Life Insurance for Lawyers in Canada

Coverage that protects your family and your firm.

Life insurance for Canadian lawyers serves three distinct jobs: protecting family during the highest-debt years, funding a buy-sell agreement between partners, and building tax-advantaged wealth inside a professional corporation that ultimately flows through the Capital Dividend Account.

Most lawyers carry only group coverage of one or two times salary - far below what a family with a mortgage and dependents actually needs. Individual policies close the gap, are portable across firms, and give you control of beneficiary designations and ownership structure.

SG Wealth Management designs layered life insurance for lawyers that coordinates personal and corporate ownership. See how this fits with estate planning for lawyers.

Three Roles

What Life Insurance Does for a Lawyer

Family Protection

Replace income, retire mortgages, and fund education during the years dependents need it most.

Buy-Sell Funding

Provide liquidity so surviving partners can buy out a deceased partner without disrupting the firm.

Corporate Wealth Transfer

Permanent corporate-owned policies grow tax-deferred and credit the Capital Dividend Account at death.

Term vs Permanent Insurance

Term Life Insurance

Coverage for a defined period - 10, 20, or 30 years
Lower premiums make large coverage amounts affordable for newly called and mid-career lawyers
Ideal for replacing income during mortgage and child-raising years
Convertible policies allow conversion to permanent coverage without medical underwriting

Permanent Life Insurance

Coverage for life with cash value accumulation inside the policy
Higher premiums but fixed for life and tax-advantaged growth on the cash value
Owned by the corporation to fund the Capital Dividend Account
Foundation of estate equalization and intergenerational wealth transfer

Personal vs Corporate-Owned Policies

For incorporated lawyers, a key decision is whether the corporation or the individual owns each policy. Corporate-owned permanent insurance is funded with corporate after-tax dollars at roughly 12.2% rather than personal rates above 50%, dramatically reducing the cost of coverage.

At death, the corporation receives the death benefit, and the amount above the adjusted cost basis credits the Capital Dividend Account. This allows tax-free distributions to surviving shareholders or the estate - the cornerstone of corporate estate planning for lawyers.

See how this integrates with buy-sell agreements for law firms.

How Much Coverage Does a Lawyer Need

A common starting point is ten to twelve times annual income, plus outstanding debt and projected education costs for children. A senior associate earning $250,000 with a $700,000 mortgage and two young children typically needs $2.5 to $3 million in coverage.

For incorporated lawyers, additional permanent coverage is layered on top of personal term to fund the buy-sell agreement and feed the Capital Dividend Account. Coverage should be reviewed at every major milestone - making partner, having a child, taking on new debt, or restructuring a firm.

Coordinate this with financial planning for lawyers to make sure premiums fit cash flow.

Why Work with SG Wealth Management

SG Wealth Management designs life insurance strategies for Canadian lawyers that integrate personal coverage, corporate ownership, and the realities of partnership structures and the Capital Dividend Account.

We work with multiple Canadian carriers to find the right blend of term, permanent, and corporate-owned coverage - and we coordinate with your accountant and estate lawyer so every policy fits the larger plan.

Book a consultation to review your existing coverage and design a layered strategy built for your legal career.