Life Insurance Needs
Family Protection Needs
Life insurance is the basic tool for providing family financial protection for the unexpected. When you plan for the future, you and your family will normally count on a continued income to maintain lifestyle. Life insurance can help preserve and protect your lifestyle upon the death of a family member. Some of the basic needs which normally arise upon a person's death are:
Funeral & Final Expenses - Estimates vary from $5,000 to $10,000 and up. It will include cash for emergencies, probate fees and legal fees.
Mortgage or Rent - Where would your family live? Surviving family members have to live somewhere.
Education Costs - Education costs are currently running as much as $5,000 per year for just tuition costs and up to $12,000 per year and more for students attending University/college away from home.
Survivors' Income - Income is required to maintain lifestyle.
Business Needs
Funding for Buy and Sell Agreements - Life insurance can be used to guarantee surviving shareholders that they will have sufficient funds to purchase the deceased's shares. It provides a guarantee to the deceased's heirs that they will be able to obtain full value for the deceased's business interest.
Creation of Equitable Distributions for Farm/Business Families - Life insurance can be used as a source of funds to ensure a viable farm operation is passed on to the next generation while providing sufficient cash resources to the surviving spouse and an equitable distribution of estate assets to non-farming business.
Funding for Estate Planning - Life insurance can be a logical source of funds to provide cash at death to meet estate obligations such as taxes on capital gains, taxes on recapture of depreciation, taxes on RRSP's and RRIF's where there is no spouse beneficiary as well as legal fees, probate and executors fees.
Key Person Protection - Business owners cannot guarantee the continued health of their key employees. Through Key Person insurance, however, they can prevent an unexpected death from financially harming or destroying the business that they helped to build.
Collateral Insurance - The net cost of pure insurance owned by an individual or corporation to secure a loan can, within certain parameters, be deducted as a business expense.
Special Needs
Bequests to Charities - Individuals who wish to benefit a charity using life insurance may do so and obtain a tax credit for premiums paid or a tax credit at death for the death benefit passing via the will to a charity.
Maximization of your retirement income - It is possible for individuals to maximize their pensions or retirement income while protecting their spouse by using permanent life insurance to replace the pension/retirement income which terminates at death.
Financial Impact of Surviving a Critical Illness - It is possible to mitigate the financial impact of surviving a critical illness through a special form of insurance known as critical illness coverage. One in three Canadians will develop some form of life threatening cancer. One in 20 Canadians run the risk of having a stroke before age 70. One in 4 Canadians will contract some form of heart disease. Canada has one of the highest rates of multiple sclerosis in the world. With today's advances in medical science and technology, the chances of surviving a critical illness are better than ever… but often at a high financial cost. The recovery from a life threatening illness may take months, even years… cutting into savings and severely affecting lifestyle and retirement plans.