Advantages Of A Life Insurance Death Benefit

A life insurance death benefit gives the following advantages:

Tax-free
- unless the policy is held in an
  - RRSP: savings component is fully taxed
    - solution: hold the policy outside an RRSP
  - Retirement Compensation Arrangement (RCA): taxed as income (confirm)
    - solution: use split ownership
Creditor-proof
- from creditors of the policyowner, if creditor protection
Paid quickly
- often within two weeks of filing the claim

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page revision: 9, last edited: 17 Nov 2007 15:42

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