When we think of investment, we usually think of stocks, bonds and GICs. But permanent life insurance such as a whole life or universal life insurance policy that stays in place for a client's lifetime – not only provides ongoing life insurance protection: it can produce better rates of return than more traditional, conservative purchases like GICs or government bonds.
Preferential tax treatment is the key. Once a client has maximized their saving opportunities (through RRSPs and TFSAs) there are limited options for tax deferral or tax savings. But if they have enough savings to finance their retirement income needs – and are looking to protect and maximize their estate's value while minimizing tax – a permanent insurance policy can potentially provide significant benefits.
Namely:
- A tax-free death benefit
- Tax-preferred cash value growth of the policy
- Possible avoidance of estate settlement costs such as probate fees.
For clients looking for a tax-effective alternative to a low-risk bond portfolio, permanent insurance is an option worth considering.
Call us today to discuss your retirement plans. We have some exciting ideas that can help you meet your goals.
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