved to send your parents to a local university and then graduate and work for a corporation. Your parents planned for your education but didn’t expect you to graduate with $30,000 of student debt and a career in a field you didn’t study for. Your plan has to now include globalization of education thanks to the internet, the pandemic and facebook’s virtual reality world. So what’s your plan?

It takes a lot of time to save up for something so huge, too. It could take a decade or more to fully cover the post-secondary tuition costs for your child. To solve this problem, you should consider a different approach that has the flexibility to achieve your goals for your child with unlimited options for your child to use the cash value for whatever direction they take.

Child Plan ™ can be used for any financial need in your child’s lifetime, but it also doubles as an education fund. Considering it can be opened just 14 days after birth, Child Plan ™ gives you so much more time to begin, and then finish, saving for your child’s post-secondary education.

While other education savings accounts can only be used for education, Child Plan ™ can be used for education, a down payment on a home, starting a new business (if they want to be an entrepreneur), and to provide financial security for their family in the future.

The annual tax-free dividend provides unrivaled financial security and Child Plan ™ is permanently funded after 20 years. One of the biggest differences between Child Plan ™ and a child education fund is that it is a Whole Life insurance plan, so your child will be permanently covered.

To learn more about Child Plan ™, please visit insuranceforchildren.ca.

Sample illustration of Child Plan™ Cash and Insurance Values

Based on a Monthly Deposit of $250 per month

Age Accumulated Cash Value Life Insurance Value
20 $82,568 (Education) $612,728
35 $177,953 (House) $1,115,297
45 $303,299 (Security) $1,115,297
65 $834,276 (Retirement) $1,666,824

Sample illustration is based on a monthly contribution of $8.32 a day/$250 a month for twenty years, starting when the child is less than 1 years old. Cash and life insurance values are based on the current dividend interest rate of 6% from a Canadian life insurance company. This example is strictly for illustrative purposes only, the annual dividend scale is not guaranteed and values may differ.

Personalize Your Child Plan™

Request a Child Plan™ Illustration and see how much cash value your child will have for their education and for life.

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*illustrations are reflective of the annual premium amount

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