Insurance videos

Mark and Luc are co-owners of a successful business. From the start of their partnership, they made it a priority to plan ahead for any potential unknowns that may arise in their business and with their families. It was imperative for them to ensure the ownership of the business remained with the original partners should something happen to one of them.

Both Marc and Luc also knew that their spouses had no interest in joining the company – today or in the future. Should one of them die, the responsibilities their spouses would incur upon inheriting their portion of the business would create an unnecessary burden for both the surviving spouse and remaining business partner.

Together they entered into a buy-sell agreement to protect themselves and their stake in the business should the unexpected occur. The agreement stipulates that if either Marc or Luc were to suddenly pass away, the shares of one would automatically be sold to the other.

Following the recommendation of their advisor, they met with an Estate Planning Specialist, to discuss their financial needs. The specialist recommended an insurance solution that would help finance the buy-sell agreement. This would provide immediate liquidity to buy out the shares of the deceased, and offer protection for both of their families.

When funding their buy-sell agreement with life insurance, Marc and Luc were able to predetermine that:

• The funds to purchase the deceased partner’s shares would come from the proceeds of a life insurance contract purchased by the corporation insuring both of their lives and naming the company as the policy’s beneficiary.
• In this example, should either Marc or Luc die, the life insurance proceeds would provide the remaining owner with sufficient funds to purchase the deceased’s shares and would realize their desire to keep the business running in the hands of one of the original owners.

Speak to your RBC Dominion Securities Advisor about meeting with an Estate Planning Specialist or Financial security advisor and discover how insurance solutions may help to finance a buy-sell agreement.

Eric and Isabelle dreamed of a fulfilling future, and helping their two children pursue higher education. As part of their plan to achieve this dream, they explored the financial security that a life insurance policy can offer with their RBC Advisor and their Estate Planning Specialist.

Both Eric and Isabelle valued the peace of mind that protection gave their family. They decided to purchase life insurance, and name each other as the beneficiary of their respective policies. Isabelle later fell ill and passed away unexpectedly.

During this challenging time, the death benefit of her life insurance policy helped Eric with several of the family's financial needs. It assisted with the family's liabilities, such as paying off the mortgage on their home, and providing for the loss of Isabelle's salary for several years.

Most of all, the benefit also helped fulfill Isabelle's dream of helping her children achieve a higher education. Nothing can replace Isabelle in the hearts of Eric and their kids. But her family was comforted knowing that she left a considerable legacy in the form of financial security, and funding of her children's education.

Now that Eric is the sole provider for his children, his advisor recommended a full wealth management review. This review led Eric to increase his existing life insurance coverage, as well as discuss the benefits provided by illness and disability insurance.

Eric found great relief in knowing that his loved ones will continue to be protected, should anything happen to him. Contact your RBC Life-licensed Advisor today to help achieve your unique goals, and to discuss how you can best protect your loved ones.

Gary and Maria have had a long and successful career, and worked hard along the way to support their loved ones. Now that they are approaching retirement, they are starting to think about their legacy. Gary and Maria are already covered with a life insurance plan and are looking for additional ways to transfer the family’s excess wealth as efficiently as possible.

They talked to their Advisor and Estate Planning Specialist at RBC Wealth Management Financial Services Inc. about how they can support the next generation of their family. They were told about the Intergenerational Wealth Transfer Strategy, a solution that can help provide financial security and flexibility for their family.

Speak with an RBC life-licensed advisor or an Estate Planning Specialist today to learn more about the Intergenerational Wealth Transfer Strategy.

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As a successful business owner, we know you've worked hard to create wealth for you and your family. Life insurance can protect that wealth from depletion from taxes, and other life contingencies, and can help with the flow of intergenerational wealth. We see many successful business owners re-allocating a portion of their corporate capital into permanent life insurance, which provides numerous tax and estate planning benefits.

With life insurance, the deposits grow, and the death benefits are paid out tax free. There is liquidity created at death to fund taxes. Where you have business partners, it can be a cost effective solution to fund a buy-sell agreement. And it can be used to equalize gifts to children not involved in the family business.

