Insurance

Why you should consider insurance as part of your financial plan

 

Estate preservation

As an experienced investor who has developed a substantial net worth, insurance products can offset the impact of taxation on those assets at death to ensure the maximum value of your estate is passed on according to your wishes.

Tax minimization

Many insurance products offer tax advantages that are recognized by the Canada Revenue Agency. That means, the right insurance product can provide you with tax sheltering growth on investments.

Estate maximization

If you are building your assets for the purpose of passing them on to the next generation, consider making insurance part of your overall plan. Taking advantage of the tax-preferred status of some insurance products is the first step toward achieving your goals. It also provides a tax-free benefit to your beneficiaries.

Wealth creation

If you are in the early stages of wealth accumulation, insurance can be a low-cost way to create a financial safety net in the event there is a loss of an income earner.

Income enhancement

Certain insurance products can provide a supplemental stream of income for you or your family during retirement and for life. Net income may be significantly higher than other types of traditional investment vehicles.

Liquidity

When the unexpected occurs, insurance proceeds can provide much needed funds to cover financial obligations like taxes, outstanding bills and last-minute expenses. These proceeds may bypass the estate and, therefore, the entire probate process. That means these funds may not be held up in court or subject to fees that normally apply to the rest of your estate, such as executor, lawyer and accounting fees.

Protection against illness

Everyone understands the benefit of life insurance as financial protection against death, but few realize that the odds are far greater that a person will become disabled or ill. This can mean a major loss of income for your family. The greatest asset that many of us have is our ability to earn an income – so why not protect that asset? You might also ask yourself how long your investment portfolio would last if you were forced to liquidate it in order to replace that income. Insurance can provide funds to offset living expenses during times of sickness or accident.

Business planning

Many people own private businesses. In the case of a partnership, the death or illness of one partner can have a devastating effect on the survival of a business. Insurance can be used to fund a business agreement, which would allow the full value of the business to be passed to the appropriate individuals. As well, it can provide business owners with the opportunity to maximize the net value of their corporate assets when passed on to the next generation.

Charitable giving

If allocating funds to a favorite charity or fraternal organization is an important part of your financial plan, then consider insurance. There are several insurance products and strategies that allow you to provide funds to a charity or charities of your choice in the most cost- and tax-effective way possible.

Diversification

We are all familiar with two distinct pools of capital: non-registered and registered assets. But life insurance is another pool of capital – a tax-exempt one that can add another layer of diversification to your overall asset allocation strategy. Create an insurance portfolio to complement your other investments and ensure that your interests are protected and properly aligned with all your goals and values.