Case Study 7
Insurance Planning for a Dental Practice Owner
MEET
Steven, a 45-year-old dentist who owns a successful dental practice valued at $5 million. He is married with two young children, and neither he nor his wife had life insurance. Steven’s wife takes care of the bookkeeping and is a stay-at-home mother. The corporate assets are utilized as collateral for bank loans used to fuel company growth. They also own a home in Richmond Hill worth $1.5 million, and Steven’s RRSPs are valued at $150,000.
THE PROBLEM
Steven recognized the potential tax implications of his estate and sought to optimize his wealth preservation strategy. While he possessed valuable assets, he lacked liquid cash reserves. It was essential for him to safeguard his wealth for future generations. Additionally, he was concerned about the financial risks his young family would face if something were to happen to him, as his growing estate and leveraged debt could result in a significant tax liability upon his death.
THE SOLUTION
To address Steven’s concerns and optimize his wealth preservation strategy, we implemented a personalized life insurance plan designed to reduce his tax liabilities by $2 million. Furthermore, critical health insurance was included, providing a $500,000 benefit in the event of a diagnosis of one of the 25 outlined illnesses. This coverage offered his family the much-needed financial security they deserved. Additionally, by structuring an Immediate Financing Agreement (IFA), Steven could continue investing in his business, directing funds toward growth rather than insurance premiums.
The life insurance policy not only offered protection but also provided an attractive return on Steven’s investments upon his passing. With no market risk or interest rate fluctuations, the strategy guaranteed a significant return, ensuring the preservation of his wealth for future generations. Crucially, the insurance proceeds would be received tax-free by his chosen beneficiaries, safeguarding the family’s financial well-being.
By implementing this comprehensive insurance plan, Steven successfully mitigated his tax obligations while securing the financial future of his loved ones. The strategy provided peace of mind, knowing that his estate would be protected and his wealth would be preserved for the benefit of his family.
Are you a dental practice owner seeking to optimize your wealth preservation strategy and protect your family’s financial well-being? Our personalized insurance planning solutions can provide the security and peace of mind you need. Contact us today to explore how we can assist you in preserving your wealth and ensuring a prosperous future for your loved ones.
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