Insurance is an essential component of a complete financial plan and an effective instrument for investment protection. Various kinds of insurance solutions will help protect you and your family in different ways against the cost of accidents, illness, disability, and death.
Proper insurance planning can create cash flow during your lifetime, protecting you from life’s unforeseen yet always present challenges and obstacles.
Life insurance is an instrument you use to protect the people you love most by ensuring their financial security if you pass. A life insurance policy pays a tax free cash benefit to your designated beneficiaries at the time of your death. While people often get Life Insurance Policies through their work, these policy are usually generic and may not be adequate for your circumstance. As well, they terminate when you leave that employer.
A whole life insurance policy is comprised of both an insurance and an investment component. The insurance component pays a stated amount upon death of the insured. The investment component accumulates a cash value that the policyholder can withdraw or borrow against and its interest or dividends accumulated is tax deferred.
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.
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.
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. As well, this type of insurance carries with it various tax advantages.
A legacy bond is designed to help you pass on your wealth in a tax efficient manner, with the added peace of mind that you are able to enjoy ‘income’ from your capital. ‘Income’ payments are withdrawals of capital. A Legacy bond is structured so that your capital is invested during your lifetime and still has the ability to grow after your passing.
The guaranteed inheritance solution is suited to clients that have moved beyond the aggressive wealth creation/building phase and are now interested in intergenerational financial security and/or leaving a legacy to their children, grandchildren, charity, or community. When used effectively, guaranteed inheritance is able to achieve a rare (even exclusive) combination of risk-free, tax-free principal growth.
This type of strategy provides a significant enhancement to the amount available for transfer to surviving shareholders than traditional taxable investments. Using this type of strategy your corporation can retain control of its capital in a tax-advantaged life insurance policy, while preserving more of the business assets for transfer to heirs than traditional investments where income is taxable every year.
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 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.