Customize life insurance for wealthy clients

October 19, 2011 | Last updated on October 19, 2011
2 min read
  • Use life insurance for retirement planning

    The tax-exempt accumulation of cash in a life insurance policy can function like an RRSP on steroids. When your client retires, he can access the funds through a collateral assignment of the policy to a lending institution for a tax-free loan to supplement retirement needs.

    See this strategy in action. Read this month’s case study, Help clients access RRSP funds and save tax from September’s Advisor’s Edge.

  • HAVE YOU GIVEN THOUGHT TO YOUR LEGACY?

    • $1.2 billion

      The amount paid in claims each week to Canadians

    • 95

      The number of life and health insurance companies in Canada

      Source: CLHIA

  • Insure children to ensure wealth transfer

    If your client has grandchildren, life insurance can transfer wealth from one generation to the next on a tax-advantaged basis. Insuring children with grandchildren as the beneficiaries is a common way to transfer wealth efficiently and effectively through the generations.

    To make sure the children aren’t stuck paying premiums after your client dies, design a life insurance plan that lets the client to pay premiums up to a certain date (his 70th birthday—presumably before he will pass away), or for a limited amount of time (the next ten years).

    Or, have your client purchase an annuity lasting the entire length of the life insurance policy with payout amounts that cover the premiums.

  • Use life insurance for retirement planning

    The tax-exempt accumulation of cash in a life insurance policy can function like an RRSP on steroids. When your client retires, he can access the funds through a collateral assignment of the policy to a lending institution for a tax-free loan to supplement retirement needs.

    See this strategy in action. Read this month’s case study, Help clients access RRSP funds and save tax from September’s Advisor’s Edge.

  • HAVE YOU GIVEN THOUGHT TO YOUR LEGACY?

    • $1.2 billion

      The amount paid in claims each week to Canadians

    • 95

      The number of life and health insurance companies in Canada

      Source: CLHIA