Well folks, the times they are a changing, and along with it is the insurance industry as a whole. This will affect the efficacy of the Million Dollar Baby Savings Plan, or in technical terms, participating whole life insurance policies, in the coming year.
There haven’t been a lot of changes in the insurance industry in the last 30 years or so. The changes that are coming in the new year include a change to mortality tables (people are now living a lot longer), which will cause life insurance rates to go up, way up! This will reduce the cash value of the Million Dollar Baby Plan.
There are also new tax rules being introduced by the CRA, which will affect the savings inside these participating policies. The cash value inside the policy will still grow, free from annual taxes, up to a maximum amount. However, the new rules will reduce the maximum amount of long-term, tax-exempt savings allowed inside new policies.
Policies that come into force before the new tax law come into effect, will be grand-fathered and follow the current tax-exempt rules.
Don’t miss out on this amazing savings strategy for your child! Book an appointment today with one of our advisors and enhance the savings potential for their future!