Education Savings Plan with BOY
You’ve heard about the traditional way of saving for your child’s education, the RESP. However, there is another traditional way that the wealthy and those with astute financial advisors know of, and that is participating whole life.
Why do only these people tend to know about it?
Because it takes more than an average agent or sales person to set it up. It needs a life insurance broker that has been specifically trained in setting up these policies to their maximum effectiveness and based on sound financial planning principals for your family, as a whole and cognisant of your lifestyle values.
The concept most often used with these types of policies is called Bank on Yourself (BOY) developed by Pamela Yellen in the United States. Stephen Devlin is Canada’s expert in the BOY concept, along with his team of Authorized Advisors at MacDev Financial Group.
So what is Bank on Yourself and how does it relate to your child’s education?
Bank on Yourself is a concept that uses participating life insurance to shelter your money in an asset stronger and more secure than real estate. In a nut shell, it is as it sounds. It is a life insurance policy but it isn’t one you rent, such as a term policy most people are accustomed to. It is one you, and eventually your child, own. It is an asset because it has a money value just like owning a home does. A bank valued asset that your child can take with them beyond their school years. It is for life! Unlike real estate that could plummet in value, BOY policies don’t. Their gains, paid out in dividends, are protected each and every year because these policies are not tied to the stock market.
Now that you know the basics, how does your child use it for school?
A BOY policy has what is called a Cash Surrendered Value; it is essentially a savings account on steroids. It gains annual dividends. Those gains are protected each and every year. So similar to compounding interest, they accumulate. As more dividends are put back into the CSV savings, it grows tax free.
By the time your child is seeking secondary education, there will be tidy sum money your child can draw against. It will be paid back on terms you and your child agree on. And while it is being used for your child’s education, that money will still be growing tax free like it hasn’t been touched. But, it gets better! You can access funds quickly and it isn’t just for education, it is for anything your child would save for; a car, a house, a vacation, retirement. You will be giving your child the ultimate gift; a wealth plan to carry your child through to retirement and life insurance to protect their loved ones, a legacy for your family. Besides love, is there a better gift you can give your child?
Your BOY Authorized Advisor at MacDev Financial would be pleased to show you in greater detail how this all works, the many benefits not even talked about yet, and how it can build wealth for your family to use for education or other life needs, including retirement.