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Ask a good accountant where life insurance fits in Canadian tax planning and you’ll get an interesting answer: in places most people never think to look. Two features make it special. Within limits set by legislation, value can grow inside a permanent policy on a tax-advantaged basis, and benefits pay out to beneficiaries tax-free. Around those two facts, families and corporations build strategies that few other tools can match.

Start with the estate itself, the most common application. Taxes triggered at death, on investment portfolios, on real estate beyond a principal residence, on business interests, can be substantial. Without a plan, they’re often paid by selling the very assets a family hoped to keep: the cottage, the business, the portfolio built over a lifetime. Insurance can fund that liability for cents on the dollar, arriving exactly when it’s needed. For incorporated owners and professionals, the toolkit gets deeper. Corporately owned insurance can grow retained earnings tax-efficiently, and Canadian tax rules include mechanisms that can move insurance proceeds out of a corporation to an estate remarkably well. Charitable giving, retirement income, and passing wealth between generations each have insurance-based approaches of their own.

These strategies are powerful precisely because they’re technical, and no one should implement them from a brochure. We design them with your accountant, lawyer, and investment advisors at the table, so the insurance serves the plan instead of becoming a plan of its own.