Related Topics:
Presenting life insurance concepts

There are different ways of looking at life insurance markets. One way is to look at it through the eyes of a prospect and focus on what are likely to be key concerns given the age and stage of life that he or she is currently at. On this basis the markets can be described as follows:

Estate Creation
A market made up primarily of younger prospects. They have not yet been able to build an estate through personal savings, but they want to make sure that an estate is available for those they leave behind, if they die prematurely. Preference is usually given five or ten year term to provide the largest amount of insurance for the lowest premium outlay.
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Estate Preservation
Generally middle aged prospects who have succeeded to the point where they have managed to accumulate enough to create an estate and now want to make sure that it stays intact when they die. Their incomes are usually above average and their main concerns are estate settlement costs in general and capital gains taxes and taxes on registered funds in particular. The product of choice is Term to 100 or quick pay universal life for the least possible cash outlay.
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Estate Maximization
Leaving a larger estate is generally of interest to prospects approaching or already in retirement. They have income or capital now, and probably in the future, in excess of life style needs. They wish to protect their assets from taxes while living and at death and, in the process, welcome the opportunity to create a larger estate. The most suitable product is maximum funded universal life to shelter non-registered and registered income or capital and to tax-shelter savings and investments that are probably going to end up in the estate.
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Creating additional retirement income
A relatively new but nevertheless very large market for creating additional retirement income. The following has contributed to its growth:
• increased life expectancy
• reduced dependence on the Government to provide for retirement, and
• reduced dependence on life-long full-time employment to create adequate retirement income.

The tax-sheltering properties of certain life insurance products make them attractive in this market, especially for those who are maximizing RRSP contributions and are looking for tax effective investments. The products can be used to generate the additional retirement income through personal planning or through planning involving a small or large corporation.
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Business insurance
As the number of small businesses in Canada has grown so has the market for business life insurance. As the growing number of businesses mature, thoughts turn to transferring them, intact, to the next generation on a tax-effective basis. Life insurance delivers the liquidity on a tax effective basis at the precise moment it is needed, for a cost known in advance.
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Charitable giving
With Governments cutting back, it is up to the generosity of Canadians to support charitable organizations. Products offered by life insurance companies are remarkably effective and are increasingly becoming the product of choice for this $3.5 billion market.
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Related Topics:
Presenting life insurance concepts