Retirees have different insurance needs of their cadets. Leave a legacy, paying taxes at death, to protect the income of the spouse or prevent it from becoming a caregiver living in poverty are much more concerned about who needs the baby boomers and their elders. In a series of two articles, Finance and Investment focuses on how we can meet those needs.

Pay tax at death

Retirees who have worked all their lives to build their wealth sometimes want to leave to avoid a tax liability on their estate. "The fiscal impact is the death of the second spouse. For example, if I transfer my assets to my spouse or partner, there is no tax on death. If I transfer to my children, there is an impact, "said Dominic Paquette, president and founder of Partner Consulting firm Financial Group, a merchant from SFL Partner of Desjardins Financial Security.

A counselor may fill this need through, for example, a policy of permanent life insurance universal life-type, suggesting Mathieu Lefebvre, financial advisor and regional director of sales and production at Excel Financial Strength. "Take a single 60 year old man who happens to retire with a heritage and any tax bill of $ 250 000. If he dies without insurance, the tax claim that it will take $ 250 000 out of its heritage. With insurance, it could cost him $ 6,000 premium per year to ensure a capital of $ 250 000, "he explains.

This strategy has the advantage of sharing the risk between the insurer and the individual and to generate insurance beneficiary’s immediate liquidity. "With a life insurance policy, called beneficiaries. At the time of death, we make the claim and the check is made directly to beneficiaries without it passing through the estate. It creates new liquidity even if the asset is capitalized, "said Mathieu Lefebvre.

Leaving a legacy

Life insurance can also be a way to leave a legacy to his family. A client may, for example, meet this need through a term life insurance level premium to age 100. "It can be a way of saying:" I take my money, but I take a life insurance in my death, my children have a minimum of Heritage "," says Mathieu Lefebvre.

In addition, more and more customers’ pensioners feel the need to give back to society or a charity, according to Peter Tsakiris, an actuary who works in the Peak Financial Group. He suggests making the gift of a life insurance policy for which the beneficiary is irrevocable agency.

"With a lot less money, we give a lot more money. Take the example of a non-smoking man of 55. Rather than pay a charity $ 100 / month, he contracted a universal life insurance of almost $ 65 000, "he illustrates.

On the tax, the dealer has two choices: either it benefits the deduction on the $ 100 / month for himself during his lifetime or his estate receives a deduction of $ 65 000 at the time of death. The second option allows reducing the tax bill on death. "In both cases, it is excellent for the charity that receives $ 65 000 rather than $ 100 / month," he says.

Protect the living standards of the surviving spouse

The insurance also serves to maintain the standard of living of the surviving spouse. "Often in those who are retiring, Mr. has more assets and pension plan that Madame, because she has less work to care for their children. The impact of the death of Mr. ensured that Madame can greatly reduce their income because, for example, the pension plan is transferable to Monsieur his wife of 50% or 60%, "explains Dominic Paquette. The counselor can then analyze the income from the pension plan and close the gap with a life insurance policy, for example, a temporary 100 years.