There is a common statement that most financial planners use in communicating with their clients. "It is not how much money you make but how much after-tax money you end up with". In other words, use every tax planning strategy you can come up with.

Two of the major ones that we have included are the use of Spousal RRSP's and the use of Leveraged Loans.

In addition, to these investment approaches, you might want to consider these insurance based strategies.

Legacy Bond

Situation: You have set aside money to create a financial legacy for your heirs. As a caring and prudent investor, you require that the capital is preserved which means you do not want to take any risk with your assets. So you invest in conservative, low growth producers and highly taxed investments like GICs which by definition means you are paying the growth from the GIC's at your maximum marginal tax rate. One of your goals is that you would like to maximize the amount you set aside for your heirs.
Strategy: You use the growth from the assets or even a portion of the capital of the money to buy the largest possible tax-free death benefit and pay the least for it (e.g., the monthly minimum premium) to minimize the cash flow.

Insured Annuity

Situation: You have set aside a substantial amount of non-registered assets and you want income guaranteed for the rest of your life. Your other goal is to not erode your capital as you want to leave it to the kids. So, the best option you know is to invest in GICs and spend the after-tax income.
Strategy: You buy a life annuity for guaranteed lifetime income using what we call a Prescribed Annuity Contract. Only a portion of the income is taxable. This strategy in most cases, will provide you with not only more after-tax income than the GIC but also will provide enough extra cash from the annuity income to buy permanent life insurance to replace the original investment in your annuity. This gives you more after-tax income and restores your capital upon death.

Insured Retirement Strategy

Situation: You have extra cash flow each month and you want to invest it to supplement future income during retirement. And at the same time, you want to minimize tax on your investment growth.
Strategy: You transfer liquid invested assets or income into a universal life insurance policy for tax-free growth. You get tax-free income later by assigning the cash rich policy to a bank as collateral for tax-free loans. The loans are repaid with the tax-free death benefit.

Estate Protection

Situation: You want to maximize your estate for your heirs by eliminating or offsetting the effect of capital gains from your cottage or other assets. Maybe you want to cover the taxes on your investments, RRSPs, RRIFs, etc.
Strategy: You buy life insurance for the projected tax liabilities and other expenses due at life expectancy. If you have a spouse, the lowest cost approach to do this is to use a Joint Last To Die policy which only pays out the death benefit when both of the insured die.