Risk Management Strategic Partners


There are generally three types of life insurance

1. Term Life Insurance
Term life insurance can be thought of as temporary insurance that one would obtain for a specific reason. This might include a mortgage, family dependents, collateral loan insurance or a business interest.

Term life insurance is generally obtained for 5, 10 or 20 year term periods. At the end of the term a renewable plan will renew without requiring further medical underwriting but rates will typically increase substantially. A plan that is convertible will allow the owner to convert to permanent insurance at any time at market rates without undergoing further medical underwriting.

Term insurance is the most economical form of life insurance. For some it is best to "buy term and invest the rest".

2. Permanent Insurance
Permanent life insurance is designed to provide insurance protection for the entire lifetime of the insured person. Many people appreciate this kind of security. If the insured person dies, his or her beneficiaries will receive the tax-free insurance benefit.

Permanent life insurance is initially more costly than term life insurance. However, in the long run, it is often the more cost-effective decision.   

3. Universal Life Insurance
Universal Life is essentially an unbundled form of permanent insurance. You are buying term and have the option of investing the rest in a tax-deferred plan. You can control the investments in your own selected portfolio and you can see detailed illustrations of where all of your funds are going.

Universal plans can be an excellent way to provide financial security for an individual, family or a business owner or partner.

This insurance can also serve many other needs including but not limited to:

  • Establish an alternative to a traditional retirement plan for someone who is not a member of pension plan. You retain complete control of the plan.

  • If you are a member of a pension plan and thus have limited RSP contribution room then this may be an excellent place to setup another tax sheltered plan for your future.

  • If you have exhausted your RSP contribution limits then you could use a universal plan as a second RSP recognizing that you are contributing after tax dollars.

  • Preserving the value of your estate by providing adequate guaranteed funds to take care of heavy taxes and expenses after death.

  • Creating a dependable financial reserve accessible for any purpose - perhaps an emergency, a business opportunity or children's education.

  • Structuring a buy/sell agreement or key person insurance for a business. The plan can tax-shelter funds for the future use of the business owner or a key employee.

  • Protecting family interests in a business.

  • To help avoid a future tax bill due on the death of the insured.

For nearly everyone, life insurance protection is a key component of a comprehensive financial plan. This is a great way for anyone - even if they don't have a lot of capital - to guarantee that a substantial sum of money is available to their heirs when they die.

We can help you determine the amount of insurance you need. You need to consider your family's income needs, as well as the amount of premium you can afford to pay.