Longevity & Love: In With The New

It takes a different kind of broker to achieve the life you want; being insatiably curious, courageous and committed to full service are prerequisites. The new breed of broker also has industry designations, on-the-court experience and access to cutting-edge training. And, Longevity Achieved is filled with them.

Out with the old

The old model is simple – get in and get out. Burn and turn, as they say in the restaurant industry. Gone are the days of a simple financial needs analysis coupled with insurance and investment product recommendations. That method of “service” is at best, antiquated.

Here’s the thing, it may be appropriate to create a simple solution. Burn and turn, if you will. But that became the norm! That’s where we’ve failed our clients. We (the industry) sold out. Here’s why – it is EASY to have THAT conversation.

The concept of temporary insurance is straightforward, easy to explain and easy to understand (that’s not a bad thing, and it’s our job to make any solution be that way), but better (read worse) still – it’s almost always within budget. We started to celebrate the “close” and as a consequence, missed the mark.

In with the new

If we aren’t going to have the HARD conversations, who will? If we miss that unique moment in time, when client meets advisor and there’s a perfect storm of need and willingness, there’s no better time to create vision and plan or better said, the life our clients want and a clear path to achieve it. If we don’t, the client doesn’t get what they actually came for and we haven’t done our job.

That’s not an easy conversation though. It takes something – because you’re putting yourself on the line for something, for someone else’s benefit. You make a bold promise to another human being and say – “look, you have something you want to achieve and I’m the one to help you get it”. You’d have to do something about it, wouldn’t you? And, who wants more to do?

The new breed of broker does. And, Longevity Achieved is filled with them.

For our clients

What moves you into action? Is it inspiration? Is it integrity? Or, perhaps it’s love? Maybe it’s something else.

We’re inspired by the notion of being the new breed of broker and everything that means for us and for you. The integrity with which we operate means we train and develop ourselves in all areas of life (personal and professional) all the time – in service of the questions, “how do I get better at this thing?” and “how do I create the fullest opportunity to make a difference for you?”.

Excited for every conversation and the opportunities that present themselves, we are leaders, for you. Our client relationships are like love affairs and that has us do these crazy things we’re talking about. It’s about being happy, together.

Are you interested in getting started? Or perhaps, you’ve already started and want to experience what you could achieve with a partner that’s really committed to you? If so, meeting with one of our team members is a natural opportunity, click the button below and start a conversation.


For the new breed of broker

Longevity Achieved is a Managing General Agency in Mississauga, Ontario committed to client and broker success. We are of the opinion that in order to deliver for our clients – our brokers must achieve the life they want.

We created a brokerage and MGA that will deliver on that promise. We train high-quality brokers like the good old career agent days – inside of a model that had access to the entire industry, and its products.

We are creating a new breed of broker. In concert, we provide a new business model, high touch coaching, industry designations and performance metrics – along with many other deliverables to facilitate that.

Can you see yourself doing business with a high level of integrity? If so, producing ever-expanding results in a high-performance setting is a natural fit, inquire below and see if you’ve got what it takes.

Advisor: Investor Behaviour – A Crash Course On What Drives Your Clients

Do you think you could advise your clients based on investing behaviour and give up (sort of) advising on investments? Seems a little off, right? Ron Fox, from Glidepath Portfolio Services Inc. says you can, and we agree. We recently attended The Value Of Human Advice hosted by Advocis and Ron lead a stellar session. Here’s our takeaways.

This article is not about investing per se, rather, investor (read: human) behaviour and that behaviour primal in nature. Recommendation; read this post readily asking “based on what I just read, how will I alter my actions to positively impact my interactions with clients?” – that’s how you’ll get the most value.

To start we need a brief snapshot of how our brains work. It’s called Neurochemistry. Disclaimer: We are not Neuroscientists! This is designed to be an overly simplified overview on the factors that motivate our primal behaviours and specifically speaking, our clients behaviours, especially around money.

How does your brain work?

