What is it?
No matter the quantity or value of your assets, sound estate planning practices carry immense value. Properly crafting your estate can ensure:
the creation of a strong legacy
maximize the wealth transfer to the next generation
enhance the efficiency of settling the estate
and minimize the tax implications and other costs.
Estate planning is a subject that all individuals, from all backgrounds, at all stages of life should pay mind to as you can never know when estate planning will become unavoidably relevant.
How does it work?
Though there are numerous fundamental estate planning components such as wills and power of attorney, we at Paradigm Insurance in Winnipeg. focus on life insurance. In the event of the death of the insured, a life insurance policy produces a tax-free benefit to the named beneficiary. This function makes life insurance a crucial inclusion in your estate planning strategy.
Did you know?
You can use life insurance to create tax-free inheritance benefits
Life insurance can act as a tax-free benefit to the named beneficiary. This benefit can be distributed among as many individuals as you desire for the purpose of creating an inheritance.
You can use life insurance to donate to charities and produce tax-credits
You can name a registered charitable organization as the beneficiary of your life insurance policy. Sizable tax-credits equal to the policy amount can be used to cover tax liabilities that may arise upon your death. You can learn more about using life insurance for charitable giving by clicking here.
You can use life insurance to generate liquidity
Life insurance an be used as an alternative to selling off assets in order to pay off liabilities such as mortgages and other debts that need to be addressed so that the people you care about can continue to enjoy these assets.
You can use life insurance to provide a steady income for an individual
Life insurance can be used to establish a fund that can distribute regular payments to an individual on a predetermined schedule.
There are three categories of life insurance solutions
You can learn more about Universal Life Insurance, Whole Life Insurance, and Term Life Insurance by clicking here and by talking to us.
Who benefits from it?
The beneficiaries of your estate.
- If you sufficiently craft your estate plan, your beneficiaries will benefit from reduced legal and administrative fees, minimized tax-liabilities, an expeditious settling process, and the efficient dispersing of the chosen assets.
You yourself
- There is most certainly comfort in knowing that your assets will be distributed as they choose and that your beneficiaries will not be unnecessarily burdened.
A Charity
- If you choose to name a registered charitable organization as the beneficiary of your life insurance policy, the chosen cause would benefit immensely from the donation. Paradigm Insurance Inc. specializes in life insurance for charitable giving. To acquaint yourself with the topic in greater detail, please click here.
What is the process?
Generally speaking, there are three categories of life insurance solutions under which all products fall.
Universal Life Insurance
Whole Life Insurance
Term Life Insurance.
When it comes to estate planning, determining the proper life insurance product begins by understanding your unique needs.
Example of short-term estate planning needs:
Solution:
Term life insurance may be the best option if cash flow is somewhat limited. Term life insurance offers guaranteed rates for a defined period of time, between 10 and 25 years, and will pay out if the insured passes away during the life of the policy. At the end of the term, the policy either renews at very high rates or is cancelled and replaced. Term insurance is a markedly affordable and convenient solution to your short-term estate planning needs.
Example of long-term estate planning needs:
Solution:
Permanent life insurance will be recommended. Permanent life insurance often comes in the form of either Universal Life insurance or Whole Life insurance. The two strategies are compared in detail here. Briefly, both universal and whole life insurance offer steady rates and coverage for life. This ensures that your estate will benefit from the policy pay out regardless of when you pass.
