Life
insurance is commonly used as an estate planning tool to preserve the
value of an estate. Income Tax and Capital Gains taxes can erode a
very significant portion of an estate. With some proper planning and
shifting some non-registered assets into the tax sheltered environment of
a properly structured life insurance plan, the value of your estate may be
appropriately conserved for your heirs.
Typically, a Joint and Last to Die life insurance plan is used for
estate conservation. This type of plan insures both spouses and pays
the benefit at the second death - exactly when the funds are needed to pay
taxes owing. This plan is also very cost effective as premiums are
significantly less than a life insurance plan on a single life.