Well, simply put you have three brain ‘operating levels’. The first is the Reptilian Brain – responsible for your routine, unconscious, automatic actions, like your heartbeat. The second, Neocortex which stores life experiences, language, patterns to connect past and present, etcetera – but there’s no emotions here, it’s analytical. And finally, the Limbic System which is impulsive and not rational – it produces chemicals which are responsible for every emotion and feeling that your Neocortex can connect, but it’s not analytical and has no language.

Remember we said, readily ask yourself “based on what I just read, how will I alter my actions to positively impact my interactions with clients?”. This is a good time to ask that question.

What does your brain perceive as value?

In short – chemicals. Specifically, happy chemicals. Our Limbic System produces many chemicals, the most important of which are:

  • Oxytocin: Love Drug
  • Serotonin: Care Chemical
  • Dopamine: Source Of Pleasure (and addiction)
  • Endorphins: Natural Pain Killer
  • Cortisol: Emergency Broadcast System

So, do we perceive value? Imagine, you have an experience in life and based on that experience, the Limbic System releases a certain chemical (the one produced by the natural response to the experience), you get a dose of the associated chemical. Your Neocortex stores that experience (and the resulting feeling produced by the chemical release) and BOOM! a repeatable connection is made. We perceive the good feelings produced by the happy chemicals as value.

Oxytocin: Love Drug

Oxytocin produces the emotional experience of empathy, friendship and trust. Trust is the name we put to the Oxytocin released from being heard and empathized. It also reinforces social affiliation – you know that feeling of being kicked out of a club? It sucks. In the old school (you know, the prehistoric era) being kicked out of the cave meant almost certain death. Which also sucks. So, when you’re acknowledged, affiliated and associated, you get some Oxytocin.

Think about it – why do we engage in handshakes when we meet someone? Physical contact generates Oxytocin, as do acts of service and for example, handwritten notes.

Serotonin: Care Chemical

Serotonin is also called the leadership chemical. It produces a comforting sense of security from being socially important – helping and being helped. The feelings you get in the relationships of coach and player, teacher and student, employer and employee, advisor and client – those are the feelings of honour (Serotonin) flushing through your Limbic System.

It’s also released when people offer respect, like at an awards ceremony. Serotonin also makes you do things that others appreciate – to get respect (which expands mating opportunities and protects offspring, providing social stability). See, it’s very primal in nature! Driving nice cars and owning luxury brands also produce Serotonin – because they’re deemed to elevate you socially. And, that’s probably why you don’t get the same feeling wearing a fauxlex – you can’t fool your brain.

Dopamine: Source Of Pleasure (and addiction)

Dopamine is the chemical of immediate pleasure, the reward chemical. It’s what’ll have you get what you need, even if it takes a lot of effort. Like driving 10 minutes out of your way to find a Starbucks when you get a caffeine craving. Checking off items on a to-do list also provides a Dopamine shot. It also has you take risks to pursue opportunity. It is highly addictive and the source of drugs addictions, gambling addictions, and texting addictions.

Endorphins: Natural Pain Killer

Endorphins are a natural pain killer (like runners high). They motivate you to ignore physical pain – primally, so that you could escape harm when injured. They have a short term effect and today, are triggered by laughing and exercise, among other activities.

Cortisol: Emergency Broadcast System

Cortisol is the chemical responsible for pain. It’s like an emergency broadcast system (you get a massive Cortisol jolt when you stub your toe). Lesser shown though, Cortisol contributes to anxiety, stress and paranoia (which are all survival instincts). If you’re being chased by a prehistoric Saber-toothed tiger, paranoia and anxiety are quite useful.

When you get a shot of this, your body prioritizes where energy should be spent. It shuts down all non-emergency functions, including growth and your immune system, and routes energy to essential bodily services. Cortisol is inversely related to Oxytocin.

Connecting the chemicals and behaviour.

With you clients, start with empathy. Ask a question and give them an opportunity to be heard and connect your cakes with theirs. Empathy triggers Oxytocin, and Oxytocin triggers trust. When one person trusts another, they believe you will protect them. Going the extra miles keeps Oxytocin levels high and also reinforces the value of the relationship.

