Most of us appreciate the role that taxes play in our lives and society, but as with any money we spend, we like to be cautious to make sure we’re not spending too much. For anyone who has sat down in a meeting with me, you know how excited I get about the amazing advantages that come with permanent life insurance policies. They are financial vehicles that help with accumulating assets, preserving assets,and transferring assets in an extremely tax efficient manner.
Despite proposed changes to corporate taxation and changes that just passed at the beginning of 2016 with respect to certain provisions of permanent life insurance, these policies still continue to make a lot of sense!
Another way in which permanent life insurance can help you accomplish both financial goals and dreams of a legacy is through charitable donation. This fantastic article (CLICK HERE) written by Mark Halpern does a great job of explaining your options. In the end, the life insurance ends up with the charity, creating a much larger donation than could potentially have been possible in your lifetime, and you or your estate can realize a substantial tax benefit with the donation tax credit. Even better, you can use your Canada Pension Plan income to fund it…assuming you don’t need it for your own retirement.
Your family’s estate will be larger due to the reduced taxes, your charitable donation will be larger because of the efficiencies of funding life insurance, and the CRA…well it gets something, just not as much as it could have. That’s something to get excited about!