Personal Insurance Products

Now certain life insurance products are offering tailored solutions to financial and estate planning strategies that, in addition to the insurance coverage, offer wealth-growing opportunities that have very attractive tax advantages.

Most investors are aware of the more popular estate planning strategies available today and the tax implications associated with each.

First, there is the government pension you will draw upon retirement age, together with any registered pension plan from your employer. You can receive the funds indefinitely and pay tax set at your marginal rates. The benefits continue only as long as you live so there are no estate inheritance or tax issues when you die.

Second, your RRSP. The contributions are tax deductible and the growth of the invested funds are sheltered from capital gains and other taxes. There are well-known drawbacks to your RRSP however. The contribution limits are set by the CCRA and by age 69 you are required to discontinue the plan, convert it into another retirement vehicle like an annuity and begin withdrawing the plan funds, which will be fully taxable. At the time of your death the funds form part of your estate and, except in the case of a spouse or dependent child as named beneficiary, will be subject to estate taxes.

Non-registered investments represent a third common means of wealth accumulation, but then the tax liabilities are three-fold:

1. interest income is taxed as it’s earned at your marginal rate,
2. dividends, which benefit from the rate reduced by the dividend tax credit (in the case of Canadian companies only) and
3. capital gains, taxable at the rate of 50%, payable when the investment is sold.

Now some insurance products are offering tailored solutions to financial and estate planning strategies that offer wealth-growing opportunities in addition to the insurance coverage, and provide for attractive tax advantages as well. Specifically whole life and universal life policies take advantages of allowances by the government for tax-free wealth accumulation. The premiums paid in these plans represent an excess of the value of the insurance coverage, the difference being invested as the wealth-building part of the policy. The money invested grows annually without being taxed. These products can be designed to your individual preferences, with the investment part tailored according to the asset mix and risk tolerance levels you are most comfortable with. In each case the effect is to provide a significant benefit to the value of your estate.

Business Insurance Products

In today’s competitive marketplace attracting and retaining quality personnel is a constant concern and potential drain due to interrupted operations and turnover costs. Quality workers want to work for an organization that appreciates them as a whole person. This means that companies need to show that they support their employees by investing in their employees.

Your organization will realize many benefits by initiating a Group Benefits Plan. From improving morale, increasing productivity and employee loyalty, deducting the costs as a business expense to rewarding valued employees with enhanced coverage – the introduction of a customized benefit plan will foster a more positive and productive culture within your organization.