Estate planning isn’t just for the wealthy — it’s for anyone who wants to make things easier for their loved ones. Life insurance plays a major role in helping Canadians transfer wealth efficiently, avoid taxes, and leave a legacy.
Why Life Insurance Helps
Life insurance payouts are tax-free in Canada and paid directly to beneficiaries. This means your heirs don’t have to wait through probate or worry about liquidating assets to cover costs.
What It Can Cover
- Final expenses
- Taxes on RRSPs/RRIFs
- Capital gains on real estate or investments
- Outstanding debts
- Charitable donations
Term vs. Permanent for Estate Planning
- Term life can help cover temporary liabilities (like a mortgage or education costs)
- Permanent life is ideal for estate planning because it lasts your entire life and can build cash value
Naming Beneficiaries
Be specific when naming beneficiaries — and update them after major life changes (marriage, divorce, births, etc.). In Quebec, the rules are different — consider legal advice.
Final Thought
Life insurance is a key part of protecting your estate and making sure your legacy lives on. Even a modest policy can make a big difference for your loved ones. If you would like for a licensed professional to help you explore your options, fill in a quick form below to get connected to a Canadian Insurance Broker.