When someone trusts another to protect them, they are willing to grant them leadership – it’s like being cared for, producing Serotonin. This also facilitates a clients willingness to do things that they would not otherwise do, without your coaching.

Provide your clients with a to-do list. Checking off items on a to-do list generates a Dopamine release for both of you, motivating you, and them, to achieve goals and milestones.

Have you had a client seriously interested (borderline obsessed) with Marijuana and Bitcoin stocks lately? That’s Dopamine. CHASE THE HOT STOCK! Conversely, they get a shot of Cortisol when stocks are down. Cortisol is released in association with the pain felt when stocks fall and that gets anchored. Now, when stocks drop, it hurts. Cortisol is the source of panic selling. Speak to clients Neocortex and stop that Limbic System long enough to stop a panic sell or chasing the hot stock. Be their rock – unwavering.

Positively impacting client interactions.

As advisors, if we do good work, we’re with our clients along the way. Really our value is realized at the time of crisis. Align your clients financial behaviour to be consistent with their core values – know when they’re being rational and when they’re not and act accordingly.

Behavioural advise, financial coaching – that’s where it’s at. We don’t have to be the investment expert to validate our value to our clients. We have portfolio managers for that. Value is less in the actions you take for your clients rather, in the actions you get your clients to take for themselves.

This is not to manipulate our clients – it’s about being informed by the motivating factors that drive our behaviour, often, unbeknownst to either party. But now you know.

For more concepts and opinions, explore our related posts below.


What you need to know:

The information in this article is derived from various sources. We do our best to ensure the sources are both accurate and reliable and – information changes. As such, we make no guarantee or warranty to the completeness of the information presented here or it’s application to your personal circumstances.

Case Study: Insurance As An Investment For The 30 Somethings

Alright, disclaimer right from the get-go. This is an investment concept, an idea. There’s a lot of ideas. Tax Free Savings Account (TFSA), Registered Retirement Savings Plan (RRSP), traditional savings accounts, under your mattress – they are all valid and all apply in different circumstances.

Under your mattress is perfect for a post-apocalyptic world, like in the Walking Dead, assuming we didn’t revert to the gold standard. You get the point. If you’re buying a house in the next 5 to 10 years, an RRSP may be the better option, etcetera, etcetera. Have a look at our investment page for more information about that.

For this case, we’re going to assume the following: we have a healthy, 35 year-old, non-smoking male client, earning $70,000 annually with much lower living costs, leaving some room to invest in a few different vehicles. And, we’re going to consider a hybrid universal whole life policy. There’s many ways to do this, this is one of them.

What’s the cost of this hybrid universal whole life insurance policy?

Invested over the course of 15 years this policy would cost $100,152 or broken down, $6,677 per year. All contributions are guaranteed to stop after 15 years, the policy is paid up and that is guaranteed too.

For some additional context, the cost of the insurance, if purchased in a term insurance policy (temporary insurance) lasting 40 years would cost $618 per year and that is payable for the full 40 years or when you decide to stop, at which point, it would cancel. The total cost of carrying that for 40 years is roughly $24,720.

We use a term insurance policy to compare, rather than a whole life insurance policy (which would be more appropriate) because we’re looking at insurance as an investment in this article, and the old adage buy term and invest the difference is applicable here.

What’s the benefit of this hybrid universal whole life insurance policy?

There’s many benefits to purchasing a hybrid universal whole life insurance policy. The insurance portion (which we will not go in to, in depth) is always a plus, as in, you’re mitigating the financial risk of untimely death on your benefactors and as always, guaranteeing your insurability.

Further, a hybrid universal whole life policy has a unique feature attached to it. The investment returns in such a policy are vested, meaning they can never be taken away and it can never give a negative return, offering higher cash values and a stable collateral for the times one would want to borrow against ones own policy.

Finally, there are contractually guaranteed returns – yes, they are minimal – and they are comparable to most other guaranteed investments, and certainly far outweigh the returns of money sitting in a high interest savings account.

What’s the return of this hybrid universal whole life insurance policy?

