There are no guarantees in life… that’s why there’s life insurance.

Benjamin Franklin famously quipped: "In this world nothing can be said to be certain, except death and taxes." Were he alive today, we believe that he would have no doubt recognized life insurance as the instrument of choice to deal with both.

Though death may be certain, the longevity of a healthy individual is not. This creates two contrary risks: living too short a life to create financial security for one’s family; or living too long a life to preserve one’s wealth. Insurance products deal with both of these longevity risks: term life insurance to bolster your family’s financial security in the event of your early demise; permanent insurance to enhance and preserve your legacy; and annuities to provide guaranteed retirement income you can never outlive.

Lastly, your biggest tax bill will likely be on your death. All non-registered capital is deemed to be sold at fair market value, triggering in your final tax return the accrued capital gains on investments and real estate (other than your principal residence). All registered capital (RRSP, RRIF) becomes taxable income in the year of death. This can create a liquidity crisis when there is not sufficient cash in the estate to cover the large tax bill. Life insurance provides the necessary cash in the form of a tax-free death benefit at exactly the right time.

Permanent life insurance has some unique qualities that make it a very useful tool for tax and estate planning:

• It is generally exempt from tax, both annual taxation for the policy owner as well as for the beneficiary receiving the death benefit. 
• The policy can be customized to deal with specific tax and estate planning issues by specifying the amount and type of coverage, the insured, the owners and the premium schedule.
• It can be structured to provide cash precisely when the tax liabilities arise.
• A corporate-owned policy allows capital to flow out to shareholders tax-free.

For more information on life insurance-based estate planning strategies click here

Term insurance is a low-cost life insurance policy that provides coverage at a fixed premium for a set period of time.

Term insurance is ideal for healthy individuals who want affordable coverage and future flexibility. It is often used as risk protection as it provides funds upon death to cover immediate expenses, mortgage payments, their dependent children’s needs and personal debts. It also benefits small- and medium-sized business owners by funding buy-sell agreements, providing key-person insurance, paying outstanding loans and supporting significant start-up costs.

Whole life insurance provides permanent, lifetime protection with guaranteed cash values. This unique product distributes dividends that will  increase the policy’s value by maximizing wealth on a tax-efficient basis. Policy owners can make additional payments into the plan beyond the required premiums. This creates additional funds which will drive both higher cash and death benefit values, as well as allowing the policy owner to make withdrawals, or borrow from the policy. Upon the insured’s death, the beneficiaries, estate or corporation will receive the death benefit tax free.

Whole life insurance is ideal for individuals or small business owners seeking insurance protection and tax savings. The tax free death benefit can be used to pay estate fees, support charitable giving, or use the cash value to pay for the insurance costs.

Universal life insurance is an option that provides permanent lifetime protection with a tax-savings component. This type of policy can be modified over time to fit your lifestyle. Upon the insured’s death, the beneficiaries, estate or corporation will receive the death benefit tax free.

Universal life allows additional deposits into the policy, that are in addition to the cost of insurance, this additional funding is deposited into an investment option where funds may benefit from potential growth on a tax-deferred basis. This allows you to make withdrawals, borrow from the policy account, or use its accumulated savings to help pay insurance costs.

Universal life insurance is an ideal choice for individuals and businesses seeking insurance protection with an investment component.

Whole life and Universal life insurance are customizable with features that can help you meet the following needs:

• Retirement Planning
  • Creates a tax-deferred savings opportunity if you have maximized your RRSP and TFSA contributions for the year.
• Business Owner Planning
  • Provides protection for your company with additional executive compensation and tax-free funds to the company upon death that may be used to satisfy liabilities or can be distributed to facilitate shareholder buyouts.
  • Provides financial options if you are a small business owner.
• Estate Planning
  • Provides protection for your family and heirs, as the proceeds from the life insurance can be paid tax-free to your beneficiaries. These funds can then be used to pay capital gains taxes on the final tax return.

Disability insurance is a living benefit product used to protect you against injury or illness that results in a loss of earned income. Disability insurance replaces lost income (generally on a tax-free basis) if an individual becomes disabled and unable to perform their day-to-day job. Disability insurance can provide financial security and a continuous standard of living.

Disability Insurance can provide coverage for individuals in a wide range of occupations. A few benefits to disability insurance for small business owners include reimbursement for certain business expenses, fund buy-sell agreements, assistance in hiring a replacement employee, and protecting profitability.

Critical illness insurance is a living benefit product that protects against loss of income and depletion of savings used to fund critical illness treatments. As a form of health insurance, it generally pays a tax-free, lump-sum benefit if an individual is diagnosed with an illness that is covered under the permitted illnesses. The insurance benefit can be used for a variety of expenses, such as covering treatments, funding private care or paying for specialized medical needs.

Critical illness  insurance allows an individual to focus on their health while helping to protect against the financial burden of health care costs.