Life insurance is a powerful tool in your financial tool box. Life insurance provides liquidity when you need it. In case of a sudden death of the main bread winner, the life insurance will be a welcomed payment. Families can be devastated with a unexpected and premature death. This is a huge risk for young families; especially when there is only one income earner.

Life insurance can be critical to an effective estate plan, as well. So, it is not just for young families with children. The life insurance proceeds can pay the tax on death. There is a section in our Income Tax Act that states that all your property is deemed to be disposed of on death. Many clients are unaware of this. Consequently, there could be a large tax bill lying under the sheets of your financial plan that you may not be aware of. This can be a huge tax bill for a business or cottage that has been in the family for many years. Contact a financial advisor at GTA Wealth for assistance with your life insurance needs.

Quick Facts on Life Insurance and Statistics

• Life insurance will provide a lump sum of cash upon the death of the insured.
• Life insurance coverage can be provided for 10 years, 20 years, 30 years etc.  This type of coverage is called term coverage.
• Life insurance coverage can be provided for your life time. This type of coverage is called permanent insurance.  It is usually more expensive than term coverage.

Some statistics are as follows;

• According to the Canadian Cancer Society, one in three Canadians will develop cancer in their lifetime.
• Over 60,000 Canadians will die from cancer this year.

Heart and Stroke Foundation:

• one in four Canadians will suffer from some form of heart disease.
• approximately 75,000 Canadians suffer heart attacks each year.

The above statistics indicate that people do get sick and it does not discriminate on age - young and old can contract an illness.

Key Benefits of GTA Wealth Life Insurance

• Independent advice:  GTA Wealth can access multiple insurance companies to ensure you receive the best solution for your needs.  Our financial advisors do not work for an insurance company; therefore, there is no requirement to patronize only one insurance company.
• Low cost:  The GTA Wealth financial advisor will search for the best value to meet your insurance needs.  Multiple insurance company’s solutions can be reviewed so you get the best value.
• Flexible:  If you are denied coverage from by one insurance company, your GTA Wealth financial advisor can apply to another insurance company.

Cut your life insurance costs!

We offer our clients the ability to protect their family from the financial hardship of premature death. The untimely death of a parent can leave the family in a situation whereby they do not have enough cash flow to live.

Life insurance can provide an income for dependants. Buying life insurance can be complex. We provide trained professional insurance and financial experts to help meet the needs of every individual. They will assist each client to make an informed decision about your life insurance needs.

Why purchase insurance?

The following are a few reasons why an individual would need life insurance:

1. To provide cash/income: Unless an individual has sufficient assets accumulated, a family could be put in an undesirable position if an income earner in the family dies. If a family has sufficient assets to fill the void of the lost income, then insurance will not be required. However, most families are not in this position and will have debts and insufficient assets to provide cash flow to live. In this case, insurance will provide immediate cash to pay outstanding debts and provide an income for the family.
2. To pay taxes: Over the years, a family usually accumulates assets. When an individual dies, assets are deemed to be disposed at fair market value. Therefore, the estate of the deceased individual will be required to pay taxes on the gain of the disposed assets. In certain situations, it will make sense to purchase life insurance to pay the tax bill on the death of an individual. The insurance will provide cash quickly, and the assets of the deceased will not have to be sold to pay the taxes. For example, if the family has a cottage, business etc., these assets will not have to be sold to pay the tax bill. In addition, the beneficiaries may want to keep the assets and not have to sell them to pay the tax bill. The life insurance proceeds will prevent an unwanted sale of family assets.
3. To provide liquidity: If there are multiple beneficiaries to an estate, an even distribution may be difficult. If there is a business, cottage etc., these assets are obviously difficult to divide if they are not sold. Life insurance proceeds will provide cash to distribute more easily than other assets.

Life Insurance

We offer our clients the ability to protect their family from the financial hardship of premature death. The untimely death of a parent can leave the family in a situation whereby they do not have enough cash flow to live. Life insurance can  provide an income for dependants.

Buying life insurance can be complex.  We provide trained professional insurance and financial advisors to help meet the needs of every individual.  They will assist each client to make an informed decision.

Types of Insurance

Term Insurance

Term insurance covers the insured individual for a period of time.  There is no investment component of term insurance; it is strictly insurance coverage.  The term can vary from five years, ten years to 100 years.  The cost (premium) of the insurance is usually inexpensive, and is usually affordable for young families.  There are different types of term insurance.  You can have level term insurance whereby the face amount (value of the insurance coverage) remains the same over the term of the insurance.  You can also have decreasing term insurance whereby the face amount decreases over time.  Banks usually offer this type of insurance when you apply for a mortgage (mortgage insurance).

Permanent Insurance

Permanent insurance usually covers the insured for his/her life or until he/she stops paying the premiums. Permanent insurance can be attractive for someone that would like the policy to be in effect for his/her entire life and/or have the policy paid up at a certain point. In addition, permanent insurance can be useful for someone that wants to protect his/her estate from taxes that will be due upon death. A large tax bill could be present if a cottage or a business has been in the family for many years.The insurance will be available to pay the taxes when the insured dies.

Permanent insurance can have an investment component in addition to the insurance component. The investment is usually tax deferred as long as certain conditions are met. According to the Income Tax Act, there is a maximum that can be contributed to the investment portion of the policy. If the maximum is exceeded, the tax-deferred status is lost. Usually, you should maximize your RSP, RESP, or TFSA before you consider the investment portion of a permanent policy. Holding investments in the insurance policy can provide a tax sheltering option after the aforementioned investment vehicles are maximized. Rather than have investments in non-registered accounts and pay tax each year, a permanent insurance policy could be an option. The insurance policy is also a tax free inter-generational transfer of wealth to the kids in the family. Life insurance proceeds are tax free.

Two types of permanent insurance are whole life and universal life insurance. Whole life policies are limited in the types of investments for the investment component, and the investment options are conservative. A universal life insurance policy provides more options to the individual insured. In addition, upon death, the whole life policy beneficiary will only receive the face amount of the policy; the beneficiary will not receive the investment component that has build up (cash surrender value) over time. Universal policy owners can choose to receive the cash value of their policy in addition to the sum insured on death. However, loans can be taken on the whole life policies based on the cash surrender value that has built up in the whole life plan. Each individual’s situation is unique; so some analysis of your situation would be warranted.

Contact GTA Wealth for all your life insurance needs

GTA Wealth Management works for you not the insurance companies. The GTA Wealth Financial advisors have access to multiple insurance giving them the flexibility to tailor a life insurance policy that is best suited to your needs and give the best value.

Contact or call the GTA Wealth Management Inc. tax accountants and financial advisors toll free at 1 855 GTA WLTH (855 482 9584) for all your life insurance policy requirements. GTA Wealth Management Inc. has three convenient locations in Mississauga, Toronto and Markham to serve you.

Insurance sales are conducted through Allen Wong & Associates (AWA), a Managing General Agency