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What evidence proves that life insurance is worthwhile?

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Life insurance has unlimited tactical financial uses.

Life Insurance includes cash benefits payouts arising from personal life insurance, disability insurance, group life and group disability insurance; and income from annuity payments, which together have risen to approximately 40 billion dollars per year in the first decade of the new millennium.

Life insurance is the first foundation of wealth preservation.

Disability insurance can replace up to 75% or more of the value of a disabled person’s normal working paycheque.

Personally owned individual life and/or disability insurance can:

  • pay out a home mortgage
  • pay debts and taxes accrued in larger estates leaving heirs with financial stability
  • help small businesses using agreements pass the baton to new leaders
  • help family businesses and farms stay in the family through succession planning, while passing wealth (and paying off liabilities) to the next generation
  • pay off capital gains taxes on second properties such as a cottage
  • cover taxes due when RRSPs are cashed out in the final estate
  • pay off large capital gains on investments at home and abroad
  • equalize estates divided amongst siblings whose parents own significant business assets, where some work outside of the firm
  • pass very large sums tax free to future generations using techniques such as estate bonds

The use of life insurance is increasingly creative the more wealth preservation becomes necessary and can assist in this important strategic area of fiscal protective.

Source: Statistics Canada

 


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