Comments on: Whole life insurance as investment - a disappearing excellent investment opportunity for retirement planning http://asset-aid.com/blog/2009/06/26/whole-life-insurance-as-investment-opportunity-for-retirement-planning/ Thu, 09 Sep 2010 16:22:22 +0000 http://wordpress.org/?v=2.0.1 by: Julio http://asset-aid.com/blog/2009/06/26/whole-life-insurance-as-investment-opportunity-for-retirement-planning/#comment-5214 Mon, 24 Aug 2009 02:32:51 +0000 http://asset-aid.com/blog/2009/06/26/whole-life-insurance-as-investment-opportunity-for-retirement-planning/#comment-5214 Do you really mean to say that once the ownership is revoked from corporate to personal there is no disposition only becuase the csv"s are at 65.What happens if the transfer happens at age 65 .Then what? Thanks. ----- Thanks for the opportunity to clarify, Julio. Yes, I've heard about corporations having done this move. I believe the stories are true but I have no direct knowledge of the participants. As I understand, they did the transfer not at the time when the CSV appeared, or immediately before it, but a bit, let's say 3 or 4 years, before. It indicates that they certainly wanted to avoid the attention of Revenue Canada, but I still don't think it's necessarily purely a case of exploiting a loophole. I'm not a tax specialist, an accountant or lawyer specializing in taxation, and I'm not aware of any Revenue Canada position on this issue; if you want to get a more definite answer to this detail that you can rely on, I'm not the appropriate person to ask. However, I can imagine that it could be challenged if Revenue Canada assessed a taxable benefit when the transfer of ownership happens years before the CSV appears. It's not only that there is nothing of actual monetary value changing hands then, but even that future value is very much potential only at that point. What if the insured dies or cancels the policy before the CSV is available? The speculation is rather theoretic now, with the disappearance of this particular policy the post was about, ... there are probably no more very similar policies on the market any more; the cash value appears immediately or after just a few years in the remaining ones. Even if the CSV is deemed as taxable income at transfer of ownership, as it does with these policies, the arrangement may make sense in many situations, although not as spectacularly good as this perhaps debatable and risky earlier strategy was. Laszlo Do you really mean to say that once the ownership is revoked from corporate to personal there is no disposition only becuase the csv”s are at 65.What happens if the transfer happens at age 65 .Then what?
Thanks.

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Thanks for the opportunity to clarify, Julio. Yes, I’ve heard about corporations having done this move. I believe the stories are true but I have no direct knowledge of the participants. As I understand, they did the transfer not at the time when the CSV appeared, or immediately before it, but a bit, let’s say 3 or 4 years, before.

It indicates that they certainly wanted to avoid the attention of Revenue Canada, but I still don’t think it’s necessarily purely a case of exploiting a loophole. I’m not a tax specialist, an accountant or lawyer specializing in taxation, and I’m not aware of any Revenue Canada position on this issue; if you want to get a more definite answer to this detail that you can rely on, I’m not the appropriate person to ask. However, I can imagine that it could be challenged if Revenue Canada assessed a taxable benefit when the transfer of ownership happens years before the CSV appears. It’s not only that there is nothing of actual monetary value changing hands then, but even that future value is very much potential only at that point. What if the insured dies or cancels the policy before the CSV is available?

The speculation is rather theoretic now, with the disappearance of this particular policy the post was about, … there are probably no more very similar policies on the market any more; the cash value appears immediately or after just a few years in the remaining ones. Even if the CSV is deemed as taxable income at transfer of ownership, as it does with these policies, the arrangement may make sense in many situations, although not as spectacularly good as this perhaps debatable and risky earlier strategy was.

Laszlo

]]> by: Ian McEwen http://asset-aid.com/blog/2009/06/26/whole-life-insurance-as-investment-opportunity-for-retirement-planning/#comment-4978 Wed, 12 Aug 2009 05:53:55 +0000 http://asset-aid.com/blog/2009/06/26/whole-life-insurance-as-investment-opportunity-for-retirement-planning/#comment-4978 Hey, just noticed that you didn't mention that the paid up 65 eats away the cash value of the policy. Regards, Ian Mcewen --------- Hi Ian, Could you please explain what you mean? Yes, the policy was withdrawn, so in a sense there is not much usefulness in talking about it anymore, but I'd like to clarify if you did misunderstand something, ... which appears to be the case here. I can repeat what I wrote: this policy was payable until age 65. It provided permanent death benefit. There was no cash value until age 65, but there was an outstanding cash value from that point onward. What kind of 'eating away' are you talking about??? Regards, Laszlo, the curious Hey, just noticed that you didn’t mention that the paid up 65 eats away the cash value of the policy.

Regards,
Ian Mcewen

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Hi Ian,

Could you please explain what you mean?
Yes, the policy was withdrawn, so in a sense there is not much usefulness in talking about it anymore, but I’d like to clarify if you did misunderstand something, … which appears to be the case here.

I can repeat what I wrote: this policy was payable until age 65. It provided permanent death benefit. There was no cash value until age 65, but there was an outstanding cash value from that point onward.

What kind of ‘eating away’ are you talking about???

Regards,

Laszlo, the curious

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