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Life Insurance

Life Insurance

Life Insurance

The primary benefit of life insurance is that it provides a tax-free cash payment to a designated beneficiary. These funds can be used to provide for the ongoing care of loved ones, and to cover taxes and other liabilities in the event of the life insured’s death.

If something happened to you, life insurance can help secure your family’s way of life. Life insurance can address specific personal needs by paying a guaranteed, tax-free cash death benefit to the desiginated beneficiary when the insured dies. The beneficiary of the life insurance policy may be the spouse, children, employer or estate of the insured person, or some other designated person or organization.

Some common situations for which insurance can be used:

To protect a family financially 
Life insurance on the life of an income earner can provide funds to replace his or her income in the event of death. The death benefit provides financial support for his or her survivors, alleviating the financial hardships they may otherwise encounter.

To fund a trust fund.  
Anyone who is supporting a financially dependent child or adult can purchase life insurance on his or her own life. In the event that the caregiver dies, the guaranteed death benefit can be used to create a trust fund to provide continued support for the dependent child or adult.

To pay off debt.
Mortgages, bank loans, and certain investment strategies can create sizeable debt. Life insurance can guarantee that if the borrower dies, there will be sufficient funds available to pay off these liabilities.

To pay income taxes.  
Many self-employed individuals and professionals pay their income taxes quarterly. Life insurance can provide funds to pay outstanding taxes if the individual dies.

To pay capital gains tax
When an individual dies, taxes must be paid on the difference between the cost price and the market value of their capital property, such as a cottage, investment portfolio, or rental property. The individual’s heirs may not have the funds available to pay these taxes, and as a result may be forced to sell the assets. Life insurance can provide funds that can be used to pay these taxes.

To fund bequests.
It is the wish of many people to leave a cash bequest to a charity, family members, or friends. Life insurance can provide funds for these bequests in a tax efficient manner.

Types of Life Insurance

Term Insurance
Term life insurance provides protection against financial loss resulting from the death of the life insured during a specified period of time (or term). The policy pays a death benefit only if the life insured dies within the given period outlined in the policy. The period of coverage is usually for 5 years, 15 years , 10 years, or 20 years, or until a specific age, At the end of the specified period, the insurance protection ceases, unless the policy is renewed.

Term Insurance is the low-cost, temporary insurance protection. Term life insurance is often referred to as temporary insurance because it is ideally suited to cover temporary risks: risks that have an identifiable duration.

Advantages
The key advantage of term insurance is its relatively low initial premium. These low initial premiums make term insurance an affordable choice for applicants who have limited cash to commit for premiums, but who nevertheless require extensive coverage. The low premiums also make term life insurance an ideal choice when insuring specific risks for specific, finite periods. For example, Term coverage is ideal for covering risks of a clearly identifiable duration, such as insuring a life until a mortgage is paid off, or until children are no longer dependent on their parents. This is the great way to cover temporary insurance needs.

Disadvantages
The key disadvantage of term insurance is that the premiums become very expensive as the life insured reaches older ages. For many seniors the cost eventually becomes prohibitive. Moreover, most term policies cannot be renewed beyond age 80, which makes term insurance unsuitable for someone who needs lifetime coverage. The usual solution to these problems is to convert the term policy to a whole life policy or to buy some form of permanent life insurance as soon as the need for permanent insurance becomes both apparent and affordable and well in advance of the life insured reaching an advanced age.

Not all Term insurance policies are the same.

Before choosing any Term insurance policy, it is important to seek professional advice and guidance to ensure that you choose the best available policy for your situation. Please Contact our office at 1-866-351-4005 for more info.

We distributes the products of major Canadian Life Insurance companies. We help our clients make the right choice.

Universal Life Insurance 
You want your family to have the best in life. But what kind of life would they have if something happened to you? Your family depends on your income. So without you, their way of life could be drastically affected. Protect your family’s financial future with universal life insurance.Universal life insurance is another type of permanent life insurance policy. a policy that covers you for your entire lifetime rather than a pre-determined portion of your lifetime as in Term Life policies. The primary attraction of the universal life (UL) policy lies with its flexibility.

Universal life plans offer the policyowner complete freedom with regard to the amount, frequency, timing, and duration of deposits. The only restrictions are the maximum cash accumulation restrictions of the Income Tax Act and the need to maintain sufficient value within the contract to pay for all insurance costs and other expenses UL policies are unique in that, subject to an insurability requirement.

Some of the key Benefits of Universal life insurance:

  • – Permanent financial protection
  • – Coverage that can adapt as your life changes
  • – Tax-advantaged growth on your savings
  • – Easy access to cash within your policy
  • – Convenient payment options
  • – Increase or decrease the face amount of insurance
  • – Increase or decrease your premiums
  • – Adding or removing riders and options
  • – Stop and restart premium payments
  • – Withdrawing funds from the policy

Universal life was designed to permit policyowners to take full advantage of the deferred taxation provisions of the Income Tax Act.A Universal Life policy keeps the savings and insurance components completely separate. Within policy limits, you can decide how much or how little you want to pay into the policy, or even pay a single premium to fund the entire policy. You decide how your premium is invested, and can withdraw cash from your policy or borrow against it. You can adjust the premium and the face value.

Not all Universal life insurance policies are the same. Before choosing any Universal life insurance policy, it is important to seek professional advice and guidance to ensure that you choose the best available Universal life insurance policy for your situation.

Please Contact our office at 1-866-351-4005 for more info. We distributes the products of major Canadian Life Insurance companies. We help our clients make the right choice.

Whole Life Insurance
Whole life insurance is a form of life insurance that provides protection for the whole of the life insured’s life, not just for a specific term. Whole life insurance is a form of permanent life insurance with a fixed or level premium that is usually payable for the entire lifetime of the insured. The terms whole life, straight life, and ordinary life are often used interchangeably.

Premiums can be paid on a continuous basis over the insured’s lifetime or on any limited basis, such as a single payment, or annually (or monthly, or quarterly, for example) for a stipulated period of time, such as 10 years, or until the life insured’s age 65. Whole life policies establish the premium rate when the policy is purchased, and the rate is usually guaranteed not to increase for the life of the contract.

The actual cost of insurance increases with age and eventually becomes prohibitive at advanced ages. In most instances, this rising cost would pose a problem for those who wish to maintain insurance coverage for their entire life. To alleviate this, whole life insurance spreads the cost of insurance over the life of the policy by using a level or fixed premium.

Not all Whole life insurance policies are the same.

Before choosing any whole life insurance policy, it is important to seek professional advice and guidance to ensure that you choose the best available policy for your situation. Please Contact our office at 1-866-351-4005 for more info.

We distributes the products of major Canadian Life Insurance companies. We help our clients make the right choice.