You and your legacy – putting new life into your life insurance.

Did you know that life insurance can breathe new life into your estate by helping to ensure your legacy lives on exactly as you wish? It can also provide the peace of mind that comes with confidence that your heirs will have the resources to live the life you want for them. Here’s how …

Let’s start with estate planning:  It’s important because it ensures that your legacy will be transferred to the heirs you choose in the most effective way.  Without an estate plan, your assets may not be distributed as you wish and fees and taxes may reduce the value of your estate.

Life insurance can play a significant role in your estate plan because it can help you reach a number of important legacy objectives by providing:

1. A source of funds available to pay off estate liabilities such as probate fees and mortgages or any capital gains taxes – ensuring that a cottage, business or other assets do not have to be sold to cover these costs and can be left intact to your beneficiaries.

2. A source of funds to generate an ongoing income for an heir (or heirs) you wish to support – perhaps a spouse, a child who is still in school, a child with special needs or even an ageing parent who outlives you.

3. A way to ensure estate fairness – for example, you may wish to leave the cottage or your farm or business to one child and use the proceeds of your life insurance policy to provide a suitable amount for another child.

4. A donation to the charity of your choice that is tax-free to the charity and can be tax-advantageous to you while you live and/or to your estate. 

5. A way to pay for business succession requirements – such as legal and financial obligations under a shareholder or buy/sell agreement.

In most cases, your life insurance premiums are not tax deductible, but the benefits of your policy usually flow tax-free to your estate or named beneficiaries. 

There are two basic types of life insurance:  Term and Permanent.  Within these basic categories are many types of plans – some like Universal Life or Whole Life that can actually provide tax-advantaged death benefits to your beneficiaries while allowing you to build a tax-sheltered investment fund that is readily accessible to you should you need it during your lifetime.  What you need is dependent on whatever your unique goals are for your estate.  A financial advisor can help you make the right choices for your life.

For more information contact Kevin J. Zakus @ (250) 768-4546 or Email.

This column, written and published by Investors Group Financial Services Inc., is presented as a general source of information only and is not intended as a solicitation to buy or sell investments, nor is it intended to provide professional advice including, without limitation, investment, financial, legal, accounting or tax advice.