- Help your family through financial or medical emergencies.
- Supplement your retirement income.
- Help fund your children’s and grandchildren’s education, possibly supplementing their RESPs.
- Provide money to keep your business going, in case banks are reluctant to lend.
- Pay your life insurance premiums, giving you a premium vacation at a time you may need one.
- Pay for home renovations.
You might be surprised what you find inside a life insurance policy
Talk with your financial security advisor:
- If you have permanent cash-value life insurance—Your advisor can help you decide when and how to access its cash value. There are different ways to access the cash value, with different tax implications.
- If you don’t have permanent cash-value life insurance—Your advisor can help you select a policy that not only protects your family, but may also provide an alternative source of cash for when you need it.
Sometimes life insurance can be a better source of cash than traditional investments
The primary purpose of life insurance is protection in the event of death—not to give you a pot of money you can draw on for emergencies. Nevertheless, many permanent life insurance policies accumulate cash value. This grows inside the policy on a tax-advantaged basis. You can access this cash value during your lifetime.
For example, if you needed cash today for your family or business, you might not want to sell off your traditional investments. You might be much better off accessing the cash value inside your permanent life insurance policy.
The information provided is based on current tax legislation and interpretations for Canadian residents and is accurate to the best of our knowledge as of the date of publication. Future changes to tax legislation and interpretations may affect this information. This information is general in nature and is not intended to be legal or tax advice. For specific situations, you should consult the appropriate legal, accounting or tax expert.
To view a printer-friendly PDF version of this article, please click here.
Would you like to know more about access to cash? Please don’t hesitate to contact us via the form below: