Permanent Life Insurance… an effective estate transferring strategy

Robert Luft

September 17, 2018

Do you have a non-registered investment portfolio that you would ultimately like to pass on to family/ beneficiary(ies) upon your demise? Do you want to ensure that this money is transferred to your beneficiary(ies) in a tax efficient manner? Do you also want to ensure that you never lose control of this money while you are alive?

If you answered “yes” to any of these questions, then you should consider looking into permanent life insurance.

One strategy used to get all of the aforementioned accomplished, would be to spend 1-2% of the value of your nonregistered investment portfolio every year to fund a permanent life insurance policy. This policy will provide a lump-sum tax-free benefit to your beneficiary(ies) outside of your Estate, which means that it cannot be contested. As this policy will not be included in your estate, it will also be paid out to your beneficiary(ies) before your estate will ever be settled. By using funds from a fully taxable portfolio to fund a tax-free insurance policy, you can effectively reduce the amount of tax that your estate would otherwise owe.

Contact Jon Glougie if you would like to learn more about this strategy or to discuss any aspect of your insurance, estate or risk needs.