*Life insurance can provide in many “unexpected” scenarios
While most companies market life insurance as a way to prepare for the unexpected, we think of it as planning for every possible scenario, many of which can be anticipated.
PROVIDING FOR YOUR FAMILY
If you’re one of the primary bread winners in your home, life insurance can give you the peace of mind that your spouse and children will be provided for in the sudden event of your death.
INSURING YOUR DEBT
If you were to die unexpectedly, all of your debts would be passed on to your family, including your entire mortgage. Having insurance would ensure they don’t have to bear that financial burden and can even alleviate additional expenses (e.g., funeral arrangements).
PROTECTING YOUR BUSINESS
Remember, there are just as many corporate needs for life insurance:
- Insuring against all company debt
- Coverage of assets, including the key people who create profit
- Transferring of shares or partnership interests from beneficiaries to the firm
- Tax-free benefits of using cash value life insurance
TRANSFERRING ASSETS TO CHILDREN & GRANDCHILDREN
If you want to guarantee a tax-free wealth transfer to your heirs, you can establish cash value polices for them. That way, you can control the investment portion which grows tax-free on their behalf, then transfer the policy free of income tax.
DONATING TO CHARITY
Life insurance can help you provide for the charities that matter to you, as well as provide you with significant tax credits. Your generosity could mean:
- Taking out a policy to benefit a charity
- Transferring a policy no longer need
- Naming a charity as a beneficiary
EQUALIZING YOUR ESTATE
In some cases, we can actually use life insurance to help equalize your bequests, such as:
- You intend to leave shares of a business to one child in lieu of another
- You want to pass on a cottage or vacation property to a particular child
TAKING ADVANTAGE OF TAX BENEFITS
Even if death is one of life’s certainties, there are practical ways to avoid taxes by taking advantage of your life insurance, including:
- Provide estate liquidity in paying taxes that become payable as a consequence of death
- Make your policy a haven for funds you don’t want exposed to income tax
- Consider the tax-free investment growth of permanent cash value life insurance (e.g., Universal Life or Participating Whole Life)
SAVING FOR RETIREMENT
Although life insurance is typically paid out when you die, there are options to take advantage of the money in your policy while you’re still alive, including:
- Augmenting your retirement savings with Universal Life or Participating Whole Life
- Using cash value life insurance for building wealth
- Taking advantage of the tax-free investment growth of your insurance policy
Other insurance considerations for your income earning years:
Critical Illness insurance – Protects you and your income if you are unable to do your job
Disability insurance – Offers upfront funds to get through a serious covered condition such as cancer, heart attack or stroke
Mindset Reset
Whether you’re protecting your family or your business against financial loss, life insurance is one of the smartest investments you can make to protect what you value most. Remember, your family and employees depend on you for the life they currently enjoy, and for their future lifestyle.
Life insurance vs. Long-term care
Long-term care is often neglected but it is a misunderstood benefit.
In fact, it has far more value than you may think because living a long time can mean outliving your savings.
Keep in mind, government healthcare is NOT the same thing as long-term care.
If a life-changing event such as dementia or stroke occurs, your health care only covers the most basic health care (in often less than desirable settings). This is why we partner with a nationally recognized expert in both living benefits & long-term care insurance.
Insuring yourself against rising long-term care costs
These days, people are living longer than ever before.
That’s why it’s smart to plan ahead for potentially enormous long-term care expenses:
⇨ Accommodation in long-term care facilities: $1500 to more than $10,000 per month
⇨ Private home-care service: $20 to $90 per hour for personal care or nursing care
⇨ Extensive care: Potentially can add up to between $50,000 and $100,000 a year
From a cost perspective, you can either:
- Assume the all the financial risk yourself
- Try to mitigate it (e.g., by trying to take care of your spouse)
- Transfer it to a good insurance policy
Keep in mind: The coming needs of the baby boomer generation will be indeed be unprecedented and affect all levels of health care (i.e., driving up the costs).
Mindset Reset
Never use your gut to decide on insurance matters. Part of running a stress test on your investment portfolio is performing a “what if” test on the sustainability of your retirement income. With adequate coverage, you can live a long life the way you intend it.
Ensure your standard of living with forward-thinking
Long-term care benefits can help you live without sacrificing or compromising.
✓ Provides income or funds when an individual is dependent or in need of assistance from another person due to physical or mental impairment
✓ Based on your needs and situation, not based on a specific disease or accident
✓ Unlimited benefit option and is for life
✓ Remains in force through all stages of retirement
✓ Can have limited payments so to minimize cost in later years while coverage remains in force for life
Best of all, together with our living planning specialist, we can plan for a life that cost as low as 5-10% of actual care costs today.
FAQ
While our compensation structure for investment services is fee-only, insurance products are always distributed using a commission model in Canada – regardless of whether you purchase from an insurance agent, or through your insurance advisor. As a fiduciary advisor, it is our job is to help lower your costs whenever possible to increase your overall wealth.
Our insurance products are offered through 1723553 Ontario Inc. Plus, we also partner with an independent specialist for long-term Living Planning. As both a fiduciary wealth advisor and licensed insurance advisor, Ray Choo can help you choose coverage that’s in your best interests.
“We wanted someone who watched out for our best interest and Ray gave us that.”