Individual Life insurance Overview

 

We prefer to think of ourselves as invincible. Therefore, thought of Life Insurance does not cross one’s mind often. However, if you have loves ones who depend on your income, you should seriously consider getting personal life insurance. Individual life insurance policies can be very simple or quote complicated, depending on your needs. For example, young couple buying their first home may only need a simple Term insurance for the duration and amount of mortgage. Family with kids will need to consider long-term protection to ensure that the surviving spouses’ and children’s lifestyle is not compromised by the loss of one spouse. Retiring couple will need a product that will address estate planning needs. Business owner can utilize life insurance to safeguard operations against the loss of business partner. Those who already maximize other tax-efficient investment options, individual life insurance policy will be a great addition to their portfolio. Multiple cash value generation options and favourable tax treatment of income allow to structure an appealing investment policy. Most common types of life insurance are Term and Permanent policies. The main difference lies in the length of coverage. One shall also consider an opportunity to accumulate and access cash value, like in Whole or Universal Life Permanent policy.

There are many ways to use life insurance policies, as demonstrated by the chart below. Any insurance purchase is an important decision, one that involves long term planning and thorough understanding of your needs and product options. We have a team of professionals with decades of experience who can answer all your individual insurance questions. Let us show you the path to secure future for you and your beloved!

 

 

Individual Life insurance overview | Finkelstein Financial Services

 

Individual life insurance rates will vary based on product of choice, person’s age and health. To ensure that you receive the best value, contact us today for the free personal life insurance quote.

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Life Insurance for Self Employed

Life Insurance for self employed designed to protect your family and business in case of your passing

According to May 2018 survey about 15% of Canadian workforce is self employed. There are a lot of advantages to being self-employed. But creating safety net for you and your family is one big disadvantage compared to the benefits offered by employment with big companies.

Life Insurance for self-employed designed to protect your family and business in case of your passing. If your self-operated business owes money to a creditor, that debt would be passed on to your beneficiary who inherits the business in the event of your death. Getting a payout from a life insurance policy would give your beneficiary the ability to clear out your debts. They can then either continue to operate or sell the business without any further hassles.

Our expert team will create custom plan for you and your business. Contact us for a free preliminary assessment.

Life Insurance Taxation

Life Insurance Tax benefit is 2-fold:

  • First is in deferred taxation of investment growth

If you purchase insurance product with investment component, like Whole Life or Universal Life, the growth of your money inside the policy is tax free. It is only subject to taxation upon withdrawal.

  • 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.

Life Insurance as an Investment

There are many arguments in favour of using Life Insurance as investment. At Finkelstein Financial, we assess each individual client’s financial situation in full before recommending type of insurance. Permanent Life Insurance is an investment product by nature, because unlike Term Policy, Permanent Life Insurance is guaranteed to pay out as it cover you until death.

Read moreLife Insurance as an Investment

Life Insurance for Seniors

If you are in retirement age and think that it is too late for insurance, think again. Over 50 life insurance exists. You can still use insurance to leave lasting legacy or funeral funds. Many insurance companies offer products with an issue age up to 85 y.o. The discrepancies in the amount you pay as a premium are much larger for seniors than for younger applicants.

The small print in policies is becoming more important with age as well. It is important to trust your search to an experienced independent insurance provider in Canada. Our team has over 30 years of experience, and will be happy to find you the right fit in the sea of life insurance product offerings. 

What is to look out for when considering life insurance for seniors?

Insurability

Whether you are eligible depends on an initial screening process that considers factors like health, age, gender and history of prior claims. If you are unsure if you qualify, find out what information is needed by asking broker to submitting a preliminary inquiry.

There is a variety of guaranteed issue products on the market that don’t require medical exams. However, that doesn’t always mean they will cover pre-existing conditions. One should be extra diligent when considering the non-medical insurance, because some of them will have limited coverage and specific death benefit exclusions.

Policy purpose

The end goal of insurance will largely determine the amount of death benefit, the type of product you should choose and premiums you will pay. If you are looking to leave a little money to cover funeral expenses you can consider term to perm option and save some money upfront. Note that insurance companies will have different minimum benefit limitations: some may be only $10,000 where others $50,000. With term to perm option you should be careful to consider the maximum age for conversion, it usually varies from 69 to 85.

If estate planning is your goal, permanent (universal or whole life) policy will be more suitable. They will allocate portion of your premium to tax-deferred investment account and can produce significant return, depending on the amount you put in, product type and investment portfolio. When considering permanent life insurance for elderly we would advise guaranteed premium products that protect you from rising premiums as cost of insurance goes up with age. One of the benefits of choosing permanent life insurance is that it gives you an edge over inflation, insuring that the value of a nest you wish to leave for your heirs won’t be eradicated. Keep in mind that regardless of the type of insurance product death benefit goes to the beneficiary/ies directly, outside of the estate and therefore it is not subjected to estate taxes.

Deferred payout

If you are looking into life insurance for estate planning, check out “last to die” policies. These policies offer much lower premiums as the death benefit is paid out on the passing of the second spouse.

Cash options

Policy options allowing to withdraw a portion of policy’s value or take a loan against it are important for seniors to consider. Some policies will also have living benefits addons allowing for withdrawals in case of disability or critical illness.

For seniors at risk of health complications these are crucial. These riders can be used to cover treatments, medical care, and assisted living: costs that would normally be a heavy burden on the insured or their family. Keep in mind that any withdrawals during the life of insured will reduce the total death benefit.

There is plenty details to consider when purchasing life insurance, especially life insurance for elderly. Contact our expert team for a free consultation and quote.

Life Insurance that is right for my family

You are reading this post because you have a family and considering life insurance to protect them financially in case of your (or spouse’s) death. And rightfully so. If you have anyone depending on you financially and affected by your debt you should protect them with family life insurance.

The day that you die, your contribution to family income stops, but your dependants will still have to pay the same bills. Life insurance should replace your income in the household budget for as long as your family needs it to. 

Different families in different stages of life command different life insurance strategy

For example, a young family will need to consider amount of mortgage owing, childcare expenses, future college fund and forecast for other child-related expenses. Young family is also more likely to have higher debt and smaller savings. The amount of insurance required will be higher than for an elderly empty-nest couple with significant savings.

Family with some savings or secondary property may offset some costs related to death of one of income earners and therefore reduce the amount of life insurance needed.

There are few major types of family life insurance plans:

Term, Universal and Whole Life Insurance. You can read more about each in our other posts by clicking on the name of each product type. Which life insurance for family to choose will depend on your specific needs and wants. Use the free life insurance calculator on our website (link) to estimate the amount of coverage you need. Don’t feel bad if estimated premiums are over your budget. Buying less coverage is always better than buying none.

Contact our expert team to receive free consultation about the life insurance best suitable for your family and budget in mind.