Life insurance can play an extremely important role for both individuals and businesses because of the guarantees that it can provide.
For individuals, life insurance can:
- Pay for final expenses
- Pay for debts, such as credit cards and loans
- Pay off your mortgage
- Provide an ongoing income for your family
Life insurance can also play a role in Estate Planning.
Some people don’t realize that registered funds (RSPs and RIFs), a stock portfolio, a family business, as well as real estate (other than one’s principal residence) may all be taxed at time of death. Life insurance can provide the funds needed to pay these taxes so that some assets need not be liquidated.
Additionally, life insurance can provide an inheritance for children, grandchildren and for a favourite charity.