Can You Afford To Die?
Tax-Free death benefits
Have you ever wondered why the death benefit on a life insurance policy is tax-free?
Even Canada Revenue Agency realizes that with all the taxes we pay, it cannot directly tax you on the after-tax dollars you get as an income. Life insurance policy premiums are paid with AFTER tax dollars. The premiums paid can not be claimed as a deductible expense. Accordingly, the death benefit from a life insurance policy has to be tax-free.
This tax-free death benefit can cover immediate and ongoing expenses such as funeral costs, mortgages and loans, or provide family members with a continuing income.
Don’t be confused by life insurance. There are only 2 basic types of policies: permanent (whole life) and term (temporary).
Term Insurance is the least expensive form of life insurance and provides protection for specific time—frames eg. 10 or 20 year terms. They may be renewed for additional terms or converted to permanent life insurance plans.
Permanent Life insurance comes in many different combinations. In addition, it is also can be used as an effective investment vehicle. This is because your cash deposits grow on a tax-deferred basis within the investment options you choose.
If you want complete flexibility and a host of optional benefits, Universal Life is often the best choice. There is a great deal of flexibility with regards to premium payment schedules, policy and protection options, bonus plans and optional benefits. They generally contain a diverse selection of tax-advantaged investments, even if the insurance protection is not necessarily needed. The different combinations of features make each be personalized to accomplish your long term goals. Term 100 combines term insurance, with the permanent protection and some tax-deferred savings benefits of Universal Life.
Every company is a little different in terms of what it offers, the costs, and the rules that govern them. It is important that you have a clear understanding of your needs so that you can make the choice that is right for you.
It is important to arrange life insurance protection with an independent, qualified and properly trained insurance professional. Your personal needs must be carefully analyzed, and a comprehensive comparison done to find the best policies and plan for you.
Lynette Latinsky
Latinsky Financial Services
30 Centurian Drive, Suite 109, Markham, Ontario. L3R 8B8
(416) 417-3224 direct
lynette.finance@sympatico.ca
