Life Insurance - Integrated FS

Life insurance is a financial tool that protects your family and loved ones from the financial impact of a premature death.

Life insurance has evolved and is also used for investment and estate planning purposes. We offer a broad selection of term, and permanent life insurance products to meet your needs.

How much life insurance do I need?

Why do I need Life Insurance?

You are engaged or married.
You have children and/or other dependents.
To protect against permanent problems like taxes and estate planning.
You have a mortgage and/or other types of debt.
You are looking for an efficient way to tax-shelter excess funds within your Professional Corporation or Holding Company.
To transfer wealth to the next generation in a tax-efficient manner.
To use as a strategy for investment or retirement planning.
To fund the provisions of your business’ Buy-Sell Agreement.
To provide cash-flow to your business in the event a Key Person dies.

What are the different types of Life Insurance?

There are two main types of life insurance, Term Life Insurance and Permanent Life Insurance. Within Permanent Life Insurance, there is Whole Life Insurance and Universal Life Insurance.

Depending on your age, life stage and needs, you may need a mix of Term and Permanent Life Insurance.

Term Life Insurance	Permanent Life Insurance
Fixed amount of coverage for a defined period of time (term). Premiums increase every 10, 20, or 30 years, depending on the term chosen. Inexpensive to start & easy to understand. Solves temporary problems like eliminating debt & replacing income. Can be converted, in whole or in part, to permanent life insurance without a medical. Coverage expires prior to life expectancy. Dramatic increase in premiums at renewal, making the coverage unaffordable over time. No cash value. Not eligible to receive policyholder dividends.	Provides coverage for life. Premiums never increase. Premiums can be fixed for the duration of the contract or paid up over a shorter time period. Solves permanent problems like tax and estate. Commonly used for supplementing retirement income, tax-efficient wealth accumulation, and philanthropic planning. Death benefit and cash value grow over time. Cash value accumulates in a tax-efficient manner. Cash value can be accessed while in a tax-efficient manner while you are alive.

Term Life Insurance

Permanent Life Insurance

Fixed amount of coverage for a defined period of time (term).
Premiums increase every 10, 20, or 30 years, depending on the term chosen.
Inexpensive to start & easy to understand.
Solves temporary problems like eliminating debt & replacing income.
Can be converted, in whole or in part, to permanent life insurance without a medical.
Coverage expires prior to life expectancy.
Dramatic increase in premiums at renewal, making the coverage unaffordable over time.
No cash value.
Not eligible to receive policyholder dividends.

Provides coverage for life.
Premiums never increase.
Premiums can be fixed for the duration of the contract or paid up over a shorter time period.
Solves permanent problems like tax and estate.
Commonly used for supplementing retirement income, tax-efficient wealth accumulation, and philanthropic planning.
Death benefit and cash value grow over time.
Cash value accumulates in a tax-efficient manner.
Cash value can be accessed while in a tax-efficient manner while you are alive.

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Term Life Insurance

Term life insurance is a simple and flexible solution that protects against temporary problems such as debt elimination and replacing income for your family.

Inexpensive to start and easy to understand.
Efficiently provides a large amount of coverage for a defined period of time.
Premiums increase every 10, 20 or 30 years, depending on the term chosen.
Can be converted, in whole or in part, to permanent life insurance without a medical up to a specified age.
It expires prior to life expectancy.
It becomes prohibitively expensive over time because premiums increase at each term renewal (e.g year 21 on a 20-year term policy).
It has no cash value and is not eligible to receive policyholder dividends.
There is no flexibility to change or skip premium payments.

Permanent Life Insurance:

Participating Whole Life Insurance

Participating (PAR) Whole Life insurance is a type of permanent life insurance that provides lifetime coverage. PAR Whole Life insurance is a unique asset that combines permanent life insurance protection with a tax-advantaged investment component.

Guaranteed premiums, cash values, and death benefit.
Policyholders are eligible to receive dividends annually based upon the experience of the insurance company’s participating account.
Policyholder dividends vest immediately upon receipt and cannot decrease in value.
Cash value and death benefit growth (in excess of the guarantees) when policyholder dividends are received.
Ability to access the cash value in your policy in a tax-efficient manner while you are alive.
Low maintenance for the policy owner.

The premiums for PAR Whole Life policies are deposited into an account called a participating account. The insurance company manages this account and invests these premiums on behalf of policy holders. If the actual performance of the PAR account is better than the underlying assumptions made by the insurance company, the surplus is paid out to policy holders in the form of policyholder dividends.

A PAR whole life policy is currently classified by the Canada Revenue Agency (CRA) as an exempt life insurance policy for taxation purposes. As such, there is no income tax on accumulating policy reserves, the assignment of a policy to a bank as collateral for a loan is not a disposition for income tax purposes, and loans received by the policy owner may be tax-free.

Universal Life Insurance

Universal Life insurance is a type of permanent life insurance. It provides lifetime coverage with built-in flexibility.

Unbundled product containing a separate insurance and investment component.
Ability to invest in a tax-sheltered investment account.
Multiple investment choices available from fixed income to equities, or a combination thereof.
Flexible premium payments and ability to overfund the policy.
Ability to access the cash value in your policy in a tax-efficient manner while you are alive.
Premiums do not increase when purchased using a level premium structure.

Universal Life provides the traditional protection offered by life insurance, as well as the ability to invest in a tax-sheltered investment account. This type of coverage normally has guaranteed mortality costs, policy and investment expenses.

According to the Canada Revenue Agency, a Universal Life insurance policy is tax-exempt if it passes the annual exempt testing process. There is no income tax on accumulating policy reserves, the assignment of a policy to a bank as collateral for a loan is not a disposition for income tax purposes, and loans received by the policy owner may be tax-free.