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Life Insurance

Premature death or Natural death can have a significant impact on your family and children. You must be aware of the legal process involved when someone passed away.If someone passes away in Ontario owning assets a Probate needs to be initiated from a Court by the executor mentioned in the WILL( if there is any). If someone dies without a WILL then Ontario’s succession law reform act sets out how the Estate is distributed.ife is always full of unexpected events. A good Life Insurance policy can help in providing the financial security for you and your family. If you should pass away prematurely,  the policy and the benefits thereof can be used to:

  • Leave a legacy to your favorite charity 
  • Provide an income for your family
  • Ensure your family has the resources to maintain a comfortable standard of living
  • Pay final expenses and any debts

Life Insurance is a very good way to avoid all the Legal process and leave inheritance for your loved one’s LUMP SUM TAX FREE.Tax Free is a keyword here as very few assets are transferred to your beneficiaries as Tax Free.

 It is always recommended to have a WILL in place so that the Executor that you appointed in the WILL can initiate and settle the estate.Also the Executor can take care of the Beneficiaries according to your wishes.

 A free WILL Planning work can be ordered by calling us at 416-839-4561

Types of Life InsuranceBasically there are two types of Life Insurances

  • Term Life
  • Permanent Life

Term Life Insurance

Term Life insurance is very effective tool to cover all your temporary Life Insurance needs such as

  • Mortgage or Rent
  • Income Replacement
  • Kids Education
  • Credit Card Debts etc

The main advantage of having a term life insurance is you can get a very high coverage amount at a fraction of the cost. Most Canadians use Term Life insurance to protect their mortgages

Permanent Life Insurance

Permanent Life Insurance is a good option for individuals who want to cover their permanent needs life

  • Funeral ExpenseEstate Taxes
  • Liabilities at Death

Permanent Life insurance can be divided into three types

  1. Term to 100 Life Insurance
  2. Universal Life Insurance
  3. Whole Life Insurance

Term to 100 Life insurance

This is a good option for individuals who want to lock in their premiums for Life. The Life Insurance Policy will remain in force as long as the premiums are being paid for the policy. At the time of Death the proceeds are given to beneficiary(ies) Tax Free bypassing the Probate.

Universal Life Insurance

Universal Life Insurance gives you the flexibility of paying the premiums. You can overfund the policy and the growth in the investment portfolio is Tax Exempted. Ofcourse you should be careful about the Exempt rule changes by CRA from time to time. As a piece of advice you should consider maximizing your TFSA’s before getting into an overfunded Universal Life Policy.

Whole Life Policy

Whole Life Policies can be divided into two types

  • Non Participating
  • Participating

Non Participating

Non Participating policies have the option of LifePay or Twenty Pay. The Policies can be paid up guaranteed in 20 years and have guarantees cash values. The Cash value inside Non Participating Policies are guaranteed and are independent of Market conditions or interest rates.


Participating Policies have guaranteed and non guaranteed cash values.The non guaranteed cash values have generally a dividend component in them. As the name suggests a participating policy holder participates in the profitability of insurance company and every year a portion of the dividend yield by the insurance company goes towards the cash value and a portion goes towards buying additional life insurance. Participating Policies are very good Estate Planning vehicles which can take care of your estate taxes and final expenses.

Choosing the Right

Policy Choosing the right policy can be a confusing process. Some questions you should ask yourself are:

  • Will the policy meet my current needs?
  • Will the policy provide the flexibility to meet my future needs?
  • What does the policy cost–both current and expected lifetime costs?
  • Is the provider established and financially strong?

What Is The Best Type of Life Insurance?

If you’re not familiar with life or living benefits insurance, it can seem like a different language. You’ll hear things like whole life, universal life, critical illness, term insurance, and temporary and permanent needs. Understanding a bit about insurance can help you make an informed decision about the coverage that’s right for you, your family or your business. Basically, life and living benefits insurance can be broken into two types: insurance to meet your temporary needs and insurance to meet your permanent needs.

Why people buy Life Insurance in Canada?

In case of premature death the things can be very messy and challenging for you. In case of death Probate needs to be initiated by your Executor.

In case your executor contacts your bank, mutual fund company or pension plan provider, or the land title office with a non-probated will in hand, asking them to hand over your money or register a transfer of property title.
Those institutions will want proof that:

  • you’ve died
  • the will is valid and is the final version
  • your executor is the person named in your will
  • they won’t be sued if the will is contested

Death and Taxes are the most certain things in our Life. When these two meet Probate happens.Probate is an approval process that validates your will and confirms the appointment of your executor. If you don’t have a will or your executor can’t do the job, the courts have to appoint an administrator — and the costs will be similar to probate. (Make sure you have a Will )
Each province has its own rules and they’re too complex to outline here. In General, your executor will need to apply to your province’s probate court for approval of your will if you died in debt, with bank accounts or registered investments without a named beneficiary, or if you owned property that isn’t being directly passed to your spouse or common-law partner through joint ownership.
The Province Probate is the official body that grants probate approval (sometimes called “letters probate,” but a different name may apply in your province). If there is no will or executor, the court grants “letters of administration.”
Your Executor needs Probate.

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