Life Insurance Tax benefit is 2-fold:
- First is in deferred taxation of investment growth
- Second benefit is in tax-free distribution upon death of insured
Your beneficiaries receive proceeds free of tax, outside of estate probate procedures. More on Life Insurance as investment.
Life Insurance Taxation is attractive to individuals who are already taking full advantage of other tax-deferred accounts like RRSP and TFSA. Especially those looking to protect their beneficiaries from the burden of estate taxes and fees. Consider the situation when your surviving spouse has to sell house full of memories to cover the estate tax on that house that was triggered upon your death. Or kids having to sell family business to pay estate tax on it. There are different financial strategies to ensure that most of the results of your life’s work go directly to your beneficiaries, and Life Insurance should be one of the valuable tools in your legacy planning. To read about Estate planning and Life Insurance.
To learn more about preferable taxation of Life Insurance, contact our expert team.