Insured Retirement Program
The Insured Retirement Program is an innovative financial planning strategy that transforms a life insurance policy and a bank loan into the potential for tax-deferred accumulation of funds today and tax-free access to those funds in the future.
Under current tax law, the cash value in a life insurance policy accumulates tax-free, up to certain limits. The Insured Retirement Program uses the cash value as collateral for a bank loan in the future. The borrowed funds can be used for things including supplementing retirement income, purchasing a vacation property or going on a trip. The bank loan provides cash when needed and is received tax-free. Generally, the loan doesn't need to be repaid until the death of the life insured. When the insured dies the tax-free death benefit is used to repay the loan. Once the loan is repaid any remaining death benefit is then paid to the policy's beneficiary.
Estate and retirement planning is critical to having good financial health and requires careful consideration. The Insured Retirement Program generally is designed for those who:
need permanent life insurance protection
are between the ages of 30 and 55
are in a high marginal tax bracket
have maximized RRSP/pension plan contributions
want to supplement retirement income with tax-free dollars
want to reduce the amount of tax they are currently paying on investments
have minimized non-deductible debt
