Insurance Services in Toronto: Life Insurance
We can help you analyze your situation and answer your questions, such as:
Q: How much life insurance do I need?
The answer to this question depends on you - your lifestyle, your responsibilities and your stage of life. After we understand your needs, we can give you an accurate idea of how much life insurance is appropriate. If you'd like a quick estimate of how much life insurance you need, use Life Insurance Calculator.
Q: What is the difference between term life insurance, permanent life insurance, or universal life insurance – which is best for my needs?
Term insurance is designed to provide your family with insurance protection for a specific period of time. If the insured person dies within that time period, his or her beneficiaries will receive a tax-free insurance benefit.
For many young people or families just starting out, term life insurance is a logical choice. Initially, term insurance costs less than permanent insurance. Generally speaking, the younger you are, the less it costs.
Families with small children use term insurance to protect themselves during those crucial years when children are dependent. With insurance coverage, you have peace of mind knowing that if anything happens to you, debts would be paid and the
Permanent Life Insurance
Permanent life insurance is designed to provide insurance protection for the entire lifetime of the insured person. Many people appreciate this kind of security. If the insured person dies, his or her beneficiaries will receive the tax-free insurance benefit.
Permanent life insurance is initially more costly than term life insurance. However, in the long run, it is often the more cost-effective decision.
Universal Life Insurance
Universal life insurance combines permanent life insurance protection with flexible investment options, customized to your financial needs. Depending on the universal life insurance product you've chosen, you may have a number of investment options that can allow for tax sheltered growth of your money. We will help make sure your investment option meets your financial goals and that you are comfortable with the degree of risk. At the same time, you have peace of mind knowing that your family's future is protected by insurance.
Universal life insurance works like this. A portion of your premium is deposited into your tax-sheltered investment accounts. You can choose to invest in interest-bearing accounts that offer a fixed rate of return, or you can choose an account that fluctuates in relation to market performance. The cost of life insurance and a small administration charge are generally deducted from your account on a monthly basis. The growth within the policy is sheltered from taxation.
Universal life insurance coverage is exceptionally flexible. Along with help from your broker, you can choose the amount of life insurance you need, as well as some optional types of coverage to provide a benefit to you during your lifetime. Your premiums can also be structured to suit your budget and future plans.
As the investment component for your policy grows, universal life insurance can also give you access to cash within the policy during your lifetime. You can withdraw cash from the plan, or borrow money using the policy's cash surrender value as collateral.
Q: Why do I need life insurance?
Life insurance helps guarantee a secure future for people close to you-loved ones who depend on you. Life insurance can also be a useful financial tool during your lifetime. You can use it for cash withdrawals, collateral for loans, retirement income, or to finance tuition costs for your children. The decision to buy life insurance depends on your responsibilities and your financial needs for the future.
Q: Can I use life insurance to pay estate taxes when my business, cottage or income property are passed on to my children and heirs?
Yes, not only is it possible, it's the cornerstone of effective estate planning. When your estate passes to your heirs, it is - with the exception of your principal residence - treated by Revenue Canada as income in their hands. Your heirs may have to borrow money or sell off part of the estate to pay the tax; in the end, your heirs could see almost no benefit from your hard work and generosity. Estate planning is one of the main reasons for buying permanent or whole life insurance. When your estate passes to your heirs, the insurance pays the taxes and your heirs won't need to sell their inheritance or take out a loan.
Contact us if you would like more information regarding our universal life products.