New rules for policies issued after January 1, 2017 will have a major impact on key provisions of the Income Tax Act. These changes especially target Permanent Insurance policies in 2017, as well as income tax changes beginning in the current year.
Essentially, changes are taking place with the exempt test rules established in Regulations 306-310 and Regulations 1401-1403. These rules govern the amount of income that may be accumulated in life insurance policies without being subject to the accrual taxation rules in subsection 12.2 of the Act. In other words, the proposed changes will reduce the long term ability to accumulate income on a tax-deferred basis within an exempt policy.
What does all this mean? Have you ever considered Permanent Insurance as part of your financial plan?
Ask yourself the following questions:
If any of those points resonate with you, it is important to discuss your financial plan sooner rather than later. In some cases, the underwriting process of insurance policies can take 2-3 months. It’s better to choose the path you want to take, start the paperwork ahead of schedule and alleviate any unnecessary pressures.
- Is it important to minimize your taxes immediately?
- If you were to pass away today, would it be important for your family to be looked after?
- Given the option, would you like an investment that historically produces steady, positive returns?
- If you could not spend all of your retirement assets, is it important that your family inherits them?
- Would you like to have your business/corporate dollars fund your personal retirement years and protect your personal assets?
- Is it important to equalize your estate to your children?
- Are there certain assets you want to pass along to your family (your business, other property, a cottage, etc.)?
- Is it important your children and/or family members are not left with unmanageable debt, and thus forced to sell family assets?
- Do you have a business or family business that you want to pass along to the next generation?
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