With the holidays upon us, everyone is looking for the perfect gift, especially for their children or grandchildren. US News and World Report published an article on its website listing six financial gifts you can give a child that will make future holidays even brighter than this one. Here’s a quick summary of what author Emily Brandon suggested:
A 529 plan: This is a college savings plan – either a prepaid tuition plan for a specific college or an education investment account.
A Roth IRA: If your child is working and earning an income, you can put “matching” money into a Roth IRA, up to $5,000. The money grows tax-free because your contributions were made with after-tax dollars.
A savings bond: This is great for teaching the power of compound interest and investing for the long-term.
Cash: Cash is always great! (But remember, once it is spent, it’s gone – with no lasting memory.)
Financial advice: Use a non-family financial professional. This is especially good for adult children who are trying to get their feet on the ground.
A piggy bank: A bank is an excellent first experience for putting away money instead of spending it.
What the article didn’t mention was the gift of life insurance. A policy that parents or grandparents give can become a lasting gift for the child’s financial future. It can provide cash for college, a new home, a new business or for changing family and financial need, money for emergencies when it is needed most, and protection of the child’s insurability.
Sure, there may be no need for insurance protection today, but there will be in the future. A small policy with a guaranteed policy purchase option for additional insurance in the future may be a gift that can never be duplicated if the child develops health problems.
Think about it. Would you like your grandchild to remember you forever? A gift of life insurance can do this.