The Insured Retirement Plan is a financial strategy that provides clients with permanent life insurance coverage and the opportunity to supplement their retirement income. This strategy is ideal for clients who have maxed out their RRSP or pension plan contribution limits.
Your client purchases a tax-exempt permanent life insurance policy for their coverage need.
Life insurance coverage allows the client to accumulate cash value that grows tax-deferred, as long as it is not withdrawn from the policy.
The client can later use the policy’s cash value as collateral for a loan.
The borrowed funds are non-taxable, and the client can use them to supplement their retirement
Upon the client’s death, the proceeds of the life insurance policy are used to repay the loan. The balance is paid tax-free to the client’s beneficiaries.
The accumulated fund of the universal life policy must be greater than $0.
The Insured Retirement Plan (IRP) is suitable for clients who:
Target age: 30 to 55
Clients must be in good health to be eligible standard for the permanent life insurance.
Procedure to illustrate the Insured Retirement Plan: