Life Insurance in the US

Another area often overlooked when making the transition to the US is life insurance (covers the risk exposure if the primary breadwinner dies).  All of your policies should be reviewed with an experienced eye to ensure you have adequate coverage and avoid income/estate tax issues.  For example, your life insurance coverage drops significantly as soon as you take up residency in the US . How? If you need $500,000 in Canada to cover your needs and you move to the US , now you only have $375,000 in US dollars at a $0.75 exchange rate!  This may leave you underinsured in covering this same risk exposure in the US. 

In addition, many Canadians are unaware that life insurance is included in your estate unless it is structured properly.  As a result, a $500,000 life insurance policy can be added to your estate and taxed at rates of up to 50%, leaving less for your heirs (see estate planning section for more details).  If you decide to collapse your life insurance policies in Canada and take out the cash value, now you have a taxable event that is subject to tax in both Canada and the US. As you can see, the complexities surrounding a simple item such as life insurance is often overlooked.  As outlined in the About US section, we are fee-only planners and typically recommend the type of policy you need (vs. the type that generates the most commissions). We can also provide you with our network of trusted insurance professionals where you can get life insurance at very competitive rates here in the US.