- To provide security for your family in case of loss.
Many families today rely on the incomes of two adults to meet the family’s financial goals, so the loss of an income earner to a family can be financially catastrophic. PIB can help you understand the amount of insurance each wage-earner should invest in to best protect the financial future of your family.
- To ensure your family can remain in the family home.
No one wants their family to be forced into selling the family home in order to raise cash for covering expenses. Life insurance which pays off your home mortgage in the event of death of one of the homeowners is one of the easiest ways to protect your family.
- To assist in retiring debt.
Tax free life insurance proceeds can be a cost effective and tax effective means of retiring personal and corporate debt. Upon death, RRSP accounts become fully taxable to the deceased’s estate, and capital gains taxes may be incurred on other investments. If no funds are readily available to cover these costs executors risk having to liquidate assets at unfavorable current market prices or may be forced to borrow in order to raise capital. Tax free life insurance proceeds offer an economical method of offsetting taxes owing on an RRSP account and of paying capital gains taxes.
- To cover “last expenses” incurred upon death.
Funeral costs, medical expenses, legal fees and probate fees are all incurred once a death occurs. You can ensure your heirs are not burdened by an overwhelming financial obligation by ensuring you are adequately covered by life insurance.
- To protect the ownership and control of a business.
On the death of a business partner or shareholder, life insurance proceeds can be used to buy the deceased partner’s interest or the deceased shareholder’s shares from the deceased’s estate. This allows the surviving partner(s) or shareholder(s) the ownership and control of the business.
- To provide funds to assist in replacing a deceased key employee.
Often the success of a company is attributable to one or certain individuals. The death of a key person can result in financial hardship for a business in the form of lost sales or sale opportunities as well as loss of confidence by lending institutions, suppliers, and shareholders. Replacing a key person in your business can be expensive. The tax free proceeds of a key person life insurance policy can help offset those costs and losses incurred.
- To assist with your retirement savings plans.
Permanent Life Insurance provides the added convenience of a savings or investment vehicle. The cash value of the policy can be drawn upon to supplement retirement savings.
- To provide a legacy.
Many people wish to leave a donation to a favourite charity. Tax free life insurance proceeds are an effective method of doing so. As well, you may be able to use part of the life insurance premium as an annual tax deduction. Check with one of the PIB Life and Living Benefits Account Executives for details.