The average Canadian payed $37,700 in taxes (42.6% of their income) in 2009, compared to 20% in 1999. Many highly tax Canadians approaching their retirement or in their retirement have set aside non-registered investment funds to leave to their children or a favourite charity.
Although it’s unlikely they may need the money, they are still concerned about the safety of the investments. As a result of being in high marginal tax bracket the annual taxes paid on the growth of these non-registered investments can dramatically reduce the value of the total investment. This can potentially reduce the inheritance of their heirs and impact their legacy.
Solution
Whole Life insurance can be used to preserve the value of non-registered assets to ensure the full value is received by your heirs.
By transferring the growth of non-registered investments each year into life insurance, or to pay the premium towards the life insurance policy, you can minimize the amount of overall taxes paid.
A tax advantage with permanent life insurance allows for the accumulation of cash-values inside the policy (within certain legislation limits) without paying income tax on this growth. The death benefit also grows on a tax-free basis and is also paid out to the beneficiaries tax-free upon death.
For more details on how life insurance can be used to minimize taxes, please contact us at 1-866-899-4849 or visit our permanent life insurance Instant Quote Page.
