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CH1 INTRODUCTION TO LIFE INSURANCE (This Chapter provides an introduction…

- - - - If developing a retirement savings plan or retirement income plan, the focus would be on the client’s life expectancy
    - - insurance needs analysis, the agent may find it useful to educate a client on his probability of death
- - - - When a person dies, his registered assets (e.g., registered retirement savings plan (RRSP),
        registered retirement income fund (RRIF)) will also be deregistered (unless a rollover applies),
        which means the full amount will be taxed at his marginal tax rate at death, which could easily be
        in the top tax bracket, which ranges from a low of 39% (Alberta) to 53% (Québec), depending on
        the province
  - - - make sure that his children can go to university
        or college, even if he dies.
    - - make a financial gift to someone special upon death
        
        ex a lump sum bequest of $100,000
    - - favourite charity upon their death.Some people also make
        donations for the tax benefits, which will be discussed in Chapter7
    - - The death of a key employee or shareholder can have a devastating impact on a business
- - - - Consider the person who has to
        drive a car because it is his only option for getting to work. He can reduce his risk of having a car
        accident by obeying traffic rules
  - - - EX has the option of buying an the extended warranty or not
        
        however, The risk of death is usually considered to be a high severity risk because of the significant
        financial impact it can have. Most clients will not have sufficient financial resources to be able to
        manage the financial impact of death, so they need another strategy to deal with this risk.