Your $100,152 investment will yield $354,358.21 at age 80, that’s net of taxes and management expense ratios (and it’s at a conservative 5.5% return – which is not guaranteed). The contractually guaranteed return at age 80 is $165,178. That is a big swing – and that’s the ground floor, in writing.

Consider your $100,152 investment over 15 years, this investment (along with providing you a healthy death benefit immediately) will grow as any investment should. See the chart below for the percentage returns based on the bar graph above.

AgeYearRate of Return (Death)
%
Rate of Return (Surrender)
%
Weighted Average Yield
(net of MER)
40589.29%-79.45%0.00%
501512.37%-2.07%6.30%
60256.62%0.75%3.80%
70354.87%1.31%2.75%
80454.06%1.53%3.68%

The real takeaway here is the guaranteed nature of what we’ll call, the ground floor. And that’s where this investment option shines. It’s literally all upside and there is no limit to that, but there is a limit to the downside and herein lies the true value.

What if we invested in different options instead?

Comparatively speaking, investing in a non-registered account would yeild similar results once you factor in taxes. And, as always, there’s market exposure. We’re not out to deter anyone from being in the market! We must be cognizant of market exposure, however. We used a 5.5% return assumption, as we did for the life insurance policy.

The Tax Free Savings Account produced a better return compared to the hybrid universal whole life policy. The question here is, what are we trading off? Simply, it’s predictability, stability, risk-mitigation and guarantees. And that may be appropriate for some of us – in reality though, these are very different strategies meeting distinct needs.


As you can see, there are a lot of positives to this particular plan – and while it may look like the TFSA with a term insurance policy would garner the best results, we must factor; the unpredictability of the markets, the volatility of the markets (distinct from the unpredictability re: 2008) and, the guaranteed and vested nature of this insurance policy. And, all those points are moot if you’ve maxed your contribution room – then, all signs point to insurance.

For more concepts and opinions, explore our related posts below.


What you need to know:

  • The concepts offered are based on information available at the time of writing, it is subject to change.
  • Coverage is not guaranteed for everyone – this coverage is underwritten and based on an applicants age, sex, smoking status, family history, medical history and a slew of other pertinent information.
  • As always, seek advice from your financial professional, accountant and tax lawyer.
  • For more information regarding the different ways to implement an insurance policy as an investment, reach out to our office – we are elated at the opportunity to offer a no obligation consultation.

The information in this article is derived from various sources. We do our best to ensure the sources are both accurate and reliable and – information changes. As such, we make no guarantee or warranty to the completeness of the information presented here or it’s application to your personal circumstances. The rates presented in the case study as well as the concepts in this article are for informational purposes only. Before acting on any of the above concepts, reach out and get a personalized look at the applicability of this and other insurance strategies for your unique personal or corporate circumstances.

Life Insurance For Millennials

Really? Yes, really. Look – it flies in the face of reason if you’re looking at it from a traditional insurance perspective. I’m with you on that.

If we look at insurance in the traditional sense, we’re mitigating a risk that is likely to happen over a period of time where the results of that event happening would have a significant impact on your life (read; estate) and lives we leave behind. If you accept that definition.

Unless you have children, a spouse, a mortgage, a cause that you’re committed to positively impacting (in your lifetime or beyond), dependents (other than children, like ailing or aging parents) or a large estate that will have tax implications at death (even then you’d need someone who’s supposed to benefit from it), then – common sense would say, you don’t really need life insurance.

Fine. The traditionalists will say we all have final expense needs – as in, we all have a funeral to pay for and we’re responsible for that – save for those who don’t mind having someone else pay for it. Even then, the government will chip in to the tune of $2,500 to help out there. So, technically, you have that need. But to buy insurance in your 20’s or 30’s for that? Both morbid and a little unrealistic to be worth enough to move someone in to action.

