{"id":2068,"date":"2026-05-20T18:53:46","date_gmt":"2026-05-20T18:53:46","guid":{"rendered":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/?p=2068"},"modified":"2026-04-10T18:54:37","modified_gmt":"2026-04-10T18:54:37","slug":"insurance-strategies-for-high-net-worth-investors","status":"publish","type":"post","link":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/2026\/05\/20\/insurance-strategies-for-high-net-worth-investors\/","title":{"rendered":"INSURANCE STRATEGIES FOR HIGH-NET-WORTH INVESTORS"},"content":{"rendered":"\t\t
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The RRSP\/RRIF Exit Strategy: Joint Last-to-Die Insurance<\/h3>

Many of us spend years contributing to our Registered Retirement Savings Plan (RRSP) to take advantage of the tax-deferred growth opportunity. Yet we may forget to plan our exit strategy: how and when that money will be withdrawn in the future.<\/p>

The issue? Every dollar withdrawn from the RRSP is subject to tax as regular income. While postponing withdrawals until retirement is often beneficial, because in many cases the individual will be in a lower marginal tax bracket, waiting too long can create other issues. By age 71, the RRSP would likely be converted to a Registered Retirement Income Fund (RRIF), forcing the plan holder to withdraw specified percentages of the RRIF, whether funds are needed or not. In addition, leaving significant RRSP\/RRIF funds to beneficiaries at death can result in a substantial tax liability. If there is no qualified rollover beneficiary, the full value is included in the deceased\u2019s final tax return, which, for many high-net-worth (HNW) investors, can be taxed at the highest marginal rate.<\/p>

Couples: Joint Last-to-Die Insurance as a Solution<\/strong>
If RRSP\/RRIF funds aren\u2019t needed as income in retirement, using joint last-to-die insurance may be a solution. It allows you to reposition assets during your lifetime, while preserving estate value through tax-free insurance proceeds. Withdrawals from a RRSP\/RRIF are taken over time to fund the insurance policy, which may be subject to relatively lower marginal tax rates compared to taxes at death. The life insurance policy helps preserve the after tax estate value for beneficiaries by replacing assets withdrawn and taxed during retirement.<\/p>

How Does It Work?<\/strong>
Consider the situation in which a couple is planning to leave their estate to their children. Each spouse can designate the other as the beneficiary of their own RRSPs and purchase joint last-to-die life insurance with the children as beneficiaries of the
insurance policy.<\/p>

At retirement, withdrawals from the RRSP or, later, the minimum RRIF withdrawals, can be used to pay the insurance premiums. By making use of the spousal rollover provision available, there will generally be no RRSP\/RRIF-related taxes due on the death of the first spouse, as the RRSP\/RRIF will transfer to the other spouse without tax implications. Upon the death of the surviving spouse, insurance proceeds will be generally paid out tax-free to the beneficiary(ies).<\/p>

This strategy may help manage or reduce overall lifetime and estate tax exposure in certain situations. In many cases, joint last to-die life insurance can help preserve or enhance the value of an estate. In provinces where estate administration tax (or probate) is assessed, there may be additional savings as life insurance proceeds bypass the estate.<\/p>

\"\"The proceeds paid out from the joint last-to-die life insurance policy can be designated to offset future tax liabilities. For example, the insurance policy proceeds can cover taxes arising from the deemed disposition of capital assets, without requiring the liquidation of the estate assets to fund the tax liability. Alternatively, proceeds can be used to create a legacy by naming a charity as the designated beneficiary.<\/p>

\"\"The joint last-to-die policy is often more cost-effective than the purchase of two individual single life policies since the insurance company does not plan to pay out the proceeds until further into the future, and it will only need to pay this out on one policy rather than two.<\/p>

Determining if life insurance can play a role in your estate plan will depend on your circumstances and your future goals. Given my\/our<\/span> familiarity with your investments, I\/we<\/span> would be pleased to provide perspectives on this, or other insurance-related matters.<\/p>

\"\"<\/a><\/p>

The information contained herein has been provided for information purposes only. The information has been drawn from sources believed to be reliable. Graphs, charts and other numbers are used for illustrative purposes only and do not reflect future values or future performance of any investment. The information does not provide financial, legal, tax or investment advice. Particular investment, tax, or trading strategies should be evaluated relative to each individual\u2019s objectives and risk tolerance. This does not constitute a recommendation or solicitation to buy or sell securities of any kind. Market conditions may change which may impact the information contained in this document. Wellington-Altus Private Wealth Inc. (WAPW) does not guarantee the accuracy or completeness of the information contained herein, nor does WAPW assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Before acting on any of the above, please contact your financial advisor. Transactions of the type described herein may involve a high degree of risk, and the value of such instruments may be highly volatile. Such risks may include without limitation risk of adverse or unanticipated market developments, risk of issuer default and risk of illiquidity. In certain transactions prospective investors may lose their entire investment or incur an unlimited loss. This brief statement does not disclose all the risks and other significant aspects in connection with transactions of the type described herein, and prospective investors should ensure that they fully understand the terms of the transaction, including the relevant risk factors and any legal, tax, regulatory and accounting considerations applicable to them, prior to transacting. The information contained herein may include the opinions of representatives of third-party companies or organizations and may not necessarily reflect that of Wellington-Altus (WA) or its representatives. All third-party products and services referred to or advertised are sold by the company or organization named. While WA may have referral arrangements with some third-party companies or organizations, WA does not specifically endorse any of these products or services and is not liable for any claims, losses or damages however arising out of any purchase or use of third-party products or services. All insurance products and services are offered by life licensed advisors of Wellington-Altus Insurance Inc. or other insurance companies separate from WAPW.<\/span><\/p>

\u00a0\u00a9 2026, Wellington-Altus Private Wealth Inc.\u00a0 ALL RIGHTS RESERVED.\u00a0 NO USE OR REPRODUCTION WITHOUT PERMISSION. www.wellington-altus.ca<\/span><\/p>

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There are many reasons to consider a Registered Education Savings Plan (RESP) to save for a child\u2019s future education: tax-deferred growth within the plan, earnings taxed at the child\u2019s tax rate when eventually withdrawn and, of course, the Canada Education Savings Grant (CESG).<\/p>\n","protected":false},"author":68,"featured_media":1336,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_oasis_is_in_workflow":0,"_oasis_original":0,"_oasis_task_priority":"","_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[27],"tags":[258,267,260,67,259,144,79],"class_list":["post-2068","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","tag-capital-gains","tag-financial-advice","tag-financial-freedom","tag-financial-planning","tag-wealth-advisory","tag-wealth-management","tag-wealth-planning"],"_links":{"self":[{"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/posts\/2068","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/users\/68"}],"replies":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/comments?post=2068"}],"version-history":[{"count":4,"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/posts\/2068\/revisions"}],"predecessor-version":[{"id":2072,"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/posts\/2068\/revisions\/2072"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/media\/1336"}],"wp:attachment":[{"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/media?parent=2068"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/categories?post=2068"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/smokinbulls\/wp-json\/wp\/v2\/tags?post=2068"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}