If there’s one thing the Insurance team at Interior Savings wished you knew, it would be that life insurance is an affordable asset that can be leveraged to save you money.

We talk to many members about car insurance, home insurance, travel insurance… but how to protect your hard-earned money and the people left behind when you die… that’s simply a harder conversation to have, for many reasons.

We don’t like talking about mortality, but we DO like to have meaningful, relevant conversations with our members about income and asset protection as part of their financial plan. We get to know our members, discuss their goals, walk through scenarios, crunch the numbers, and discuss what they could save with the right policy in place.

Most of our members are surprised to learn that talking about life, critical illness and disability insurance early can save a lot of money, hassle, and headaches later on.

Here are three examples of the types of conversations we have with members all the time. We’d never share actual details about our members’ financial choices, but these stories illustrate how a straightforward insurance policy can make a significant difference to your financial planning and peace of mind.

  1. Greg is a high-school principal with a pension, and he’s getting ready to retire.

Greg needs to choose how to receive his pension benefits. He can choose a ‘single life’ option, paying him the largest monthly benefit, but all payouts end when he dies. If he predeceases his wife Margaret, she won’t have any source of income from Greg’s pension. On the flip side, Greg can choose a lower monthly payout, leaving Margaret with ongoing income after he dies, but they’ll have less money to spend in the early years of their retirement when they’ll be most active. How does Greg choose between a bucket list of travel destinations, and ensuring Margaret continues to live comfortably?

When Greg and Margaret spoke with their Interior Savings advisor, who ran clear numbers on their various options, they found a solution. They would opt for the higher payout, which would fund their plans and hobbies and leave enough for a life insurance policy.  This gave them both peace of mind, knowing they could live life to the fullest now, while a healthy tax-free payment was in place for the future.

  1. Lisa owns a law practice with two other partners.

She knows her spouse, head chef at their city’s convention centre, has no interest in inheriting her work or joining the business when she dies. Lisa’s Interior Savings advisor raised the issue of succession planning when Lisa was in to discuss a business loan. Lisa thought she had that all figured out, because she had named her spouse as the sole beneficiary of, well, pretty much everything in her will. Her advisor pointed out, though, that on the death of any of the partners in her firm, the surviving spouse suddenly inherits the complex job of deciding the fate of the company, and, if it is to continue, assessing the value of their share and negotiating a buy-out from surviving partners.

Lisa agreed to talk to her partners right away about a policy that would pay out fair value to any surviving spouse, without forcing the other partners to use company capital to cover the costs.

  1. Jim’s parents both turned 71 last year.

Although Jim and his siblings are the named beneficiaries on their parents’ Registered Retirement Income Funds (RRIFs), they won’t inherit that money.

If Jim’s dad predeceases his mother, all money goes to Jim’s mom tax-deferred. When Jim’s mom dies eventually, all investments held within the RRIF are liquidated, the entire estate is taxed on its total value at the corresponding tax rate. Which means that if the estate value exceeds $200,000, it will be taxed at BC’s highest rate – 47.7%. The RRIF investments don’t actually pass to Jim and his siblings; what’s left after the estate is liquidated, and taxed, is what they inherit.

But Jim’s parents have set things up a little differently. With their house paid off, modest expenses, income from pensions, Canada Pension Plan, Old Age Security payouts, and the mandatory minimum Registered Retirement Income Fund withdrawals, Jim’s parents have money left over each month. (This income is taxed at a much lower rate – Jim’s parents are not in the 47.7% bracket these days.) So they’ve been investing the surplus in a life insurance policy, which will be paid out to their children tax-free when they die. When they worked with their advisor through the various scenarios, they discovered this was the best way to live life fully, and leave a larger amount for their kids to inherit.


Every family is different in their lifestyle, needs and wishes. But every family can benefit from some helpful advice. We’d love to have a conversation about estate planning, tax implications, and whether insurance should be a part of your asset mix. Book an appointment today with one of our Insurance and Investment Advisors. We’re happy to help.

Book An Appointment

Article contributed by Allister Jones, Estate Planning Specialist, Insurance & Investment Advisor at Interior Savings Estate Planning Inc.