So then, what? What would be worth while? Well, consider the following:

  1. Buying life insurance early will save you money in the mid to long term, because you’re young and insurance is cheaper when you’re young and healthy.
  2. Unless you strike gold – you’ll need insurance in the future anyways. And even with all that gold, you’ll have taxes to pay and there’s a strong case for insurance in that instance.
  3. In the case of permanent insurance or living benefits, you’ll build a cash value that you can tap into in the future – having this automatic saving mechanism is a plus for our inherit impulsive nature.
  4. You’re at your healthiest and insurance does not come easy or cheap later in life – especially with health issues (we’re talking simple stuff, like diabetes, high blood pressure and other stress related ailments). So, you’re guaranteeing that you’ll qualify for it, before you need it. And that’s the point of insurance.
  5. There’s a lot to be said about creating from the future – as in, purchase the kind of insurance you’ll need once you’ve achieved what you say you want. None would have been the wiser, except you. You knew it.
  6. Finally, and most controversially, use it as an investment.

We’ll get some flack on number 6, so here’s full case study on that, click below.


What you need to know:

  • The concepts offered are based on information available at the time of writing, it is subject to change.
  • Coverage is not guaranteed for everyone – this coverage is underwritten and based on an applicants age, sex, smoking status, family history, medical history and a slew of other pertinent information.
  • As always, seek advice from your financial professional, accountant and tax lawyer.
  • For more information regarding life insurance for millennials, reach out to our office – we are elated at the opportunity to offer a no obligation consultation.

The information in this article is derived from various sources. We do our best to ensure the sources are both accurate and reliable and – information changes. As such, we make no guarantee or warranty to the completeness of the information presented here or it’s application to your personal circumstances. The concepts in this article are for informational purposes only. Before acting on any of the above concepts, reach out and get a personalized look at the applicability of this and other insurance strategies for your unique personal or corporate circumstances.

How To Get Free Critical Illness Insurance

Yes, it’s possible – depending on how you define free, and when you want it to be free. To be clear – the kind of free we’re talking about is a return of premium rider – it costs something today and you get a full ‘refund’ if you don’t use the product within a defined period of time.

For the purpose of this article, we’ll assume that you have a basic understanding of what Critical Illness insurance is and what it’s for. If you need a refresher, check out this article.

Can you get coverage for free, right now, with no money? Yes – here’s a small critical illness policy from Industrial Alliance for free, for children for between the ages for 2 and 5. But, that’s not what we’re talking about.

How does a return of premium rider work?

It’s pretty straight forward – and an added incentive provided by the insurance companies to entice clients to opt-in to critical illness insurance. Let’s say you purchased a critical illness insurance policy, you have the option to purchase a return of premium rider, at an added cost.

What you’re getting for that investment is the option to have all of your premiums returned (including the cost of the return of premium rider) after a pre-determined length of time, if you haven’t contracted a critical illness.

On the court, if you purchased a $100,000 critical illness insurance policy for $100 per month and added the flexible return of premium rider (meaning you get the option to return 100% of the premiums you paid after 15 years) for an additional $50 per month – you’d be paying a total of $150 per month or $1,800 annually.

After 15 years, and not being diagnosed with a critical illness, you’d have the opportunity to exercise your right to the return of premium rider, at which point you’d get 100% of your money back – or $27,000.

What kinds of return of premiums riders are there?

There’s a few, but most important are:

  • Return Of Premium On Death Rider (ROPD)
    your beneficiary will get 100% of the premiums you paid in the case of death and you hadn’t made any claims against the policy.
  • Flexible Return Of Premium Rider (FROP)
    you’ll have the option to get 100% of your premiums back after 15 years, or any time after that.
  • Return Of Premium At Age 65 Rider (ROP)
    you’ll have the option to get 100% of your premiums back at age 65, or any time after that.

There is a rider for a paid up critical illness policy which works like the Flexible Return Of Premium Rider but at 20 years, instead of 15 years.

Are there alternatives to a return of premium rider?

Yes, some people find it best to create their ‘own return of premium’, as in, investing the same amount that the return of premium rider would have cost and going-it-alone in the market. Ultimately, this will garner a better return for the most part. But we’re exposed to a new level of risk – the general ups and downs of the market and for some, that is not an acceptable risk. Consider, the return of premium rider is guaranteed to not loose money, via contractual obligations – it’s in the papers.

What is the best return if premium rider?

That all depends on what you value the most – having the critical illness coverage or the option to get your money back – and when.

