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Use Life Insurance to Enhance Your Retirement

Posted on April 28, 2008 at 5:39 pm 
Filed Under Financial Planning, Insurance Planning, Personal Insurance

Life insurance is typically thought of as something that only benefits your family, not you.

Although the above statement is accurate, it can also benefit you…today. Many Canadians have used life insurance to supplement their retirement income through what’s called an “Insured Retirement Program” (IRP). An IRP is a financial planning strategy that usually offers tax-free supplemental retirement income through tax-exempt life insurance.

Typically with an IRP, the client buys a permanent life insurance policy (for example Universal Life or Whole Life) and deposits monies above and beyond the premium charges associated. The excess annual deposits are invested and benefit from tax-deferred growth. Upon retirement, the insurance policy is used as collateral to secure a loan through the bank, set up much like a Line of Credit. The lender then provides the borrowed funds tax-free to the client to supplement their retirement income.

Your Take-Away: If you are looking for a way to supplement your potential retirement income, have come close to maxing out your RRSP’s or simply don’t like them, and need a place to put some extra cash above and beyond your RRSP savings, this may be the perfect strategy for you.

If you fall into any of the above categories, you could benefit in the following ways:

Again, this is not a one size fits all strategy, but it can be very useful for those in specific situations. After all, it’s always better to save a dollar in tax then to increase your income by a dollar, isn’t it?

Until next time, have a Magnificent Monday.

Chris & Elisseos

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2 Responses to “Use Life Insurance to Enhance Your Retirement”

  1. Using Life Insurance to Enhance Your Retirement on April 28th, 2008 6:36 pm

    […] Read the rest of this great post here […]

  2. Financial Planning on The Finance World For News and Information Around The World On Finance » Blog Archive » Using Life Insurance to Enhance Your Retirement on April 29th, 2008 8:01 pm

    […] Using Life Insurance to Enhance Your Retirement Life insurance is typically thought of as something that only benefits your family, not you. Although the above statement is accurate, it can also benefit you…today. Many Canadians have used life insurance to supplement their retirement income through what’s called an “Insured Retirement Program” (IRP). An IRP is a financial planning strategy that usually offers tax-free supplemental retirement income through tax-exempt life insurance. Typically with an IRP, the client buys a permanent life i […]

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