Insurance Solutions

Asset Protection & Legacy solutions using Insurance

Insurance is an essential component of a complete financial plan and an effective instrument for investment protection. Various kinds of insurance solutions will not only help protect you and your family in different ways against the cost of accidents, illness, disability, and death, but can assist in creating a lasting legacy for your loved ones.


 

Estate Preservation/Tax Minimization

You can offset the costs that are incurred at death and preserve your estate by having the insurance proceeds pay them for you. Taxes, liabilities, estate-related and other future costs can all be offset by your permanent coverage. Tax-exempt insurance (such as universal or whole life insurance) can eliminate the annual taxes you pay on your investment growth, as well as those payable when you die. Individuals tired of being punished for strong earnings may appreciate such an opportunity.

Individual Asset Transfer – White paper

Estate Maximization

By taking advantage of the tax-preferred status of universal or whole life insurance, you can maximize the value of assets you plan to pass on to the next generation. The long-term value of these products can often far eclipse what would otherwise be earned through regular investing.

Individual Investment Strategy – White paper

Wealth Creation/Income Enhancement

If you are in the early stages of wealth accumulation, insurance can be a low-cost way to create a financial safety net in the event there is a loss of an income earner, certain insurance products can provide a supplemental stream of income during retirement. The net income derived from this strategy may be significantly higher than what is achievable with traditional fixed-income vehicles, especially during times of low interest rates.

Individual Retirement Strategy – White paper

Minimize Corporate Taxes/Maximize Corporate Assets

If corporate assets are invested in fixed income, then an insurance strategy can not only reduce its taxable income but it will lower the value of the business by the amount of the investment, thereby reducing the inevitable capital gains tax liability. In addition, by taking advantage of tax-deferred growth inside universal or whole life insurance, corporate assets can avoid accrual taxation and grow to a much greater value than if they were invested in a regular account. Not only that, but upon death, most, if not all, of the proceeds can be paid out of the corporation tax-free. Ordinarily, they would be paid out as taxable dividends, requiring approximately 1/3 of the value to be paid in taxes.

Learn More About Corporate Asset Transfers

Facilitating charitable donations

Charitable giving is unique in that it presents a number of tax benefits, both in your life and at time of death. Current legislation provides individuals with non-refundable federal tax credits when gifting to registered charities. Instead of giving a dollar amount to Canada Revenue Agency, by way of taxes at death, you may wish to bequest this value to a charity of your choice. Although your beneficiaries will receive the same value as before, you will have the ability to support a charity or begin a legacy in the form of a charity or bursary program.

Estate Equalization

A common example of where estate equalization is key is where an estate includes shares of a family business that will be distributed only to family members who are active in that business. Often, the business is the estate’s major asset and the amount remaining for family members who are not involved in the business is significantly less. To facilitate an equitable distribution of an estate amount beneficiaries, a life insurance policy can provide a lump sum to the family members who do not have an interest in the business, to ensure a fair inheritance.

Generational Planning

Personal wealth can be measured by what’s most important to you – your family. When deciding on options for your family’s future, you should consider the following:

-Would you like to provide financially for the future of your children or grandchildren?
-Should you give while still alive, or at death through your will?
-What are the tax consequences of giving money to children?
-Can you gift while still alive, maintain control of the assets and benefit from tax-deferred savings?

There are strategies that offer affordable ways to provide for your child or grandchild at each stage of life. These strategies are ideal for parents who would like to start saving for their child’s future, and grandparents who would like to leave an inheritance for their children or grandchildren. With this strategy, you can build a legacy for your family, while maximizing the value of your financial gifts.

Critical Illness Insurance

In the event that you are diagnosed with a critical illness that is identified in the insurance contract, a policyholder would receive a lump sum, tax-free payment to use at their discretion. This payment would serve to insulate the policyholder and their family against significant changes to their lifestyle and the financial burden of managing and surviving the illness. This type of insurance becomes especially important if you have dependants.

Individual Disability Insurance

A disability can come on suddenly or slowly (like a degenerative condition.) It can rob you of your ability to earn a living. Disability insurance is a type of coverage that gives you protection against the chance of losing income if you become disabled and you are not able to pay your expenses. Similar to Life Insurance, people often get Disability Insurance Policies through their work. It is important to review group coverage to fully understand the coverage in place (which in most cases is very generic).

Long-Term Care Coverage

Long-Term Care Coverage helps address the various health, social and personal care needs of individuals who no longer have the ability to care for themselves. This type of insurance is affordable and can be purchased without depleting your savings or compromising your lifestyle. Long-Term Care Coverage rates are dependent on your health, age, and amount of insurance you purchase.

Insured Annuities

Insurance can be and should be viewed as an investment class. When used strategically, insurance can be used along-side annuities to provide a steady cash flow throughout your life.

Registered Insured Annuities

Registered insured annuities is a type of annuity that allows you to use registered assets saving you up to 40% in taxes and can provide returns up to 50% better than investment-grade bonds or GICs.

Learn More About Registered & Insured Annuities

Schedule an introduction with MLD Wealth Management and secure your financial future.

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