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Strategy

Your Need

Your Situation

The Solution

Insured Retirement Strategy

To minimize the tax on your savings and investments today, and maximize your retirement income tomorrow.

RRSP fully utilized, annually.

Client accumulates tax-deferred savings in a universal life insurance policy. At retirement, the policy is used as collateral for a series of loans from a bank or other financial institution.

A desire to reduce taxes today and increase income at retirement.

The loans are paid back using the death benefit, and any remaining balance is passed on to beneficiaries, tax free.

In good health (to keep cost of insurance low).

Minimize the face amount to keep insurance costs low.

Free of debt and non-tax-deductible interest payments (e.g., mortgage).

Client in highest marginal tax bracket.

There is an underlying need for insurance.

Aged 30 to 55.

Strategy

Your Need

Your Situation

The Solution

Income Replacement Strategy

To ensure that your surviving family members can maintain their lifestyle if you were to die unexpectedly?

Dependent children, spouse or other family members.

Determine insurance amount required using the Income Replacement Worksheet.

A significant mortgage balance or other debt.

The death benefit of the policy is passed on to the beneficiary(s) free of probate and other estate costs like legal, accounting and trustee fees.

Major future expenses, such as education.

Universal life allows tax-advantaged pre-funding of COI.

Age 25 to 55.

Some Company’s Term plans can meet future needs by offering conversion to UL with MTAR duration credits.

Strategy

Your Need

Your Situation

The Solution

Family Health Strategy

To pass your estate on to your heirs without losing significant value to probate, taxes and other estate charges while also saving taxes during your lifetime?

Older individuals who may be in poor health resulting in very high insurance premiums.

Designate your client’s adult child or grandchild as successor owner of the contract where a child or grandchild is the life insured.

Heirs are young and healthy.

Invest the maximum amount of money into the policy to generate a high cash surrender value.

May want to pass their assets on to heirs while they are still living but maintain control.

Upon the policy owner’s death, the child or grandchild can take ownership of the policy on a rollover basis without probate or a taxable disposition.

Large amount of assets earmarked for heirs.

Alternatively, at an earlier time the policy owner may transfer to a child on a tax-deferred basis.

Age 50 and up

Optimize the sum insured

When the Child or grandchild becomes the owner, funds may be withdrawn and will generally be taxed at the child or grandchild’s lower rate

Strategy

Your Need

Your Situation

The Solution

Estate Preservation

To protect the proceeds of your estate (i.e. disposed non-registered investments, real estate, shares of a corporation, RRSPs and RRIF balances, etc) from taxation when they can’t be rolled over to a spouse or infirm dependent?

Sizable personally owned assets (stocks, funds, real estate, business assets, etc.)

Project the total expenses at life expectancy against the estate using the Estate Preservation Strategy Client Worksheet.

Large RRSP/RRIF.

We will use our software to solve for the face amount and premium to cover the estate tax liability at any point in time and select the most cost effective company to supply this insurance.

Assets that will trigger taxes may hold sentimental value to heirs so you want to ensure they do not have to be liquidated to pay taxes e.g., cottage.

Age 50 and up.

Strategy

Your Need

Your Situation

The Solution

Personal Estate Transfer Strategy

To bequest investment assets to your heirs while avoiding probate and other estate costs, potentially protecting the investment from creditors and deferring or eliminating current taxation of the investment?

Generating income in excess of living expenses.

Transfer liquidated non-registered assets into exempt life insurance policy.

Non-registered funds set aside for specific bequest.

Immediate estate enhancement via insurance.

Unlikely to ever need capital for living expenses.

Reduction of current tax burden.

Want to maximize estate.

Tax-free death benefit paid directly to named beneficiary.

Paying too much current income tax.

Funds are accessible and under client’s control.

Desire to maintain control of assets while alive.

Strategy

Your Need

Your Situation

The Solution

Charty Giving Strategy

To purchase valuable permanent insurance protection, obtain the benefit of tax-deferral inside the insurance policy while re-investing the capital in the policy back into your business or another investment eligible for an interest deduction at a cost that is effectively the same as ten year term or less over time.

Designed for high-net-worth clients.

Determine insurance needs.

Between the ages of 30-60.

Use after tax dollars to fund a universal life policy up to the maximum premium.

Those looking for low-cost after-tax permanent insurance.

Maximize policy loans after each deposit.

Business owners or individuals with substantial taxable income and liquid assets.

Re-invest the loan proceeds in an investment eligible for interest deductibility

Have good cash flow but require liquidity for outside investment.

Pay off the loan after approximately 15 years and end up with paid up permanent insurance.

Strategy

Your Need

Your Situation

The Solution

Leveraged Corporate Insurance Strategy

To minimize your tax on your corporate savings and investments today and maximize retirement income tomorrow?

Shareholders have a need for supplemental cash flow in retirement

Corporation purchases a universal life policy on the life of the shareholder

RRSP of shareholders is fully utilized

Use the universal life policy as collateral for a series of personal or corporate loans from a bank or other financial institution

Company is retaining and not reinvesting earnings below the small business deduction limit in the business

The loans are paid back from the death benefit with any remaining balance paid to the corporation, tax free

There is an underlying corporate insurance need

Insurance proceeds can be passed to surviving Canadian resident shareholders via the capital dividend account

Age 30-55

There may be remaining capital dividend account room to pass future after-tax earnings tax free to surviving Canadian resident shareholders

Strategy

Your Need

Your Situation

The Solution

Corporate Estate Transfer Strategy

To pass corporate assets to your heirs in the most tax-efficient manner?

Shareholder of a Canadian Controlled Private Corporation (Operating or Holding company)

Use accumulated surpluses to purchase a corporate owned universal life policy

No personal need for assets

Fund policy as quickly as possible to reduce current corporate taxation

Shares earmarked for heirs

At death, the policy’s death benefit is paid to the corporation tax free

Passive income inside corporation taxed at a high corporate rate

The death benefit less the adjusted cost basis to the corporation flows through the capital dividend account to the successor shareholders tax-free

The surplus would be taxed if distributed

Age 40 and up

Canadian resident heirs

Strategy

Your Need

Your Situation

The Solution

Key Person Insurance

To protect your business from financial loss in the event that a key employee – such as a top salesperson, manager, partner, or product developer suddenly dies

Smaller businesses for which success is heavily dependant on a few high-performing individuals

Project the amount of insurance required in case of death of key person

Business feels that a cash injection may help should a key person pass away.

Use a life insurance policies owned by the business with a sufficient benefits to sustain the business in the event of losing a key individual permanently or for a significant period of time.

Life Insured: Age 30 and up

The death benefit less the adjusted cost basis creates a capital dividend account to flow other after-tax assets to the shareholders tax-free (corporate owned businesses only)

To protect your business from financial loss in the event that a key employee – such as a top salesperson, manager, partner, or product developer – contacts a long term critical illness like cancer, heart attack or stroke.

Use a critical illness policy owned by the business with a sufficient benefits to sustain the business in the event of losing a key individual for a significant period of time.

Strategy

Your Need

Your Situation

The Solution

Private Surgery Insurance

To offer a tax free benefit to key employee groups that will provide them with a significant benefit that will enable them to get required surgery for non life threatening accidents and illnesses and return to work much faster than normal.

Any business or partnership that has a few thousand dollars to protect key employees against being off work awaiting surgery for such things as knee replacement or torn ligaments and hernias from accidents. This is a tax free benefit as well as an expense for the company.

Purchase a company owned emergency medical plan that will ensure your key employees get medically necessary surgery in the event of their accident or illness. For example, if they hurt themselves skiing they get the surgery usually within 72 hours.