Diane A Gagné | Financial Services - Life Insurance

By: Diane A Gagné  09-12-2011
Keywords: Financial Services, Investment, insurance products

A strategic tool that has proved its worth

Over the years, the financial services industry has established several strategies and concepts using life insurance, for both business and personal needs. 

Contrary to popular belief, insurance not only provides coverage but can also be an integral part of your financial planning and allow you to establish several capital accumulation strategies.

Most of the time, the only reason this product is not part of a physician’s financial planning is that he/she has not been made aware of the benefits of such a product. When you choose a life insurance strategy, you can take advantage of proven solutions currently benefiting thousands of people across the country.

Life insurance represents a unique investment opportunity

Did you know that insurance opens the door to a world of tax advantages? When used properly,  this vehicle may be ideal for physicians who are looking for an effective strategy to transfer passive investments to a tax-advantaged environment.

There is a widely held perception that the sole purpose of life insurance is to provide policy proceeds should a person pass away prematurely.  Though important, this is only one of the uses of life insurance. Under current tax legislation, investment growth within a life-insurance policy is tax-free. This tax-free growth is similar to that of a Registered Retirement Savings Plan (RRSP).  In fact, some insurance products are commonly used as investment vehicles by individuals who earn a higher income given their appeal in terms of taxes.

In addition to deferred-tax investment opportunities, policy proceeds are ultimately distributed directly to beneficiaries tax-free in the event of death.  Therefore, life insurance may be an ideal tool for a physician for financial and estate planning.

What makes this solution so attractive?

  • Immediate estate growth
  • Access to funds if you require them
  • Funds that may be protected from creditors under certain circumstances and that may be exempt of probate fees
  • A wide range of investment choices
  • Tax-free proceeds upon death
  • Tax-deferred investment earnings, allowing for more rapid growth

Many of you feel that to build a comfortable retirement plan, you need to invest in the often volatile stock market, even if the investment risk is outside your comfort zone.  As a busy physician with little time or ambition to follow the stock market, you should seriously consider tax-sheltered investing using life insurance. This can help you reduce your tax bill to a minimum and maximize your capital accumulation over time. 

Here is an example of how stable the investment portion of a permanent life insurance policy has been over the last 20 years in comparison with other investment options:  (please refer to GWL by account)

Invest strategically…

Stop agonizing over where to invest your money to maximize investment returns and focus on how you invest in order to maximize capital accumulation in a tax-advantaged environment to reach the same goals.

We can work in collaboration with your professional advisors to determine whether this solution is appropriate based on your needs and goals.

Keywords: Financial Services, Insurance Policy, insurance products, Investment

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