Last week, I wrote “Why Insurance can be frustrating for the advisor as well!” If you missed the article, you can find it here:

While I am a huge advocate of term insurance for many, permanent insurance has its place for some. Term Insurance is for “IF” you die and permanent insurance is for “WHEN” you die.

A permanent life insurance plan can be one of the most tax-efficient ways to build and transfer your estate. If you have taxable investments, it’s advisable to at least explore how a permanent life insurance policy could provide tax savings to you and a larger estate to your heirs.

You will notice that I use the word “want” and not “need”. I firmly believe that no one needs to leave money to their children or a charity, rather it is something they want to do. That said, I think everyone would agree that they would prefer to give more to family and give less to taxes.

How does Life Insurance fit into my estate plan?

Life insurance can provide a solution to a wide range of potential objectives when it comes to estate planning. You can use insurance to either create an estate for your heirs or to preserve your existing estate. Although life insurance premiums are generally not tax deductible, the benefit paid out is not subject to income tax.

I want to leave my cottage or investment properties to my children.

Life insurance can be used to ensure that assets such as a cottage or investment properties do not have to be sold and can be passed on to your beneficiaries. If there is no life insurance in place, does your family have enough cash on hand to cover either the mortgage or tax liabilities on such properties?  You can offset these costs using permanent life insurance coverage. The insurance proceeds will bypass the estate and, therefore, the entire probate process.

I want to leave money to a charity.

You can use life insurance to provide funds to a charity ensuring your support continues even after your death. Depending on how the plan is structured, you can benefit from either immediate tax savings today or your estate can take advantage of the tax savings upon your death.

I want to leave money to my children and/or grandchildren.

If you want to leave money to either your children or grandchildren, you may want to take advantage of life insurance to maximize the value of your estate upon your death. The tax preferred status of universal life or whole life insurance can often outperform what would otherwise be earned through regular investing.

How I Help

There is not a one size fits all solution when it comes to insurance and ultimately it should be you who decides which coverage is best for you, your family and your business. It’s my job to help you clearly understand what your options are so you can make an easy and informed decision when it comes to buying insurance.

Being an insurance broker with strong relationships at most of the major insurance carriers, I am confident that you are in great hands when I am on your side. I can help you navigate the market to ensure that you obtain the best possible coverage and price for your situation.

I am always happy to provide a free, no-obligation insurance consultation or second opinion.  Feel free to reach out!

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By Jeff Romansky

CHS, CPCA Principal, SecurePlan Insurance Solutions

Jeff started his insurance career in 2006 by helping hundreds of insurance advisors grow their business by providing them with comprehensive advice, consultation and training. After nine successful years, he decided to take his knowledge and start his own practice to ensure his clients are getting the best advice. His office is based in Grimsby, ON and he serves clients throughout Southwestern Ontario and the GTA.