Preparing for the eventual transfer of assets between generations has been the traditional purpose of life insurance.  Over time and with innovations in the insurance industry, life insurance has evolved to also include wealth creation, and income generation elements. 

Insurance products can be owned by an individual or inside a corporation depending on the unique situation of each person, family and business; that is, who pays the premiums (or deposits depending on the insurance type) is relevant.

Permanent (whole), Universal and Participating life insurance policies offer a number of potential benefits to individuals, businesses and families depending on who pays the premiums and who is the beneficiary.

In addition to the lump-sum death benefit that provides asset protection for beneficiaries, insurance policies offer various degrees of tax avoidance and deferral that contribute to their attractiveness.

As many of us know, financial stress can impact many areas of our lives. A study conducted by Fidelity in collaboration with Stanford University found that the worse financial shape we are in the more likely we are to have severe stress-related issues in our lives. The study found that taking on more debt caused higher stress levels, worsened sleeping patterns, weight gain, and a general decrease in physical activity which in turn can lead to greater health problems.  With that information, minimizing money woes should be on everyone’s minds.

The Financial Planning Standards Council (FPSC) found that 42 percent of Canadians rank money as their greatest stressor and that number certainly doesn’t seem to be going down.

As your wealth grows, so does the level of financial risk you inherently take on. The higher your income, the more you have to lose if you were to be diagnosed with a serious illness, become disabled or are otherwise be unable to work. Your ability to earn income is a valuable asset, and just like you would insure your home or vehicle, it should be protected.  There is no greater threat to your retirement plan than an unexpected tragedy that cuts off your income stream ahead of schedule. It’s best to speak to your financial advisor about strategies you can use to make sure that your wealth stays intact, as this is one of the most crucial aspects of a sound financial plan.