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WATCH this Video - It 's been a LONG time since the financial gurus have been recommending Permanent Life Insurance as an investment but in markets like these with everyone running to protect their money it certainly makes sense as a way to protect or grow your wealth.

Tax-Sheltered Universal Life Insurance

Although exempt Universal Life  insurance policies are not tax shelters, they do offer some tax advantages. Under a Universal Life policy, for instance:

bulletpremiums paid in excess of the mortality cost and premium tax are accumulated and invested. Income tax on the returns of investments held within the accumulation fund is deferred until withdrawals are made from the policy
bulletwhen the policyholder dies, beneficiaries generally receive both the face value of the life insurance and full amount of the accumulation fund tax-free, resulting in permanent tax savings and partially funding the estate out of pre-tax dollars

Furthermore, Universal Life can be used to fund retirement needs. Individuals can, for example, borrow from their policy or pledge it as security for a loan, subject to the terms of the policy, with the loan providing a cash flow to fund retirement. Because this cash has resulted from a loan, rather than income, it is not taxable. Also, if repayment of the loan is deferred until the death of the policyholder, the loan will effectively be partially repaid out of pre-tax dollars.

Universal Life insurance is, however, a complex product and should only be purchased with professional advice, including a full explanation of the plan’s terms, underlying investments and costs.

© 2005 Certified General Accountants of Ontario

People looking for a personal tax-shelter should consider a Universal Life contract, it is a legal tax shelter. It is a contract with a life insurance company that will provide income tax sheltering.

 

 

Tax-sheltered Life Insurance Information Form

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© 2005 Certified General Accountants of On

 Protection, Wealth Creation and Management

It's better to have insurance and not need than to need it and not have it.

ProInsure is a Life Insurance Brokerage Agency located in Oakville, Ontario.

472 Caesar Avenue, Oakville, ON, L6J 3Z2 - 905-815-7186