Collateral Financing

Collateral Financing is a financial strategy based on Desjardins Financial Security’s PACE Financial Planning Platform.

It allows one to take advantage of a tax-free lump sum to live their retirement dreams by means of a line of credit granted by a financial institution.

It also ensures the financial security of loved ones by providing them a legacy with the balance of their life insurance policy.

Here’s how it works:

1. You purchase a life insurance policy in which you accumulate tax-free liquid assets that create your savings fund.

2. You use your policy’s savings fund as collateral to obtain a line of credit from a financial institution.

3. You take advantage of tax-free liquid assets provided by the line of credit to realize your retirement dreams. You are not required to repay the interest during your lifetime since they are added to the balance of your line of credit.

4. Upon death, the insurance amount and savings fund are used to repay your line of credit. The balance of the life insurance policy is then paid to your heirs, tax-free.

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