The Blunt Bean Counter: Some of the Tough Questions to ask When Considering a Permanent Life Insurance Policy

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On December 12th, I posted a blog Permanent life insurance for high net worth individuals and corporate business owners. This blog is based on A podcast I was a member of the committee. On the blog, I expanded the podcast discussion to review in detail what permanent insurance is and why you might want to use permanent insurance for estate planning or asset diversification purposes.

I mentioned in the post that we intend to do a follow-up podcast on some of the tough questions to ask when you’re considering getting into a permanent life insurance policy. That podcast is now available Here.

Both podcasts are moderated by Simon Kay of IPS Insurance (email: [email protected]). Simon specializes in life insurance for HNW individuals and corporate business owners and is a pioneer in private underwriting. Jay Hershfeld is my fellow panelist on both podcasts. Jay is a highly respected tax and estate specialist with an insurance expertise and is currently a director at Scotia Wealth Management.

Some of the tougher questions we cover in this podcast include:

  • Are there any income tax provisions that make tax-free capital dividends 100% tax-free to the final estate?
  • If a permanent policy has a Cash Surrender Value (“CSV”), are there situations where the value of the CSV shares can increase at death?
  • Does a change in dividend level affect future premium or policy values?
  • How might your children’s plans for your holdings affect your tax plan after the death of the last surviving parent?
  • What are the risks and benefits of leveraged insurance?
  • If you are married younger, should your policy be a last-to-die policy?

If you are considering purchasing a permanent life insurance policy or currently reviewing a plan, I recommend this podcast as essential listening. Personally, I can’t remember reading an article or listening to a podcast that discusses these difficult questions in such detail.

This site provides general information on various tax issues and other matters. This information is not intended to constitute professional advice and may not be tailored to a particular individual or situation. It is written by the author in their personal capacity only and cannot be attributed to the accountancy firm with which they are affiliated. It is not intended to constitute professional advice and neither the author nor any organization associated with the author accepts any responsibility for any reliance on the information contained herein. Readers should always consult their own professional advisors regarding their particular situation. Please note that blog posts are time sensitive and subject to changes in law or legislation.


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