People heard about life insurance but some take it for granted or do not have enough knowledge about important facts. They may have known its relevance but they are not insured.
Top 3 reasons given why:
• It is not an essential need.
These are individuals with no dependents, no debt and feel that their demise will not be a financial to those they left behind.
• People do not have money to pay premiums.
There are individuals who are financially burdened and who cannot afford any coverage for them and family. Life insurance products or other providers are not affordable in Canada.
•People believe life insurance is not a priority.
Life is so uncertain; crisis happens anytime, it’s most unexpected and usually at the worst time. Your health is your number one asset! What if you were diagnosed with Cancer today, or had a heart attack tonight? Or had a stroke at work today? Where would the money come from to receive treatment? And how can you cope with your family obligations? So it better to plan ahead; otherwise you are left out in the cold when the inevitable happens! Have you ever considered Critical illness insurance?
These people might really need insurance and can afford the premiums; however it a priority to consider dying and the security of those they left behind.
Important facts about insurance you should know:
1. Generally, proceeds of a life insurance policy received by beneficiaries after death of the insured are not subject to federal income taxes.
2. Taxes for estates may apply to insurance proceeds.
3. Life insurance policies or original purchase of policies transferred to third party as properly structured gratuity may allowed proceeds to be exempted from payment of escape transfer (gift) or estate taxes.
4. The two main types of life insurance are:
• Term Life is purely a protection covering specified period of time: for example 10, 15 or 20 years.
• Permanent Life provides lifetime protection and in addition as cash value component with two income tax-advantages.
For potential assets to grow, tax is deferred
Ask investment provider assistance to have greater wealth potential via tax-deferral. Find affordable life insurance quotes Canada and be confident to get your expectations:
• For your assets to profit more quickly have current income taxes deferred.
• Have access to alternative investments and sector options etc., as opportunities for investments.
• Provisions for free tax exchanges and free transfers.
Death benefits reduce loans and withdrawals and increase the risk that the policy will lapse). Exchanging cash value of life insurance assets are allowed from one company to another (or even to an annuity) without triggering a taxable event.
Life insurance and taxes
1. Insurance contracts must follow requirements of IRS.
2. Remember that your premiums are not deductible from your federal income tax return.
3. Tax maybe deducted from employer-paid life insurance.
4. Inquire if the premium you paid is either pre- tax dollars or after-tax dollars.
5. Life insurance beneficiary probably won’t have to pay income tax on death benefit received
6. Consult life insurance quotes Canada for inexpensive life coverage so you a policy to be included in your taxable estate life insurance that would not be paid from death benefit received by beneficiaries.
7. Part of the cash value of your policy will be tax deferred.
8. Paid dividends are usually aren’t taxed.
9. Cash withdrawals in excess are taxable
10. Withdrawing part of your cash value will reduce death benefit of your beneficiaries.
11. No need to pay taxes for loans taken against your policy.
12. Death benefit and policy’s cash value are reduced for any loan against your policy,.
13. No interest is deducted from payment of policy loans.
14. In surrendering your policy, you may get taxable gain.
Life insurance tax rules are complicated and often changeable. An affordable life insurance quotes Canada will help you save big on instant insurance policies. Get all information and answer to your inquiries from a qualified insurance provider.