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How Life Insurance can be Used as a Living Beneft

  • Estate Bond
    • What is it?
      • A tool which increases the value of funds earmarked for your heirs.
    • How does it work?
      • Funds have been designated to be passed onto your heirs.
      • These funds are deposited into an insurance contract.
      • Funds grow on a tax-sheltered basis in addition to the insurance death benefit.
      • Upon death, the proceeds are paid out to your designated beneficiary tax free.
      • The proceeds, as a result of tax-sheltering are in excess of the amount they would have grown to had they been invested outside the insurance policy.
  • Joint Last to Die
    • What is it?
      • A tool to maximize the value of your estate asset.
    • How does it work?
      • An insurance amount is purchased equal to your tax liability.
      • Upon second death, insurance pays tax liability.
      • Heirs can maintain the assets and are not forced to liquidate the assets to pay taxes (ie. cottage, stocks).
      • Insurance cost is lower on two lives vs. one life.
  • Charitable Gifting Life Insurance
    • What is it?
      • An opportunity to provide a donation to a chosen charity and provide tax relief for you either today, or in the future.
    • How does it work?
      • An insurance contract is purchased equal to your chosen donation amount.
      • Depending on structure, tax credits can be made either annually on the insurance premium or at death on the insurance death benefit.
      • Tax credits are used to reduce taxes paid.
      • Upon death of the insured, insurance proceeds are paid to the charity named as the beneficiary.
  • Insured Retirement Program
    • What is it?
      • A tax-effective way to provide a future income stream.
    • How does it work?
      • Deposits are made to an insurance contract.
      • Funds grow on a tax-sheltered basis.
      • Contract is assigned to the bank in exchange for advances.
      • Loan advances provide tax-free income.
      • Upon death, the loan is paid with tax-free proceeds.
      • Net insurance proceeds are then paid to named beneficiary.
  • Pension Maximizer
    • What is it?
      • A tool to maximize the value of your pension for both you and your spouse.
    • How does it work?
      • A 100% pension option is chosen our of your pension plan.
      • An insurance contract is purchased on the pensioner.
      • Pension income is maximized.
      • Insurance proceeds provide larger survivor pension.
      • Heirs receive the residual of the proceeds after death of second spouse, and therefore do not get excluded from pension proceeds.
  • RRIF Insurance
    • What is it?
      • A tool to maximize the value of your registered assets left in your estate.
    • How does it work?
      • Upon death of last spouse, Revenue Canada is entitled to tax on your registered assets.
      • An insurance policy is purchased for an amount equal to your tax liability.
      • Insurance is on a Joint Last to Die basis for cost effectiveness.
      • Upon second death, the insurance pays out your tax liability.
      • Because the insurance costs less than your liability, more assets are left in your estate for your heirs.