Why High-Earning Parents Are Quietly Buying Life Insurance For Their Toddlers

A few years ago, a client of mine welcomed her first child, a baby boy named Liam (not his real name, but you get the idea).

She and her husband are both professionals. They’re financially secure, max out their RRSPs and TFSAs, and already have an RESP in place for Liam's education. 

But when we sat down to talk about what else they could do to set him up for the future, I asked them a question they hadn’t considered: 

“What if you could give your child a financial asset that quietly grows for the next 80 years, tax-free?” 

That got their attention.

Here’s what we did..

It wasn’t flashy.
It wasn’t trendy.

And it didn’t involve trying to pick the next hot stock or time the market.

We bought Liam a Participating Whole Life Insurance policy.

And honestly? That one simple decision could end up changing the trajectory of his life.

Let’s back up for a second 

When most people hear "life insurance," they think of protecting income or covering final expenses. 

But there’s another kind of life insurance—Participating Whole Life.

It can be designed to build wealth quietly and steadily, in the background, for decades. 

And when you buy it for a young child? 

• You lock in incredibly low premiums 

• You give the policy time to grow, tax-free 

• And you create an asset they can one day use, borrow from, or pass on 

So, why start young? 

Because time is the secret ingredient. 

Liam’s parents committed to funding his policy for just 20 years, about $183/month. That’s $43,920 in total premiums. After that, they’re done. 

By the time Liam is 72, that policy could be worth over $1.4 million. At 82? Nearly $1.85 million. 

And here’s the thing: it’s still a life insurance policy. So when Liam eventually passes away, his kids or grandkids will receive a tax-free death benefit, continuing the legacy. 

(Source: Manulife illustration. Projections not guaranteed.) 

But Karen—why not just invest that money instead? 

Good question. And the answer is: you should do both. 

RESPs, TFSAs, RRSPs—all of those should come first. But once those are maxed, and you’re looking for a stable, tax-efficient way to pass on wealth without worrying about market volatility, this becomes an incredibly smart move. 

This isn’t about replacing traditional investments. 

It’s diversifying your wealth strategy and using a tool that: 

• Grows tax-free

• Provides guaranteed value

• Can be borrowed against without triggering tax

• Creates a multi-generational legacy  

If your child or grandchild ever needs capital, whether for a business, a down payment, or support during tough times, they can tap into this policy. 

And if they never touch it? It becomes a gift of generational wealth that outlives you all. 

Final Thoughts 

This strategy isn’t for everyone. It’s best for high-income earners who’ve already built a strong financial foundation. 

But if you’re in that position and want to create a long-lasting financial legacy for your kids or grandkids, this might be one of the smartest things you can do. 

Let the market do its thing. Let your RRSPs and RESPs grow. 

But in the background let this quietly build wealth for the next 80+ years. 

👉 If you’re curious what this could look like for your family, click here for a downloadable PDF that breaks it down further. 

And if you’d rather talk it through or have questions about your specific situation, just book a time below. I’m happy to walk you through it and help you decide if it’s the right fit for you. 

👉 Click here to book a time with me

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If you want to see a quick, visual breakdown of this strategy, I actually made a post about it on Instagram a few weeks ago.

👉You can check it out here — it’s a great way to see the key points at a glance.