Income Shelter

Universal Life has become a vital tool in tax planning strategies. In addition to providing liquidity with tax-free death benefits, Universal Life also offers tax deferred accumulation with a wide array of investment options. Preferred tax treatment and flexibility allow for income sheltering and retirement augmentation.

Upon the death of the last spouse capital gains become taxable and payable for the taxation year.

Growth above the adjusted cost base of a non-registered investment such as: stock and bond portfolios, revenue and / or recreational properties, business interests, as well as, personal properties intended as investments all become taxable at the capital gains rate.

Offsetting gains and preserving the estate can be obtained at a fraction of the cost by the purchase of Life Insurance Plans.

The taxation of RRSP's / RRIF's at death is a significant concern for most Canadians. RRSP's and RRIF's can be rolled to a spouse upon death without tax, however, if single or widowed they become taxable as income in the year of death. Up to almost half of the asset can be lost to tax. The use of Joint Last-to-Die Life Insurance Plans to protect this loss is a very popular and economical solution. Term to 100, Universal Life, or Whole Life is recommended for their permanent coverage features.

Whether using Life Insurance Plans to preserve your estate or strategically shifting money into a plan for sheltering purposes, the benefit of tax-free death proceeds should not be overlooked. These proceeds can be passed tax-free to a named beneficiary such as a dependant, relative, charity or church.

Significant portions of income tax, probate fees, and settlement expenses can all be avoided.