Beaton Insurance Services
Reasons To Buy Life Insurance
When you plan for the future, one of the things you count on is continued income for yourself and your family. Your premature death could result in a drastic reduction of your family's standard of living. There are no U-turns on the road of life. We are all travelling on an inevitable trip from birth to eventual death. You may die sooner than expected or hopefully live a long and prosperous life. Life insurance addresses the tragedy of premature death by providing tax free funds to help survivors who depended on you, get on with their lives.
At death, your capital (cottage, land, business, non-registered and registered assets) can be transferred to your spouse without tax. However, 50% of the capital gain and 100% of the registered assets will be taxable upon the death of the last surviving spouse, at which time, all assets are counted in the final tax return propelling many taxpayers from an insignificant tax bill to the highest tax bracket. You may want to preserve your estate value for your children. Life insurance can be purchased for a fraction of the total projected tax bill payable at death.
Life insurance is sometimes acquired for a child as the beginning of a lifetime financial plan. Quickly paid up whole life plans with growing cash values are very inexpensive when children are young and can become a valuable asset when paid up.
Successful business owners, proud of their accomplishments may want to pass their businesses on to their children so that they can continue to profit from the parent's labour. Don't just leave it to them in your will. First make sure you teach them how to run it. And then make sure the tax department doesn't benefit from their inheritance more than your children do. One way to do that is to buy life insurance, the value of which equals the amount of taxes your kids will have to pay on your business the day they inherit it. If they don't have cash to pay those taxes, they may be forced to sell the business at a fire sale price to raise the money quickly. [The tax department has not been known to grant time to pay.]
Business people also find life insurance valuable to fund partnership agreements. Upon the death of a business partner, that partner's surviving family can be quickly and efficiently bought out for a fair price with life insurance proceeds. The absence of funds to complete such a buy out could result in the survivors becoming new participants in the activities of a business they may not understand. A business may not survive this kind of interference from the surviving family. Key person life insurance is also used to protect businesses against the loss of important employees without whom, the daily business would suffer. The proceeds from this kind of coverage gives a business time to find an appropriate replacement. The alternative to life insurance in either of these sceanarios is to have created a sinking fund long before a death takes place or borrow the money at time of death.
Whole Life insurance can provide additional income at retirement through policy cash values.
If you want to be remembered in a larger sense, Life insurance can enormously increase the amount of money you could bequest to a favorite charity or organization.
15310 Pacific Avenue
White Rock, British Columbia, Canada V4B 1P9
Tel: (604) 535-2404
Toll Free Canada: 1-800-667-8818
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