IG Wealth Management Study: Few Canadians Appreciate the Important Role Life Insurance Can Play in Optimizing Their Estate

• The vast majority of Canadians plan to transfer all or part of their estate to the next generation.
• However, only two-fifths are knowledgeable about the tax implications and costs their beneficiaries can assume upon their death.
• Less than two-thirds have a life insurance policy.

WINNIPEG, MB, Nov. 10, 2023 /CNW/ - To mark Financial Literacy Month, IG Wealth Management (IG) released a study today on Canadians' understanding of how life insurance can help optimize generational wealth transfer.

The results find that, while the overwhelming majority (87 per cent) of Canadians plan to transfer all or part of their estate to the next generation, few are aware of the important role life insurance can play to help alleviate associated costs, including taxes that must be paid.

According to the study, conducted by Pollara Strategic Insights for IG:

• Less than two-thirds of Canadians have a life insurance policy.
• Only two-fifths (39 per cent) are knowledgeable about the tax implications and costs their beneficiaries can assume upon their death.
• Just 29 per cent are knowledgeable about the tax advantages some life insurance policies can offer.

The study reveals that many Canadians are unaware of the potential tax burden their beneficiaries could face when inheriting assets such as investments, vehicles and properties.  Having a life insurance policy that is payable on death to one's beneficiaries can potentially offset these taxes and any other related costs to help ensure that the assets remain in the family. Importantly, most life insurance payouts are exempt from taxes.

"We're on the heels of the largest inter-generational wealth transfer in history, so it's important Canadians understand the role life insurance plays to help maximize the value of their estate and minimize tax implications," said Christine Van Cauwenberghe, Head of Financial Planning at IG Wealth Management.

Ms. Van Cauwenberghe further reinforced the importance of leveraging occasions like Financial Literacy Month to build education and awareness. "It's an important and timely opportunity to promote financial knowledge, well-being and resilience," she says.

Integrating Insurance into Your Financial Plan

The study also found that Canadians who work with a financial advisor are more knowledgeable about the features and benefits of life insurance than those who do not (71 per cent versus 50 per cent).

"Without a proper life insurance policy in place, it is possible that an unexpected tax liability may result in fewer assets being transferred to the next generation than anticipated," explains Alana Riley, Head of Insurance, Mortgage and Banking at IG Wealth Management.  "It can be difficult to think about your own mortality and leaving your loved ones, but adding a life insurance component into your wider financial plan is crucial to ensuring that the next generation is set up for financial security and success."

"With the help of a financial advisor, Canadians can integrate their insurance and estate planning into their larger financial plan to ensure that they are maintaining their wealth and safeguarding their legacy," added Mrs. Riley.

About the Pollara Study
This study was conducted with an online sample with 1,006 adult Canadians.  This research was conducted from October 2nd to 10th, 2023. Results from a random sample of this size can be considered accurate to within ±3.1%. 19 times out of 20.

About IG Wealth Management
Founded in 1926, IG Wealth Management is a national leader in delivering personalized financial solutions to Canadians through a network of advisors located across Canada. IG Wealth Management has $113.5 billion in assets under advisement as of October 31, 2023, and is a member of the IGM Financial Inc. (TSX: IGM) group of companies. IGM Financial, together with its subsidiaries, is one of Canada's leading diversified wealth and asset management companies with approximately $250 billion in total assets under management and advisement as of October 31, 2023.

SOURCE IG Wealth Management

English Media Inquiries: Hilary Bassett, 416-951-7558, [email protected]; French Media Inquiries: Kim Tran, 514-217-1684, [email protected]