insured retirement plan (IRP)

An Insured Retirement Plan (IRP) is a financial strategy designed to provide individuals with income and financial security during various stages of their lives. It combines insurance and investment elements to offer individuals a way to protect their retirement savings while potentially generating growth. In addition, this product provides protection for critical illness or living benefits plus free alternative medical opinion. The plan also provides a large sum payout where the life covered has been diagnosed with a life-threatening condition. An IRP is a tax-efficient and cost-effective way to save for retirement or to transfer wealth beyond RRSP and TFSA limits.

Investment Component

The plan includes an investment component that allows individuals to accumulate savings and potentially grow their retirement funds tax-free. The investment component may include various investment vehicles, such as segregated funds or other investment products.



Tax Advantages

Investment growth within the plan is exempt from accrual taxation within the limits specified in the income tax act. 

Estate Planning Benefits

Insured retirement plans offer estate planning benefits by allowing individuals to designate preferred beneficiaries and potentially bypass probate. This can facilitate the smooth transfer of assets to heirs while minimizing estate settlement costs and delays.

Insurance Protection

An insured retirement plan typically includes an insurance component that provides a guaranteed income stream and a death benefit. This ensures that even if the investment portion of the plan experiences market fluctuations, the individual or their beneficiaries will still receive a certain level of financial protection.

Protection from Creditors

In the event of bankruptcy or insolvency, your retirement funds within the insured plan are generally protected from creditors' claims. This means your retirement savings are less likely to be seized to pay off debts.

Retirement Income

The primary goal of an insured retirement plan is to provide a reliable income stream during retirement. This can be achieved through several options. Accessing tax-free income from the plan for a specified period or over a lifetime is possible using the insured retirement strategy.