One successful advisor is using the controversial product to help an unlikely demographic.
Children’s insurance can be a vital piece of an estate plan, while allowing offspring to maintain liquidity for ill-health in their later years.
“A lot of my clients will have estates to leave for their kids and mostly for their grandkids as well. So one of the things I do with the grandparents, my clients, is try to create insurance policies for the grandkids,” said Francois Langlois, a senior financial advisor with Manulife Securities. “Instead of saying you’re going to leave this when you pass on, this buffer could be for you in case you’re ill later on and you need extra medical care so no-one needs to worry about you.”
The client can choose the amount they’d like to leave and start the policy in their grandchild’s name. When the client passes the parent can take over. “It’s at a dirt cheap rate,” said Langlois. “When the child is four years old, buy him a half a million dollar policy for the future, and that becomes assets in the bank 30 years from now, and it costs nothing today when you’re four.”
While it may seem an extreme move to make, a Franklin Templeton Investments survey found 88 per cent of Canadians were worried about their retirement, with the top two financial concerns health care and lifestyle expenses.
“Even if the actuaries are putting life expectancy at 85 clients are now putting it well over 90 and 95, so for their assets they want to make sure,” Langlois said.
The survey revealed that those between the ages of 35 and 54 age had the highest levels of stress and anxiety; 38 per cent of Canadians in this demographic said they feared they would run out of money in their old age, and about 25 per cent of the people this age group were worried about health and medical issues.
“The single biggest thing I tell them when we do our growth and retirement projections is to keep in mind health care,” he said. “If you’re disabled and have to go into a centre and so forth there can be significant costs to that. We can project you can spend $100,000 for the rest of your life except in the last five or 10 years that could change significantly.”
“A lot of my clients will have estates to leave for their kids and mostly for their grandkids as well. So one of the things I do with the grandparents, my clients, is try to create insurance policies for the grandkids,” said Francois Langlois, a senior financial advisor with Manulife Securities. “Instead of saying you’re going to leave this when you pass on, this buffer could be for you in case you’re ill later on and you need extra medical care so no-one needs to worry about you.”
The client can choose the amount they’d like to leave and start the policy in their grandchild’s name. When the client passes the parent can take over. “It’s at a dirt cheap rate,” said Langlois. “When the child is four years old, buy him a half a million dollar policy for the future, and that becomes assets in the bank 30 years from now, and it costs nothing today when you’re four.”
While it may seem an extreme move to make, a Franklin Templeton Investments survey found 88 per cent of Canadians were worried about their retirement, with the top two financial concerns health care and lifestyle expenses.
“Even if the actuaries are putting life expectancy at 85 clients are now putting it well over 90 and 95, so for their assets they want to make sure,” Langlois said.
The survey revealed that those between the ages of 35 and 54 age had the highest levels of stress and anxiety; 38 per cent of Canadians in this demographic said they feared they would run out of money in their old age, and about 25 per cent of the people this age group were worried about health and medical issues.
“The single biggest thing I tell them when we do our growth and retirement projections is to keep in mind health care,” he said. “If you’re disabled and have to go into a centre and so forth there can be significant costs to that. We can project you can spend $100,000 for the rest of your life except in the last five or 10 years that could change significantly.”
