Life Insurance 101

All life insurance plans begin with a fundamental principle: the policyholder pays a premium in exchange for a tax-free lump sum benefit that will be given to their chosen beneficiaries when they pass away. In addition to this tax-free death benefit, Canadian exempt life insurance policies also provide tax-deferred accumulation. Taxation may come into play when there is a disposition of the life insurance policy, such as through withdrawal, surrender, or a policy loan, or when a dividend is paid to the policyholder. Due to its favorable tax treatment, life insurance is a valuable financial tool.

The Choices

Many insurance companies create plans that offer additional features and benefits, which come at an additional cost to the consumer. To understand the key features, highlights, and distinctions between various types of Life Insurance, please get in touch with us.