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Insurance

Life insurance is a fascinating product! You buy it for someone else. You pay for it with cash, but you must be in relatively good health before you can get it.Once you own it ,you are the only party who can change the contract. It pays out when you die so your loved ones can have the life they deserve. It is one of four assets which is truly tax sheltered – your residence , TFSA , lottery winnings and life insurance.

 

In its simplest form, life insurance is pooling the resources of many to cover a loss of an individual in the group that is too big for the individual to bear alone. Everyone pays in and eventually everyone receives their individual benefit based on how much they contributed to the pool. It has been around for well over a hundred years and has grown exponentially over the last few decades. A 1,000,000-death benefit was the exception a few years ago. Now many policies are sold each year in Canada with a 1,000,000 premium!

 

What has stayed constant is the preferred tax treatment of life insurance policies with the biggest being the tax-free death benefit. Other tax perks, like the tax-free transfer of policy ownership within families, and the tax-sheltered growth of cash within the policy makes a life insurance policy a rare asset with few peers. Although the tax department has made a few changes to the tax treatment of life insurance policies over the years- some were just too good to be true – the product has maintained its preferred tax status.

Owning life insurance isn’t mandatory so many people are able to easily ignore it rather than voluntarily explore its benefits for their situation. That is why most people need a qualified life insurance advisor to, first, understand how much and what kind of life insurance they need, and, secondly, take the necessary steps to get their insurance policy issued.

That is what we do.

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