Universal
Life
Universal
life is one of the most flexible types of life insurance you can buy.
You decide how much to pay every year, subject to specified minimums and
maximums. It is life insurance with tax sheltered investments chosen by you.
The insurer will recommend a target premium, needed to pay to keep
the policy in force to age 100. But you are always free to pay less or more.
And you can borrow or withdraw money at any time.
SOME FAMILY AND BUSINESS REASONS TO CONSIDER THE TAX-DEFERRED GROWTH IN
A UNIVERSAL LIFE PLAN
a) You have income beyond your needs.
b) Income is triggering clawback of your pension benefits.
c) Partnership / Keyman / Shareholder buyout
d) Non registered Pension Plan
e) Tax deferred growth for beneficiaries
To obtain
a quote please use our Term
Life Quote.
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Next
Generation Plan
YOU
WISH TO:
Transfer some of your assets to your children or grandchildren and want to
reduce the taxes and probate fees on your estate. In addition, you may wish
to receive income from this investment.
HERE’S HOW IT WORKS:
A Universal Life insurance policy is taken on the life of your child or even
your grandchildren with you as the owner, and your child or grandchild as
contingent owner. Into this plan, on either a lump sum or an annual basis,
you make payments, which will grow tax-deferred because they are tax sheltered
within the life insurance contract. On your death, your child or grandchild
becomes the owner of the policy.
This unique solution provides tax-deferred growth during your lifetime and
tax deferred rollover to the next generation at death. Taxes and probate
fees that usually due at your death are avoided as your child inherits completely
tax-free.
We can custom design a plan that will meet your needs.
Click on
the Term
Life Quote.
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Non
Taxable Retirement Income Plan
YOUR
CONCERN:
You are already contributing the maximum to your RRSP, but you know that
it is not enough for a comfortable retirement. Taxation is systematically
reducing your non-registered assets and it has become more difficult for
you to save for your retirement.
YOUR STRATEGY:
A Universal Life Insurance plan allows your non-registered assets to accumulate
exempt from accrual taxation. You can move your non-registered assets into
a Universal Life Insurance plan and allow them to grow there tax-exempt in
an investment you choose. The longer the better.
When you need retirement income, request a bank loan using the policy as
collateral. Banks will extend a loan – or a series of loans – up
to 90 percent of your policy’s cash value.
As a loan is not taxable it can have a dramatic effect on your income; increases
over 50% are not unusual.
No loan payments are required until your death. The bank loan is then paid
in full with the tax-free death benefit. And, as an added bonus, any remaining
balance will be paid to your heirs as a tax-free income.
Click on the
Term
Life Quote.
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Surplus
Capital Plan
YOUR
CONCERN:
You are a shareholder of a Canadian controlled private corporation
which has a significant amount of surplus capital or retained earnings.
If you try to remove it you will attract high personal taxation. However,
if you leave it in the corporation it incurs corporate taxation at the highest
rate, in many cases actually higher than your personal tax rate.
While you may not need this surplus capital currently, ultimately,
your heirs will want to remove it. To allow them to do this without triggering
onerous taxation, you need to convert this surplus capital to non-taxable
income for your estate.
HOW TO SOLVE THE PROBLEM:
You transfer the surplus capital into a Universal Life policy. Universal
Life insurance allows the surplus to grow exempt from annual taxation.
Upon your death, the policy pays out a tax-free death benefit. The
benefit, less the adjusted cost basis, is credited to a Capital Dividend
Account.
The Capital Dividend Account is paid out to your heirs tax-free, thus
increasing the ultimate after-tax value of your corporation to your heirs.
Click on the
Term
Life Quote.
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Income
Annuity Plan
YOUR CONCERN:
The level of interest paid on guaranteed investment certificates has
been extremely low for some time. Less than a decade ago, a $100,000 certificate
paying annual interest at 8% return $666 a month. Today’s low rates
mean $333 a month. You have the right to expect more and enjoy a comfortable
retirement, without having to put your savings at risk.
HOW TO SOLVE THE PROBLEM:
The solution is a life annuity, which produces a higher income because
the investment is based on your age and includes a return of capital. You
can use some of the additional income to replace the capital for your children
by the purchase of life insurance.
