In a world of way too much tax there still a tax strategy that Canadians should take advantage of. This strategy is to decrease your tax burden, and the tactic is purchasing a life insurance policy that allows for tax deferred growth.

Many insurance companies have life insurance contracts that can be used as a tax advantage and an investment tool.

The basic concept is to pay as much money for the least amount of insurance. This is not to say that the insurance portion is overpriced, but rather the over funding goes into a separate account inside the policy and any growth is tax deferred.

This type of policy can be very advantageous to the owner. RRSPs allow for a limited amount of saving and if you want to save more money you get no further tax advantage.

Most Canadians approaching retirement have worries about having enough money. They have worked hard for many years, hoping to retire to a lifestyle of traveling, entertaining and living well.

Considering the ups and downs of the stock market it would be wise to diversify your retirement saving.

Over-funded life insurance can be an excellent solution. First of all you need not worry that you will leave nothing for your heirs. You can spend your retirement money on yourself and the death benefit from the life policy will always leave a legacy for those loved ones you leave behind.

If you are maximizing your RRSP contributions and still looking for a tax friendly way to save call us today for free quotes and detailed explanations of how an over funded life insurance policy can work for you.

Rather then going to a captive agent (like you will find at the banks or a specific insurance carrier for example) please consider speaking with www.life-insurance-quotes.ca. We will compare and contrast the competing insurance company’s offers and find you the best deal.

Some other important advantages exist within a program like this, including but not limited to, tax free growth. No income tax is due on growth or interest earned on cash values in a life insurance policy, and no income tax is due on loans from the policy. A loan can be made on the cash inside your policy and it is generally considered a debt, not a taxable distribution.

Upon your repose and under certain circumstances the death benefit is paid to your beneficiary Tax Free and is not subject to withholding for estate taxes. It also can not be held up in estate or subject to probate fees.

Your life-insurance-quotes.ca agent, along with some advice from a pool of accountants and lawyers (who work with our agents) will assist in setting up the ownership and beneficiary designations properly.

Please note that this article is for information purposes only and should not be considered legal or accounting advice.

Thanks you for reading and please feel free to comment.

Ian Baker
The Insurance Blogger