People who have exhausted their RRSP and TFSA contribution room and wish to safeguard and enhance their estate holdings even further, using tax efficient strategies, may opt to over fund a life insurance policy.
What is overfunding?
When you over fund a life insurance policy, you deposit above and beyond what your regular premium is supposed to be, up to a predetermined ceiling amount.
These extra amounts will accumulate within the policy, tax deferred, and create a cash surrender value, which will immediately enhance your estate’s worth.
In addition, you can use the accumulated funds for any purpose i.e. go on vacation, buy a car or even supplement your current or future income, without potentially having to pay these funds back.
This strategy should be considered when developing a comprehensive financial plan for you and your loved ones as it provides for:
• Increased – tax free – inheritance for beneficiaries when personally owned
• The ability to transfer accumulated corporate retained earnings to beneficiaries with minimal tax consequences when corporately owned
• Possible non taxable withdrawals in the event of critical illness, disability or loss of independence
• The ability to choose investment structure and allocation
• Coverage flexibility to address changing needs
To learn more about this advanced strategy Email us or call 778-776-4334.
Bridge to Prosperity is a unique Business and Wealth Management firm. Our goal is to help business owners, professionals and individuals enhance and protect their assets, using advanced tax efficient strategies.