Insurance products* are paramount in helping mitigate the very serious financial consequences of an untimely death or illness. They are used extensively in the long term planning strategies of individuals and small business owners.
Protect loved ones: The proceeds of a life insurance Policy are used to cover the costs of funeral arrangements, pay down debt or create an asset pool to replace the income lost by the passing of a primary provider. The goal is to reduce financial hardship for those left behind
Estate planning: Life insurance proceeds can cover some or all of the tax liabilities that are triggered upon death, thereby leaving more of the estate intact for one's heirs. Many individuals have also used life insurance as a way to create a legacy through charitable giving.
Tax planning: The tax exempt status of life insurance and the surplus cash in a corporation combine to efficiently transfer wealth to one's heirs. Similar strategies are also used for individuals who are not business owners.
Succession planning: Life insurance contracts are the most cost-effective way to finance buy-sell agreements between business partners.
CRITICAL ILLNESS INSURANCE
A supplement to disability insurance: While disability insurance is a valued form of protection, it does come with its limitations. These include a cap on the amount of coverage, the lack of a lump sum payment and the sometimes arduous process of qualifying for benefits. Critical illness insurance coverage is used a supplement to disability insurance and the payout is based on a clearly defined set of criteria.
Medical expenses: A debilitating illness is often accompanied by unprecedented medical expenses. Critical illness insurance benefits can help alleviate this financial stress.
Cash cushion: Even if the expenses from an illness remain manageable, the payout from a critical illness insurance policy can provide the peace of mind that comes with a ready cash balance in one's bank account.
*Insurance products and solutions are provided by NBF Financial Services (NBFFS). NBFFS is not a Member of the Canadian Investor Protection Fund (CIPF). Therefore insurance products are not protected by the CIPF.