Insured Retirement Program
When saving for your retirement, you may find that maximizing your pension plan and RRSP contributions are just not enough due to the contribution limits. The Insured Retirement Programs may be a solution for you.
This strategy uses a permanent life insurance policy that allows you to access tax-free cash during your retirement years, under current tax law.
How it Works: the Insured Retirement Program allows funding into your permanent life insurance policy. At some point in the future, you can assign the policy to a bank as collateral for a loan, where this type of plan is structured as a line of credit. You can use the cash value however you like: to supplement your retirement income, purchase a vacation property, or go on a trip. A life insurance policy placed in this manner will allow you to have the financial security during retirement and, in addition, the permanent life insurance protection for your loved ones.
The bank loan does not have to be repaid until the life insured dies. When the insured dies, the life insurance tax-free death benefit is used to repay the bank loan, and any remaining death benefit payment is made tax-free to the policy’s beneficiaries.