If you’re someone who is intent on have critical illness coverage for your whole life, then a paid up T-100 critical illness insurance policy with return of premium rider may be the way to go.

If you know you’ll likely collapse the coverage in 15 or 20 years, say because, you’re covering a temporary risk while you’re building your savings or nest egg, then a T-75 critical illness insurance policy with flexible return of premiums may be best.

There’s many-a-way to achieve your desired outcome – it’s about discovering what you want and speaking with someone who knows how to get you there.

For more concepts and opinions, explore our related posts below.


What you need to know:

  • The concepts offered are based on information available at the time of writing, it is subject to change.
  • Coverage is not guaranteed for everyone – this coverage is underwritten and based on an applicants age, sex, smoking status, family history, medical history and a slew of other pertinent information.
  • As always, seek advice from your financial professional, accountant and tax lawyer.
  • For more information regarding critical illness insurance policies reach out to our office – we are elated at the opportunity to offer a no obligation consultation.

The information in this article is derived from various sources. We do our best to ensure the sources are both accurate and reliable and – information changes. As such, we make no guarantee or warranty to the completeness of the information presented here or it’s application to your personal circumstances. The rates and concepts presented in this article are for informational purposes only. Before acting on any of the above concepts, reach out and get a personalized look at the applicability of this and other insurance strategies for your unique personal or corporate circumstances.

Liberate Your Profits With A Corporate Owned Split Dollar Critical Illness Insurance Policy

It’s called a split-dollar critical illness policy or corporate-owned critical illness policy (we’ll be using the name interchangeably) and it’s a risk mitigation strategy that has multiple upsides – more so than the traditional insurance coverage that it provides. Considering some of its components have yet to be ruled on by the CRA, there’s an interesting strategy that’s emerged for the time being. We’ll discuss that here.

What is a corporate-owned critical illness insurance policy?

It is a traditional critical illness policy, owned (purchased by) your corporation – therefore, the corporation is the policyholder. You or a key shareholder or a key director (etcetera, etcetera) would be the person the policy is purchased on – therefore, the person (you) is the insured.

That’s it. Naturally, one would go to “why do I need, want or desire a policy like this?”. In that case, it’s important to look at the benefits of a critical illness insurance policy.

What is the benefit of a corporate-owned critical illness insurance policy?

Simply put, there is a financial burden or implication thrust on a corporation when one of its key people is diagnosed with a critical illness. What kind of burden? Well, if you’re the sole shareholder and a key player – you are the business. And, if you’re out for the count, so-to-speak, or better, not out – just on leave, you’ll need to replace yourself.

Let’s say you didn’t need to replace yourself – you’ve got a great business that operates with little contribution by you (today). Certainly, the advice or consultation that you’d provide would be missed. Consequently, decisions that would normally be made (or not made) may go the other way. And that will have financial implications.

Let’s say further, that isn’t the case either. Well, you need to get better, don’t you? And, while OHIP has great advantages – there’s a flurry of treatments that it doesn’t cover, not to mention the time off for yourself and a significant other or the cost of a support person, or travel or parking, or alternative treatments, or, or, or… you get the gist of it.

We can all agree there is a financial implication to getting sick, and if you’re one of the lucky few who have enough money to deal with that (you are, if you’re considering this strategy) then my question to you is this – why use your hard-earned dollars, savings and investments to get better when you can use someone else’s?

A critical illness insurance policy pays a lump sum of tax-free money to the beneficiary and that money can be used for whatever you want.

How does a split-dollar critical illness insurance policy work?

There is a rider (more on riders in another article) called Return Of Premium and that is a key component of this strategy. Before we talk about that – briefly, a rider is like an add-on, a separate part of a policy like a passenger in a car. The driver is the policy, and the passenger is the rider. What is important to note, is that a rider is not mandatory and by virtue of it not being mandatory it can be added or not added. Further, it can be added (owned) by the policyholder or the insured. The owner of the rider gets the benefits of the rider.