Where life insurance is owned through a corporation, it allows most, if not all, of the death benefit to be paid out of the corporation's capital dividend account as a tax free dividend.

And finally, it can be considered as an alternative asset class with attractive returns and low volatility. Speak to your RBC Wealth Management Advisor to discuss how life insurance fits into your overall wealth plan.

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When you think about insurance, what do you think about? Coverage for your home? Coverage when you travel? Automobile coverage? Life insurance coverage? Perhaps disability coverage. If you're like most people, you probably think of insurance as something that protects you in case something bad happens. And it does. But did you know that insurance also gives you a way to invest on a tax free basis?

According to the Federal Income Tax Act, assets accumulate within a tax exempt life insurance contract free of annual accrual taxation. That means you don't pay taxes on the investment growth of assets held within that policy. In fact, you can think of an insurance as another asset class, like equities, fixed income, or cash that you can use to diversify your portfolio and reduce risk.

Tax-exempt life insurance works like this: It's a regular life insurance policy that provides a death benefit, just like any other life insurance policy. You apply, and qualify for the policy based on health, lifestyle, and family health history factors.

But the insurance premiums you pay are more than the price of admission to a very tax smart investment vehicle. In fact, tax exempt life insurance offers tax advantages very similar to an RRSP, as well as much flexibility.

For example, you can deposit additional assets into the policy to grow tax sheltered, up to a certain maximum, depending on your age, gender, health, and amount of insurance coverage you want or need.

You can choose to either have the insurance company manage these assets for you. Or you can choose from a range of investments like mutual funds or guaranteed investments to eliminate market volatility.

Either way, your investment earnings accumulate on a tax deferred basis within the life insurance policy, just like an RRSP. Plus, when the proceeds of the insurance policy, including the investment growth, go to your chosen destination, they do so on a tax free basis. So you can provide your family, your community, your place of worship, or your favorite charitable organization with a tax free benefit.

So the next time you think about insurance, remember, it doesn't just protect you in case something bad happens. It can also make something good happen, like reducing your taxes and leaving a bigger legacy for your family. For more information about tax exempt life insurance, please contact your life licensed RBC Dominion Securities investment Advisor.

This video and its content is provided by RBC Wealth Management for the general guidance and benefit of RBC Dominion Securities Inc. (“RBC DS”) and RBC Phillips, Hager & North Investment Counsel Inc. (“PH&N IC”), and is intended for information purposes only. The term “RBC Wealth Management Advisor” means an RBC DS Investment advisor or a PH&N investment counsellor and does not include advisors with Royal Trust or Private Banking.

The comments contained in this video are general in nature, and do not constitute legal, investment, trust, estate, accounting or tax advice. Insurance products are offered through RBC Wealth Management Financial Services Inc. (“RBC WMFS”), a subsidiary of RBC DS.* RBC WMFS is licensed as a financial services firm in the province of Quebec. RBC DS, RBC WMFS and Royal Bank of Canada are separate corporate entities which are affiliated. *Member – Canadian Investor Protection Fund. RBC Dominion Securities Inc. and RBC WMFS are member companies of RBC Wealth Management, a business segment of Royal Bank of Canada. Please visit www.rbc.com/legal/ for further information on the entities that are member companies of RBC Wealth Management. Trademark(s) of Royal Bank of Canada. Used under license. © 2021 Royal Bank of Canada. All rights reserved.

Maureen and Fred own life insurance policies. They're worried about how events like a pandemic may impact their life insurance policies' death benefit.

Maureen and Fred weren't sure if the policies would continue to protect their family in the event of a premature death. So, they contacted an RBC Dominion Securities life-licensed advisor.

Maureen and Fred's advisor reassured them that the policies provide their beneficiaries with a contractually guaranteed tax-free death benefit, regardless of external factors like a pandemic, or changes in the market.

Now, Maureen and Fred can enjoy peace of mind, knowing their family is protected.

Find out how life insurance fits your family's plan. Contact your RBC Dominion Securities life-licensed advisor today.

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