How To Use Life Insurance Creatively
Posted In: Business Succession & Estate Planning

How To Use Life Insurance Creatively

When you mention the words life insurance, people’s attention starts to waiver, usually because most of us only know it as a catastrophic death benefit and very few people want to think about, much less plan for death. However, if you care about investment returns, paying less in taxes and keeping more for your loved ones, you should pay attention to life insurance. It is a creative tool that is extremely valuable in tax and estate planning. 

Tim Cestnick points out in the attached Globe & Mail article (here).  The benefits of a participating life insurance policy are below:

  • Enables tax-free withdrawals from your corporation
  • Transfers assets tax-free
  • Provides liquidity when needed
  • Provides cash in retirement
  • Equalizes an estate for your family

Life insurance may be something high-net-worth individuals thought they no longer needed.  However,  when you look at it as a creative tool, it makes sense to integrate it with your overall financial planning. If you’d like to have more of conversation on how to use life insurance for its tax and investment benefits, please contact us here

Please Note: There are some tax changes coming in 2017 that won’t make this strategy as effective.  We encourage you to take advantage of the current tax rules!

Jeff Devlin | Certified Financial Planner, Director