Eventually, all of us will have to have our estate settled. Whether small or large, there is planning that needs to take place for your estate. Life insurance can play an essential part in your planning process and life plans.
Life insurance planning is a critical component of a well-crafted estate plan. Before you get a life insurance quote, make sure your insurance strategies match your life plans.
Participating Life Insurance
Are you in the process of estate planning and are looking into life insurance plans? At this point, you may know that you want to purchase permanent life insurance over a term life insurance policy. Permanent life insurance covers you for the rest of your life. A participating life insurance policy is a type of permanent coverage that has profit-sharing opportunities.
Term Life Insurance
Life insurance comes in many forms. A term life insurance policy can play an important role in your life, both in the early stages while building your financial security and later in life when you are planning for your estate.
Universal Life Insurance
You may find yourself scratching your head at all the different life insurance companies and plans out there. From term to permanent, you may not be sure what is right for you. Universal life insurance is a type of permanent insurance, meaning you will receive protection for the rest of your life.
Whole Life Insurance
Let’s face it, we all know that no one will live forever; however, what we don’t know is when that day will come. Regardless of your current stage in life, life insurance can help protect your family if you die.
No one wants to think about it, but if your employees are involved in an accident that results in their death or dismemberment, it can be devastating to their families and your business.
Frequently Asked Questions
What is Life Insurance?
Life insurance is a type of insurance that pays your beneficiaries a lump sum payment after your death. A key characteristic of life insurance plans is that they create quick liquidity in your estate upon your death. The insurance proceeds flow directly outside of your Will or probate to your named beneficiary.
What can the life insurance payout be spent on?
Your beneficiaries have no restrictions on how they choose to spend the money paid out by your life insurance plan. However, your estate may have a certain amount of tax due in the year of your death. For example, common assets that may incur a terminal tax bill include capital gains, unspent RRSPs, or business interests. Your beneficiaries can use these funds to pay these bills. Additionally, you can use your life insurance to reach philanthropic goals to help your community.
How can life insurance be used for equalization in my family?
Often it isn't easy to equalize the distribution of your assets across all family members or beneficiaries. For example, if you have three adult children and one of whom wants to retain the family cottage, you may be wondering how to equalize this for your other two children. You can use a life insurance policy to pay taxes on the gains of the cottage and provide capital to equalize your other two children who are not wanting the cottage. Your policy can also use this strategy if you own a family business and not all your children are involved.
Let's solve this puzzle together.
If you are looking to get life insurance or want to review your current plans, meet with an estate advisor.