So, the Return Of Premium rider is added to a traditional corporate owned critical illness policy and the beneficiary of the rider is the insured (you). In order to derive the benefit, you’d have to pay for it – I mean, you are the owner of it, right? So, what is the benefit of it? Just what it says – Return Of Premiums… which premiums? ALL OF THEM. The premiums paid for the policy and the premiums paid for the rider.

Simply put, the way it works is the corporation owns the policy and you (the business owner and insured) owns the rider. And you’re each the beneficiaries of what you own.

What is the real benefit of this critical illness insurance strategy?

The real benefit is and must be the critical illness protection you purchased. It is risk-mitigation at it’s finest. As described above, there’s a financial burden to getting sick and if a critical illness diagnosis happens, the insurance company pays a lump sum of tax-free money to the corporation to do with it what it wishes. And it is almost certainly more money than the corporation paid into the policy over the years it’s owned it.

What is the added benefit of this critical illness insurance strategy?

Let’s say you don’t get sick – what then? Well, you paid for and own a rider called return of premium and that’s what you’ll get. You’ll exercise your right to your return of premiums and that includes what the corporation paid and what you paid (with after-tax dollars along the way). Nifty, right?

Why is this important? Well, you used retained earnings from your corporation to pay for this policy. If you had taken them out in a traditional sense, you would have been taxed at whatever tax rate you’d have been taxed at. But, you didn’t do that – you saw that your business was exposed to the risk of a critical illness to one of it’s key players and decided to mitigate that risk and used corporate retained earnings to pay for that policy.

Now, when it comes time to claim that return of premium – you’ll get that money tax-free or you won’t – but in that case, you got sick and the corporation reaped the rewards of prudent planning and risk mitigation. And those rewards far outweigh the return of premium anyways. Win, win – save for you got sick – but we’re looking for silver linings here.

What hasn’t the CRA ruled on?

What the CRA hasn’t ruled on is whether you got a shareholder benefit in the instance that you exercise your right to the return of premium. See, this can’t be a windfall victory for you, that’s akin to tax evasion and not what we’re out to achieve.

With the appropriate agreements, contracts and accounting – along with real life scenarios where we can safely say this is a risk mitigation strategy, the concept proves that there’s no issue. And, insurance companies are going to bat for clients where the CRA has ruled otherwise. Ultimately, putting their money where their mouth is, so-to-speak.

Hence the importance of building this type of plan with a sound financial planner in concert with your accountant and tax lawyer.

How can I use a corporate-owned critical illness insurance policy?

Ultimately, you’re protecting yourself and your corporation from the risk of a key player being diagnosed with a critical illness and losing their contribution for a period of time. That’s the main and most important part and the usage of this is clear.

Secondarily, without the need to use the aforementioned, you’ll be reaping the reward of return of premiums of which, you paid some and your corporation paid some. Effectively providing you with a healthy return on your money (consequentially) via preferential taxation rates.

To experience a real life case study, click below and read on!


What you need to know:

  • The concepts offered are based on information available at the time of writing, it is subject to change.
  • Coverage is not guaranteed for everyone – this coverage is underwritten and based on an applicants age, sex, smoking status, family history, medical history and a slew of other pertinent information.
  • As always, seek advice from your financial professional, accountant and tax lawyer.
  • For more information regarding the split-dollar corporate owned critical illness insurance strategy reach out to our office – we are elated at the opportunity to offer a no-obligation consultation.

The information in this article is derived from various sources. We do our best to ensure the sources are both accurate and reliable and – information changes. As such, we make no guarantee or warranty to the completeness of the information presented here or it’s application to your personal circumstances. The rates presented in the case study as well as the concepts in this article are for informational purposes only. Before acting on any of the above concepts, reach out and get a personalized look at the applicability of this and other insurance strategies for your unique personal or corporate circumstances.

Make Your Mark With Charitable Giving In A Permanent Life Insurance Policy

You may be asking, is this really for me? It may be. Be it pure altruism, a desire to contribute or to positively impact a cause, charitable giving has its place in the world. In this article we’ll talk about strategic ways to give that benefit your desired cause and make the difference for your bottom line – during your lifetime and beyond. Noteworthy, doing charitable giving this way doesn’t detract from your heartfelt contribution, rather, you create a win, win, win scenario. Yes, that’s 3 wins.

