Give your child the gift of financial security as they move into adulthood

Life with children can be hectic and parents may not always have the time to make long-term plans. But the small decision of starting to save money for your child’s future can have a big impact on their life in the long run.

“We don’t talk enough about saving money for children and teenagers. Parents should decide how they want to manage their children’s money sooner than later,” says Executive Juha Roine from Nordea Life Assurance Finland.

“Fundamentally, it’s about giving your child a financial leg up when they are about to move out and start their independent life as a young adult. It’s an important topic that I’ve also thought about a lot.” 

As a father of two young daughters, Juha Roine has personal experience with this topic. He says that he’s worried about the future of his children and other young people alike. 

“I’ve tried to teach my daughters to take ownership of their finances at an early age so that they will learn the importance of saving. They have dreams that they want to achieve, and we are saving money for these dreams together,” Juha Roine explains. 

By saving just a few tens of euros each month, you can build a nice nest egg that your child can use to realise their dreams and finance their student life later on.

Saving for your child is more important than ever

According to Statistics Finland, young people today have less wealth than before. On average, it’s also more difficult for them to move out and start living independently.

We have updated our unit-linked insurance concept to support saving for children and teenagers in particular. As an encouragement to save for your child, we offer a 50% discount on the management fees of unit-linked insurance for customers under the age of 30.

“Unit-linked insurance is an effortless way to save over a longer period. Parents can choose the investment instruments for their child from our selection. The best part is that you can easily switch investments in the mobile banking app without any immediate tax implications,” Juha Roine says.

You can either choose the investment instruments from our wide range of investment funds or select one of our well-diversified investment baskets and leave the investment decisions to our experts.  

When you can switch investments within the unit-linked insurance policy without realising the profits as capital income, you don’t need to worry about taxation or your investment decisions having an impact on any social benefits your child might be receiving.

Tracking savings together teaches valuable financial skills

juha-roine-small“It’s good to track the progress of your savings together with your child in the mobile banking app. This gives you an opportunity to talk to them about saving and teach them hands-on financial skills that will benefit them for the rest of their life,” Juha Roine notes.

When your child starts their independent life, they can continue investing under the same unit-linked insurance policy. Your child will only need to pay taxes after they withdraw all or part of their savings. They also have the option of withdrawing money regularly from the unit-linked insurance policy. As an example, they could withdraw 100 euros a month if they need a bit of extra money to support their student life.

A fast track to home ownership?

The trend in home prices further highlights the importance of regular saving. 

“One of the most common goals a young person has is to be able to buy their own home. First-time home buyers are required by law to put up 5% and other home buyers 10% of the price of the home they are planning to buy,” Juha Roine says. 

If you invest 50 euros a month for 20 years in your child’s unit-linked insurance policy with an annual return of 7% and take into account the effect of compounding, you will end up with 25,520 euros, he calculates. If you continue saving for another 5 years, the savings would amount to nearly 40,000 euros. 

These calculations are, of course, hypothetical. But in any case, saving money for your child guarantees that they will have a nest egg for buying a home of their own. A key advantage of a unit-linked insurance policy is that you can pledge it as collateral for a home loan, which may make it easier for your child to buy their first home. 

A gift that lasts

Juha Roine encourages both parents and other family members to contribute to building up savings for a child’s future.

“Money may feel like a boring gift but it’s often the best choice. Children get bored of toys very quickly. Instead of buying physical gifts, you can easily gift money that goes directly into the child’s unit-linked insurance. All you need is their account number and a reference number to transfer the money to their portfolio,” Juha Roine says.

If you haven’t started saving for your children yet, now is as good a time as any to start. Small sums add up over time and will eventually help your child realise their dreams.

Issuer and further information

Our unit-linked insurance policies are issued by Nordea Life Assurance Finland Ltd, Business ID 0927072-8, for which Nordea Bank Abp acts as an agent.

Investments provide the possibility of gaining profits due to capital appreciation, but there is also a risk of a possible decrease in the capital value. Unit-linked insurance policies are not covered by the deposit guarantee scheme for bank accounts nor by the Investors’ Compensation Fund. The value of the investments may rise or fall depending on the market situation, and past performance is not a guarantee of future returns.

For more information about our endowment insurance Nordea Vision and our capital redemption contract Nordea Capital, visit the product pages where you will also find product descriptions, terms and conditions and other related documents.

How to take out a unit-linked insurance policy for your child

Book a free meeting for investment advice with us to take out a unit-linked insurance policy.

  1. If your child doesn’t yet have an account with us, please open one before meeting with us.
  2. Does your child have other guardians? As a rule, guardians manage their child’s banking together. With a power of attorney, one guardian can also manage a child’s banking alone.
  3. Book a meeting with us for investment advice. It’s completely free of charge and can be arranged either in-branch or online. At the meeting, which will take about an hour, we will discuss saving for your child and investing the savings and help you choose the options that will suit you the best. You will not commit to anything by meeting with us.

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