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Do RESPs Work in This Modern World?

Parenthood is the best and most challenging part of life. We want our children to have every opportunity they possibly can. We want to give them more financial flexibility than we had. This includes post-secondary education.

Education is expensive and there is a chance they may not want to go. So is an RESP the best solution in this modern world? Let’s look at a financial planning option for you and your children with flexibility and control. 

Child Millionaire Whole Life Insurance 

Your child could use the cash value to pay for:

  • University, College or Post Secondary Training
  • Starting a business 
  • Purchasing their first home
  • As a pillar of their retirement income
  • As a wealth creation tool for their children and grandchildren

You could use the cash value for:

  • Emergency fund
  • Vacation
  • Investments
  • Paying off credit cards 
  • Lending
  • Whatever YOU as the parents want

The policy owner controls how the policy cash values are used and who the beneficiary is. There is no age limit on when control of a policy can be transferred to the insured – or the insured’s parent for grandparents wanting to leave a legacy gift.

There is a lot more flexibility in using a cash value whole life insurance policy as an alternative for an RESP and it gives you and your child a lot more options in the future.

Age  Cash Value Life Insurance Value
20 $80,500 (Education) $770,000
35 $185, 000(House) $1,00,000
45 $326, 000(Passive Income Investment) $1,345,000
65 $964,000 (Retirement) $2,000,000

Sample illustration is based on a $250 monthly premium for twenty years, starting when the child is less than 1. Cash and life insurance values are based on the current dividend scale of 6.2% from a Canadian Life Insurance Company. This example is for illustration purposes only. Values are rounded to within 5% as of June 2021.

Cole Snell, Wealth Architect, Ascendant Financial


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