Don’t Let Gaps in Your Coverage Haunt You: Insurance Planning Before Renewal Season
As we head into the final quarter of 2025, most of us turn our attention to year-end tax planning, corporate filings, and investment reviews. But there’s another key area worth a fresh look before the calendar turns: your insurance strategy.
For high-net-worth Canadians, business owners, and professionals, life, disability, and critical illness coverage aren’t just protective tools. They’re strategic assets that can impact estate planning, tax efficiency, and even intergenerational wealth transfer.
The fall renewal season is the ideal time to make sure your coverage still aligns with your needs, and that it’s structured to work as hard for you as your other investments.
1. Why Insurance Reviews Belong on Your Fall Checklist
Insurance isn’t a “set it and forget it” purchase. Business growth, changes in family structure, or new tax rules can quickly make an existing policy less effective - or, in some cases, unnecessary.
A fall review can help you:
Confirm you have enough coverage for current income, business value, and estate goals
Identify policies that may need restructuring for better tax efficiency
Consolidate or eliminate redundant coverage that no longer serves a purpose
2. Life Insurance: Protection, Equalization, and Tax Efficiency
For business owners, life insurance often plays a dual role: protecting your family and serving as a tax-efficient wealth transfer tool.
Estate equalization: If you plan to pass a business to one child but want to leave equivalent value to other heirs, life insurance can provide the liquidity to balance inheritances without forcing the sale of assets.
Corporate-owned life insurance: Holding a permanent policy inside your corporation can offer tax advantages. The death benefit flows to the Capital Dividend Account (CDA), allowing tax-free distribution to shareholders. This can offset taxes on retained earnings or the sale of corporate assets.
Reviewing policy performance: Interest rate changes and market performance can affect policy values, especially for participating whole life or universal life contracts. An annual review can ensure you’re on track.
3. Disability Insurance: Safeguarding Your Income and Lifestyle
If you rely on active income from your practice, business, or executive role - disability coverage is critical.
Fall is a good time to check:
Benefit amounts: Does your coverage reflect your current income and cost of living?
Policy definitions: “Own occupation” coverage can be especially important for professionals.
Integration with corporate structures: Some business owners benefit from paying for disability coverage personally to ensure tax-free benefits, while others may structure coverage through the corporation for cost savings.
4. Critical Illness Insurance: Filling the Gap
Critical illness policies provide a lump sum if you’re diagnosed with a covered condition, such as cancer, heart attack, or stroke.
This type of coverage can:
Fund private medical treatment or travel for care
Replace lost income if you need to step back from the business temporarily
Provide liquidity so you don’t need to sell investments or dip into retirement assets during recovery
As with disability coverage, policy definitions and benefit amounts should be reviewed in light of today’s costs and your personal circumstances.
5. Coordinating Insurance with Your Wealth Plan
Insurance shouldn’t sit in a silo. When coordinated with your overall wealth strategy, it can:
Reduce taxable income in high-earning years through corporate-owned structures
Protect against forced asset sales in the event of death or disability
Ensure your estate plan can be executed without financial strain on heirs
A coordinated review involves your financial advisor, tax professional, and insurance specialist working together to assess coverage within your broader corporate, investment, and estate structures.
The Bottom Line
As renewal season approaches, a proactive insurance review can help ensure your coverage is both adequate and efficient. Whether your goal is protecting income, equalizing an estate, or using corporate-owned life insurance for tax-efficient wealth transfer, fall is the time to make adjustments before rates change, renewals roll over, and year-end deadlines pass.
If you’d like to see how your current insurance strategy fits into your long-term plan, connect with your advisor. We’ll help you align coverage with your business, estate, and personal goals so you can head into the new year protected and prepared.
Disclaimer: This article is for informational purposes only and does not constitute legal, tax, or financial advice. Insurance strategies should be reviewed with a licensed insurance advisor and tax professional to ensure suitability and compliance with Canadian regulations.
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