You receive the income you want – and the inheritance for your
children remains basically intact.
Please complete
the LIFE
ANNUITY QUOTE.
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Corporate
Insured Annuity
YOUR
CONCERN:
Your company, wholly owned by you, has $1,000,000 in securities. Since
the paid-up capital is nominal, any distribution of its retained earnings
will be treated as a taxable dividend.
HOW TO SOLVE THE PROBLEM:
You sell the securities and acquire a single premium immediate life
annuity with no guarantee on a non prescribed basis. As you are in your late
sixties a large proportion of the income is a return of capital.
You now use a portion of the proceeds to pay the premiums on a $1
million policy on your life.
At your death, the annuity payments cease and the company receives
$1,000,000 from the life policy.
If your shares have been left to your wife or in a spousal trust,
the shares roll over with no tax liability. Or, if the company is wound up,
either party will receive a tax-free dividend out of the Capital Dividend
Account.
WARNING
If you had been unable to qualify for the coverage or had failed to plan,
the distribution of retained earnings would have attracted approximately
$500,000 in taxes.
This Plan can be also be adopted to existing registered or non registered
annuities.
Please complete the Term
Life Quote.
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Family
Retirement Pension Plan
YOUR
CONCERN:
You have limited means to make certain you have a good pension.
You are aged 30 – 60, married with children and earning about
$50,000 per year. Even if your spouse is working, your TAX FREEDOM DAY is
probably around July each calendar year. That means you work approximately
7 months of the year just to pay your income taxes! Or 171/2 years out of
30 years! All this doesn’t leave enough to save, even for a modest retirement.
Remember, you need five hundred thousand dollars ($500,000) in liquid assets
at 6% to give you an income, after tax, of $21,000. Putting $3000 a year
into a RRSP is not going to get you $500,000!
HOW TO SOLVE THE PROBLEM:
The answer is the FRPP (Family Retirement Pension Plan) where a healthy
parent assists you with the purchase of a life insurance policy on his or
her life. In normal circumstances the parent will predecease you and you
will inherit the lump sum, TAX FREE. You also can contribute to the purchase
of the policy.
Thus, instead of leaving you a modest sum in a Will, the parent can
use that money to help you in your retirement. In fact one parent said that
they had increased the value of their estate to their daughter by at least
800%. This strategy can carry on to the next generation as your children
set up a policy on your life and you help to pay the premium.
These FRPP’s therefore, can be a blend of parent/child contributions.
In effect this becomes your RRSP, the difference being that the proceeds
are NOT TAXABLE. Obviously not all your savings should go into this plan;
your own situation is unique.
Click on the
Term
Life Quote.
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Maximizing
Your Legacy
YOUR
CONCERN:
You are aged 65 and have set aside $250,000 for your children, but wish it
were more.
But you find out that you can increase that to $650,000 by buying an annuity
combined with insurance.
YOUR STRATEGY:
Your $250,000 buys an annuity income of $23,000 which is only partially taxable
and leaves you with $18,500 for the insurance premium.
So instead of leaving them $250,000 in GIC’s or funds, you leave them
$650,000 in non-taxable cash.
Click on the
Term
Life Quote.
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Insured
RRIF Plan
YOUR CONCERN:
You have sizable amount built up in your Registered Retirement Savings
Plan (RRSP) or your Registered Retirement Income Fund (RRIF). What happens
if you die before the money is used up? If you have a spouse, the money can
be transferred, but when your spouse passes away, your heirs stand to lose
up to half the money to taxation.
HOW TO SOLVE THE PROBLEM:
You can protect the entire balance of your RRSP or RRIF by using life
insurance. A death benefit from a life insurance policy is not taxable. All
you need to do is to purchase enough coverage to protect the amount of your
estate value that would be paid to Revenue Canada. The benefit far outweighs
the cost.
For example: You have a RRIF balance of $200,000 in the year of your
death. If we assume Revenue Canada taxes this amount at a rate of 50%, your
heirs would have to write a cheque for $100,000 to cover the tax.
If however, you have a life policy that paid a tax free death benefit
of $100,000 your total balance would now be restored to $200,000.
You can now enjoy the full value of your life’s work and pass
your own estate, intact to your heirs.
Click on the
Term
Life Quote.
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