YES LIFE INSURANCE!

If you happen to have high value cash value Life Insurance, these policies can be used as collateral to finance a loan. Assuming it equals the lending bank’s minimums, you can arrange to have regular loans against these policy values and the income distributed is tax free. Bank’s consider Cash Value Insurance Policies as a very reliable asset to lend money against.

The process requires that the Life Insurance policy is assigned to the bank and the policy must continue to be maintained. The loan value accumulates against the increasing cash value of the insurance policy. Upon the Insured’s death, the loan is surrendered from the death benefits and the net remaining value is paid out to your beneficiaries.

Alternatively, this same insurance policy can be used to increase the payments from Registered Investments such as RIF’s, LIF’s, other non-registered investments, with the idea of maximizing the income with little regard for their future estate value. The Insurance Policy upon your death would replenish the estate with tax free cash.

In regard to Registered Savings Products, from an Estate Asset position these are terrible investments. The tax rate upon death of the last of you and your spouse, will be taxed at the top marginal tax rate. Worst case 54%. Further these are assets which are included in Probate…attracting more fees/tax. Perhaps another 1.5%. With a Life Insurance policy in place for all or the projected net after tax value of your Registered Assets, you could develop strategies to increase the lifetime income from these assets and thus enjoy your savings more fully. Upon death the Life Insurance pays out tax free and if the proceeds are paid directly to your heirs/beneficiaries and not through your Last Will and Testament, these proceeds are paid without Probate.

Immediate Funding Arrangements:

If you have substantial amounts of money in a GIC, Life insurance may be a very compelling option for these deposits. Simply, we use the GIC money to buy an insurance policy. Simultaneously, we also arrange a loan against this same Insurance Policy. Banks consider Life Insurance to be a very stable and effective asset accumulation vehicle. Organized properly, your money goes into the insurance policy and is immediately lent out by the bank. Not only do you have use of the money, you also have a tax deductible interest charge available to offset the tax on this money reinvested for your growth and well-being.

Life Insurance isn’t something that the average investment advisor or financial planner recommends. In some ways it is non-traditional asset. However, structured properly, we can un-lock assets, enhance your estate, materially increase income or minimize the impact of taxation and fees upon you and your families net worth.

Perhaps now is the time to speak with a qualified professional.

May we invite you to give us your contact information so that we may continue the conversation.