Case Study - Chiropractor

Data: Female, age 38, non-smoker

Concerns

Needs & Wants:

• Insurance to cover unexpected disability and/or illness
• Life Insurance to protect her family and to cover her debt & mortgage
• An early retirement strategy
• Tax sheltering
• Assets to cover future estate taxes

Goals:

My client shared with me that she wanted to retire early at age 52.   She had just moved and wanted her life insurance to cover her new mortgage, existing debt as well as leave her family with an inheritance.

As she was well into her professional career as a chiropractor, she felt she now could set aside $3000/mth as a retirement investment from now until age 52, she also wanted the ability to tax shelter all this money and be able to use it in fourteen years to supplement her income.

It was also important to her to be able to keep the family cottage in the family.

How did I help?

• In addition, she has a valuable Critical Illness policy that will protect her financially against the diagnosis of 23 critical illnesses. (eg. Heart attack, stroke, cancer)   The policy will pay out a lump sum, TAX-FREE  payment of $100,000 (even if she can return to work)     Note:  This was added as a rider to her life insurance policy, saving money on administration costs
• Another item added to her policy was a disability payment rider.  This means that in the event of a disability, the insurance company would continue to put $1000/mth into her life insurance policy for her. (protecting the policy from lapsing, and still grow)
• In addition, she now has a brilliant Universal Life Insurance Policy.... I say brilliant because this is where magic happens!
• It will pay TAX-FREE $1.2M (plus all cash value) to her beneficiaries should she die prematurely AND if she should live a long and healthy life, she now can look forward to a TAX-FREE retirement income at age 52 of over * $87k/year!
• Can you say, BRILLIANT?

*invested $3000/mth into her policy, showing a ROI of 7% plus 1.56% bonus, after costs for insurance is  paid the remainder is invested monthly into mutual funds

Outcome:

• Financial protection for her and her family in the event of illness, injury and death
• A TAX-FREE retirement income of over $87k/year from age 52 - 100 (leveraging strategy used with cash value in policy)
• At age 52, cash value of insurance is $872k, and death benefit of policy is now $2.3 M (combination of cash value and life insurance)
• Client stops paying into the plan at age 52, a total of $432,000 (since age 38) 
• All monies in cash fund grow TAX-FREE
• All monies in cash fund is creditor protected
• At time of death, ALL funds (cash value and death benefit) passes TAX-FREE to beneficiaries, and all by-passes Probate
• Eg. If death occurs at age 77 - family receives $2.2 M 

"        "     "  age 88 -    "         "           $1.9 M

• Unlike a Will that is public knowledge and may be probated, life insurance proceeds will by-pass Probate and is a private document
• At an early age her estate needs have been addressed.  There is enough life insurance today for her family and tomorrow as well.  Any capital gains can be paid from proceeds of life insurance.  The cottage stays in the family.  Her wealth will be transferred to her children....and NOT the governments!

This system can work for everyone!  How can I help you?