In today’s economic climate, it has become increasingly common for Canadian parents to lend a financial hand to their adult children aged 18 to 35. Recent surveys reveal that almost half of Canadian parents provide monetary support to their adult children, underscoring a significant societal trend that warrants deeper exploration. Below, we delve into why Canadian families are walking this path and how life insurance can offer a crucial layer of financial security.
A Generous Hand in Homeownership
One of the most striking areas of parental financial support is homeownership. About 40% of young homeowners have received down payment gifts from their parents, with the average gift exceeding $70,000. Additionally, many parents are stepping in to co-sign or guarantee mortgages, easing their children's path to homeownership.
Challenges Driving Parental Support
Several factors are contributing to this trend of sustained parental support, including:
- Post-secondary education debt: The weight of student loans often lingers well into adulthood.
- Difficulty establishing credit: A crucial hurdle that can affect everything from securing loans to getting favourable interest rates.
- Soaring cost of housing: The real estate market in Canada continues to climb, making it tough for young adults to afford homes.
- Securing well-paying employment: The job market can be unpredictable and harsh, affecting financial stability.
Extending Help Beyond Mortgages
Financial assistance from parents isn't confined solely to mortgages. Many Canadian parents are also named on student, vehicle, and other general loans. It's not uncommon for them to hold credit cards jointly with their children or even invest in business ventures together.
The Financial Impact
By 2020, such financial support had amounted to a staggering $10 billion. While this generosity is laudable, it puts both the parents and their adult children at significant financial risk. Unforeseen circumstances could jeopardize the financial stability of both parties involved.
Why Life Insurance is Essential
Life insurance can serve as a safeguard, offering peace of mind and financial protection. Beyond mortgage insurance, comprehensive life insurance policies can cover debts of all kinds. Given that age and health status can affect the cost of premiums, now is an opportune time to secure life insurance to protect the long-term financial future of both parents and their adult children.
We are committed to guiding Canadians of all ages and stages of life in purchasing the life insurance they need. Start your online quote today or contact our team member, Martez, at
mlambert@easyinsure.ca. You can also call 1-800-679-2640 or text 519-563-7638 for personalized assistance.