Joshua Bacchus, CPA, CFP®, CLU®
Financial Advisor

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Personal Wealth and Finance

A valid tax deferral tool in Canada

October 1, 2024

If you have maximized your RRSP, are in a higher tax bracket, and may have a capital gains tax liability in your estate, you needn’t seek an offshore tax haven.

Permanent life insurance is a secure and tax-advantaged financial strategy that can help you keep your wealth. For confident investors seeking ways to defer investment taxation, some guaranteed permanent life insurance plans provide a reliable solution.

Accountants often advocate permanent life insurance plans for advanced estate planning to transfer wealth to heirs. Significant policies from $1 million to well over $50 million have been used to transfer wealth to succeeding generations.

Some Permanent Life plans offer a high degree of flexibility, allowing you to maintain control of the investment portion of the plan. You can choose to invest in term deposits and segregated funds, giving you the power to shape your financial future.

By keeping your investment in interest-bearing vehicles, you ensure the interest will avoid tax until you withdraw it from the policy. This plan enables the investments to keep growing to pay for future insurance costs. When a policy owner dies, the entire policy proceeds get paid to the beneficiary tax-free. Note: Changing Canadian legislation may affect the tax status of life insurance proceeds, which your advisor can assess.

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