Insurance Working Paper Questions

Owner/Manager Clients

Reviewing with clients the financial implications their death or disability, or that of a key employee, could create for their family and business is an important part of the firm’s effort to assist clients to identify, quantify and third party these risks.

The following questions are intended to assist you to assess these risks and if the client should be referred to a firm approved disability and/or life insurance specialist. 

Death or Disability of Client – Now

1) Estimate the decline in valuation, liquidity needs and the ongoing viability of the business from the potential loss of customers, suppliers or employees and creditor demands that may all occur following the client’s death or disability.  Is there sufficient life or disability insurance in force? 

Yes. Proceed to next question.

No.  I have recommended the client review their coverage with a firm approved insurance specialist.

2) For death only, estimate the liquid funds needed to satisfy financial demands such as CRA terminal taxes, funding a buy/sell agreement, income replacement, debt retirement and children’s education.  Is there sufficient life insurance in force? 

Yes. Proceed to next question.

No.  I have recommended the client review their coverage with a firm approved insurance specialist.

Death of Client – At Life Expectancy

3) Estimate the liquid funds required to satisfy estate taxes, preferred share redemptions or estate equalization amongst family members.  Has the use of corporately owned permanent life insurance to fund these or alternatively maximize the after tax estate value been considered?

Yes. This review section is complete.

No.  I have recommended the client review these strategies with a firm approved insurance specialist.