Capital Gains Tax Protection

The program asks you to enter assets, their Adjusted Cost Base, Fair Market Value and expected future growth rate. It calculates the capital gains tax payable and expresses the cost of the insurance to pay for taxes as a percentage of the assets they protect.

How to create the optimum illustration

Make sure that the future growth rate of the assets that are entered is realistic. Growth rates that are in tandem with expected future rates of inflation are recommended. Ideally, you should be able to illustrate coverage that keeps pace with future increases in the prospect's exposure to capital gains taxes. A maximum funded universal life policy usually does it if premiums are payable for a minimum of 10 to 15 years.

An Income Shelter illustration, when presented together with a Capital Gains Protector illustration using the same figures, works well when closing the sale. The first illustration shows the tax liability and points out that to protect the assets generally requires less than 1% of the value of the assets that are being protected for the investment in the insurance policy. The Income Shelter shows in the most effective manner possible that making an investment in the insurance policy produces far better results for the estate than investing the same amount in an alternative investment.
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