“Cascading” life insurance

Illustration  Ted Bongiovanni

Tim Cestnick, a well-known author and tax commentator has written a very informative article for the Globe and Mail on “cascading life insurance.” He explains that buying life insurance on the life of your children can actually make sense. As he points out, this strategy takes advantage of the fact that you can invest money inside a universal life insurance policy on a tax-sheltered basis. The death benefit, he continues, along with the accumulated investments in the policy, are all paid out tax-free to the beneficiaries when the insured dies.

I encourage you to read this excellent article and learn how to transfer assets to the next generation without giving up control during your lifetime, and eliminate current taxes in your hands on the money deposited into the policy.

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