Life insurance is often thought of as something you buy to
protect loved ones in the event of your death. Viewed through this
lens, the premiums you pay seem more like an expense than an
investment. On the other hand, an insurance policy that will take
care of your family members and your business partners could let
you spend more of your money guilt-free as you age and ease into
retirement. From this perspective, life insurance is a great
investment and well worth the cost. Here’s why.
“The goal of leaving a big inheritance to your children, a
faith group, or a favourite charity can discourage a lot of people
from tapping into their wealth and enjoying the rewards of their
hard work,” says David Camps, Vice-President of Marketing and
Client Experience at Lawyers Financial. “That’s
unfortunate because the strategic use of insurance can let you
access your net worth while you’re alive, knowing the policy
will take care of your beneficiaries.”
As your Lawyers
Financial Advisor can explain, there are many ways to protect
your family and your business interests. The key is assembling the
right combination of policies. That’s what our advisors do
best.
PROTECTING YOUR FAMILY
The younger you are, the less likely you are to have substantial
assets that can be handed down to your children or used to pay off
debt. As for the assets you do have, the cost of passing them on
may erode their value (probate fees and estate taxes could kick
in).
That’s why you should consider an insurance policy such as
Lawyers Financial Term 80 Life insurance. It provides a
cost-effective and tax-efficient way to protect your family and
ensure their financial well-being. A guaranteed payout could be
used to:
- Pay off your mortgage.
- Pay off other outstanding debts.
- Replace your income.
- Pay for your children’s
education. - Provide cash to pay probate fees and
taxes without needing to liquidate assets.
PROTECTING YOUR BUSINESS
If you are a sole practitioner or member of a small firm, an
investment in life insurance has two immediate benefits:
1. It can be used as collateral
A term life insurance policy can be assigned to a lender as
collateral for a loan or line of credit. Upon your death, the
insurance company would pay the loan balance and anything left over
from the insurance benefit would be paid to your beneficiaries.
Consult with your Lawyers
Financial Advisor if you anticipate the need for business
financing. They can help you put the right, and most affordable,
coverage in place.
2. It can help in business succession
If you are a partner in a law firm, you likely have a buy-sell
agreement that addresses the death of a partner. Life insurance can
help all of you fulfill the terms of your agreement in a simple,
cost-effective manner, allowing you and your remaining partners to
focus on your business.
Whatever your situation, life insurance is an investment and an
important part of a financial plan that allows for more financial
options while you are alive and still provides a guaranteed payout
to your beneficiaries down the road.
Originally published 08 August, 2020
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
