Income Shelter - Universal Life has become a vital tool in tax planning
strategies. In addition to providing liquidity with tax-free death benefits, Universal
Life also offers tax deferred accumulation with a wide array of investment options.
Preferred tax treatment and flexibility allow for income sheltering and retirement
Corporate Pension Augmentation - The advantage of tax-sheltered growth within a Universal
or Whole Life plan allows corporations to structure pension augmentation for executives.
By over funding the insurance requirements the cash value will accrue tax-deferred until
retirement, at which time withdrawals can be made or leveraging can be implemented.
Leveraging Strategies - Cash Values from a Universal or Whole Life plan can be assigned
to a bank, which in turn provides a line of credit to use for retirement income.
The advantages to these arrangements are that cash values within the plans continue to
accrue without taxation. As well, individuals can access their line of credit with out
having to pay personal income tax. In corporate arrangements the income is taxable to the
retired shareholder. However in both cases, if structured properly the interest paid on
the line of credit may be tax deductible. Professional Assistance should always be sought
prior to implementing any of these arrangements.
Provide for Children/Grandchildren - The cost of an education, starting a
business, a first home, or supporting a young family can be considerable if not
The living or death benefits of Life Insurance Plans can assist children and grandchildren
when they need it most.
Capital Gains - Upon the death of the last spouse capital gains become taxable and payable
for the taxation year.
Growth above the adjusted cost base of a non-registered investment such as: stock and
bond portfolios, revenue and / or recreational properties, business interests, as well
as, personal properties intended as investments all become taxable at the capital gains
Offsetting gains and preserving the estate can be obtained at a fraction of the cost by
the purchase of Life Insurance Plans.
RRSP/RRIF - Taxation at death - The taxation of RRSP's / RRIF's at death is a significant
concern for most Canadians. RRSP's and RRIF's can be rolled to a spouse upon death without
tax, however, if single or widowed they become taxable as income in the year of death. Up
to almost half of the asset can be lost to tax. The use of Joint Last-To-Die Life
Insurance Plans to protect this loss is a very popular and economical solution. Term to
100, Universal Life, or Whole Life are recommended for their permanent coverage
Sheltering Taxable Assets - Income Shelter - Universal Life has become a vital tool in tax
planning strategies. In addition to providing liquidity with tax-free death benefits,
Universal Life also offers tax-deferred accumulation with a wide array of investment
options. Preferred tax treatment and flexibility allow for income sheltering and
Tax Free Death Benefits - Tax Free Estate Transfer - Whether using Life Insurance Plans to
preserve your estate or strategically shifting money into a plan for sheltering purposes,
the benefit of tax-free death proceeds should not be overlooked.
Significant portions of income tax, probate fees, and settlement expenses can all be