You may have a certain sum of money that you’d like to leave to your favourite charity or cause during your lifetime or at the end of your lifetime. Consider, a permanent life insurance policy purchased with that sum of money will make a greater impact at the end of your lifetime. It’ll be much more money. And your estate, your family and the legacy you leave will benefit in a multitude of ways.

For the purpose of this article, let’s say you have $250,000 earmarked to your favourite charity – or $25,000 a year to give, over time.

Giving the “old-fashioned” way.

The premise here is simple, you give the charity that $250,000 and you get a donation receipt for your gift. You could do it in a lump sum or over time, depending on how you wanted to use the donation receipts. You’ll use that donation receipt to offset some of the taxes you’ll pay – great! But did you get the best bang for your buck? Probably not, here’s why.

Giving with a personally owned permanent life insurance policy.

Let’s say you didn’t donate that $250,000, rather purchased a personally owned permanent life insurance policy that costs $25,000 per year. For arguments sake, we’ll assume that $25,000 buys you a $1,000,000 joint-last-to-die life insurance policy with the charity as the beneficiary.

Well now, at the time of loss of life, your estate will leave a $1,000,000 donation and get a donation receipt for that amount to boot. A much greater tax benefit than the money that you invested providing a substantial tax savings.

Giving with a charity owned permanent life insurance policy.

Or, you use the money to purchase a $1,000,000 permanent whole life insurance policy but this time the charity owns the policy – but you’re paying for it. You’ll benefit from the same donation receipts that you would have, had you given the money directly to the charity. And, the charity will get a much greater gift at the end of your lifetime. It’s not the $25,000 per year that you donated, rather, a $1,000,000 windfall – effectively, you’ve enlisted the insurance company to be your giving partner.

Giving by donating your RRSP or RRIF (and replacing your generational legacy with a joint-last-to-die insurance policy).

This strategy is a highly tax efficient way to give. Let’s say at the time of loss of life, your RRSP is worth $1,000,000. Well, that’ll be taxed as income on death – leaving your heirs with a little under $500,000.

Instead, leave your RRSP or RRIF to your charity of choice and they’ll benefit from the full $1,000,000 since that money won’t be deemed income and as such, it’s not taxable. But, what happened to the money you were leaving to your heirs?

Remember that money you were going to leave the charity? The $25,000 per year? Use that to fund a $1,000,000 joint-last-to-die permanent life insurance policy and leave that to your heirs. They’ll benefit from a $1,000,000 windfall, tax-free, as death benefits via insurance are paid tax-free.

Are we creating money our of thin air? We think not. It is simply an effective tax planning strategy, consequently fulfilling your intention in a multitude of ways.

Which charitable giving strategy is best for me?

That all depends on when you want to benefit from your charitable gift – be it now, in smaller pieces – or in a single large amount when your estate presumably needs it most. It’s a conversation worth having today.

Who’s winning here?

Simply put – your cause, your estate and your heirs. See – win, win, win.

These concepts are just a few of the ways to give and create a strategically positive outcome for multiple parties – there’s many more. To experience a real life case study, click below and read on!


What you need to know:

  • The concepts offered are based on information available at the time of writing, it is subject to change.
  • Coverage is not guaranteed for everyone – this coverage is underwritten and based on an applicants age, sex, smoking status, family history, medical history and a slew of other pertinent information.
  • As always, seek advice from your financial professional, accountant and tax lawyer.
  • For more information regarding the different ways to implement charitable giving strategically, reach out to our office – we are elated at the opportunity to offer a no obligation consultation.

The information in this article is derived from various sources. We do our best to ensure the sources are both accurate and reliable and – information changes. As such, we make no guarantee or warranty to the completeness of the information presented here or it’s application to your personal circumstances. The rates presented in the case study as well as the concepts in this article are for informational purposes only. Before acting on any of the above concepts, reach out and get a personalized look at the applicability of this and other insurance strategies for your unique personal or corporate circumstances.