Life Insurance is a financial tool whose purpose is to replace income that is lost when a wage earner dies, pay off debts, fund buy sell agreements, and provide for lost income if a key person dies.
We also review your personal insurance needs to ensure that your family survives financially in the event of your death, your taxes are paid, educational needs are funded and survivors are taken care of.
Life Insurance can also be an effective estate planning tool to transfer wealth to the next generation as tax efficiently as possible, and a means to supplement retirement income.
Our life insurance products include:
Term insurance is used to cover temporary needs, such as debt and the dependency period of your children. When you are younger, your debts are usually higher and your children have many years before they become independent. With term insurance, you are able to purchase a significant amount of coverage for a low cost and the premiums are level for the length of your term. Typically term insurance has the following attributes:
- Policy is guaranteed not to be cancelled or modified by the insurance company
- Most products are designed to expire by age 80 or 85
- Premiums increase at the end of each term
- No “bells and whistles” with these types of policies; no cash value, dividends, or premium flexibility
- Ability to convert term coverage to permanent without evidence of health
Permanent life insurance is initially more expensive than term insurance, but the premiums are guaranteed not to increase and the coverage does not expire. Term 100 is the most basic type of permanent insurance.
- Coverage remains in force for life and the premiums never increase
- Policies can have a cash value associated with them and can have a short premium payment or can be payable for life
Universal Life insurance is a permanent life insurance policy, typically in force for life. Universal life is very flexible, and can be tailored to suit your individual needs.
- Insurance component and investment component
- Flexible premium payments up to a maximum
- Investment income is earned tax sheltered
- Multiple investment options available, with or without guarantees
- Investment account becomes part of your death benefit and is paid tax free to your beneficiaries upon death
- Various strategies to allow you to access your investment account in a tax effective manner while you are living
- You can also choose to overfund your policy to build equity
- Tax free death benefit
Participating Whole Life insurance is a permanent life insurance policy, where the premiums remain level and the policy does not expire. The premiums for participating whole life policies are invested by the insurance company in the participating account with surplus paid as dividends to enhance the cash and death benefits.
- Policies contain a guaranteed cash value which grows with the payment of dividends
- There are several options for how the dividends are received (additional permanent insurance, additional term insurance, cash, reduction of premium, or accumulation of cash in the policy)
- Dividend payments are not guaranteed, are subject to fluctuation, but are automatically vested once received and cannot be revoked
- Participating policies require minimal management as there are no premium or investment decisions to be made by the policy holder
Having your mortgage paid off in the event that you or your spouse dies relieves a lot of the financial burden faced by the survivor and banks make the process easy by allowing you to purchase coverage simply by signing a one page application. But are you really protected by this coverage?
Using term insurance to cover mortgage and other debt is cost efficient. Term insurance rates are typically much lower than what is available through group creditor insurance.
We work with you and your other professional advisors to develop strategies for succession that include buy sell agreements, life insurance, and debt financing
Key Person Insurance
Key person insurance is designed to protect your business in the event that a key member of your team passes away or becomes disabled. If this were to happen, your bottom line may suffer in the short term, or possibly over the long term if you have to find a replacement.
Key person insurance pays a tax-free benefit that could allow you to:
- Recruit, hire and train a replacement
- Pay off debts
- Distribute money to investors
- Ease the fear of creditors
- Reassure clients, employees and investors that the business will continue operating