AboutLau Succession America
High net-worth individuals are a key demographic when it comes to life insurance. However, with their complicated financial investments and sometimes demanding lifestyle, their life insurance needs can be very complex.
High net-worth individuals are a key demographic when it comes to life insurance. However, with their complicated financial.
Planning is essential for HNWI. Here’s how tax and insurance strategies can ensure your wealth is preserved for future generations.
In this section we cover wealth management strategies for ultra-high net worth investor who needs help with tax minimization.
What We Do Best
Whole Life Insurance
US Life Insurance
Canadian Life Insurance
Permanent Life Insurance
Universal Life Insurance
Benefit of Tax-Exempt
Types of tax-exempt life insurance
A distinguishing feature of permanent tax-exempt life insurance, compared to other types of life insurance such as term insurance, is that these policies may include a cash value. And cash value is quite simply a savings component. The essential differences between these three products involve flexibility and the nature of the investments:
Whole life insurance
Universal life insurance (variable)
Universal life insurance with guaranteed investments
These investment vehicles are permanent life insurance products, which provide life-long insurance coverage and include a savings component. The investment opportunity stems from tax rules found in section 148(3) of the federal Income Tax Act. That’s where it specifies that assets in a life insurance product accumulate free of annual taxation.
This tax-free growth is much the same as tax-deferred investment growth within a Registered Retirement Savings Plan (RRSP). In fact, tax-exempt life insurance is often used by individuals who are maximizing their RRSPs and looking for an additional way to continue tax-deferred investing. In addition to tax-sheltered investing, rules in the Income Tax Act provide for a second tax advantage: Proceeds from the policy, including any accumulated assets, are ultimately distributed to the estate or directly to beneficiaries tax-free.
A high-net-worth individual is a person who owns liquid assets valued at $1 million or more. There is no official or legal definition of HNWI, and the threshold for high net worth is generally understood to include liquid assets only, money held in bank or brokerage accounts excluding assets like a primary residence, collectibles or durable goods.
Financial professionals break down the category into three classifications of wealth
High-net-worth individuals (HNWIs): People or households who own liquid assets valued between $1 million and $5 million.
Very-high-net-worth individuals (VHNWIs): People or households who hold liquid assets valued between $5 million and $30 million.
Ultra-high-net-worth individuals (UHNWIs): People or households who own more than $30 million in liquid assets.