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Creating cash flow solutions in uncertain times

Activate assets to maintain financial flexibility.

As higher inflation continues to impact everything from grocery prices to mortgage rates, Canadians are feeling the financial squeeze. More than half of the respondents to the Manulife Bank 2022 Fall Debt Survey said their spending is outpacing their income, 48 per cent reported feeling overwhelmed by their financial situation, and 79 per cent worry about saving for their retirement.1 

As economic concerns rise, cash flow may also become an issue – with the potential to affect future financial goals. During times of economic uncertainty, the value of advice is more important than ever. Help your clients understand how their existing assets can be used to create cash flow solutions to help them pursue their financial plans confidently. 

The following examples illustrate how Manulife Bank lending solutions and strategies involving investments, insurance and real estate assets can help address cash flow needs.  

Home equity 

Brandon and Tina* are married homeowners in their mid-30’s who want to upgrade their nest.  Because of the rising cost of home ownership, they’re considering some significant renovations to increase the value of their home and to generate income from the addition of a rental unit.  The couple meets with their advisor to consider their options. Income and assets are assessed: 

Graphic: Home Equity strategy

Strategy: Leverage the couple’s non-registered investments.

Since their home holds little equity, and their life insurance has no cash value, leveraging their investments is a smart strategy.

A line of credit (ALOC) attained by using their $200,000 portfolio in non-registered investments as security helps them access up to 50 per cent loan-to-value (LTV)—as much as $100,000, to cover a $75,000 renovation and leave some cash in reserve, for incidentals.  

  • By leveraging their investments to secure a line of credit, they avoid tax implications.2 
  • By not liquidating their non-registered investments, they can continue to grow wealth.

Cash flow implication: The ALOC allows them to pay as little as ‘interest only’ amounts in months when cash flow is tight and is fully open to repayment when cash flow is positive.  


Martha* is a single, divorced corporate executive who is planning for her retirement. At her current age of 60, Martha would like to shift to a four-day work week and officially retire at age 65. 

Moving to a shorter work week means that she’ll need to supplement her income to ensure cash flow in retirement. Martha meets with her advisor to discuss the best path forward. Income and assets are assessed: 

Graphic: Retirement strategy

Strategy: Leverage the cash value of Martha’s life insurance policy. A line of credit is secured by the whole life cash surrender value (CSV), which can be structured as an Insured Retirement Program (IRP).  Martha can access her policy’s CSV without surrendering the policy itself. Because no withdrawal is being made from the policy, no taxes are triggered.3 

Without depleting the equity in her home or liquidating investments that trigger income tax, Martha’s assets will continue to grow in value.

Cash flow implication: The IRP requires no minimum monthly payment (while the loan remains in good standing), ensuring Martha’s cash flow is not negatively impacted.  

Legacy planning

Michael* is 49, married, has three children, and is a cardiovascular surgeon who wants to plan ahead for his family. 

Michael wants to confirm that his life insurance coverage aligns with his increased wealth and wonders if his current Term-20 purchased 20 years ago is adequate. Wanting peace of mind, but to also maintain cash flow to fuel his investments, Michael meets with his advisor. Income and assets are assessed: 

Graphic: Legacy planning strategy

Strategy: Insurance-based investing. An immediate financing arrangement (IFA) fulfills Michael’s significant permanent life insurance needs based on his high income while minimally impacting cash flow he can channel into investing. Once the policy is in force, Michael can borrow an amount equivalent to up to 100 per cent of the CSV each year. Michael can use the credit facility to grow his non-registered portfolio and invest as he sees fit.

  • He can now protect his family with higher life insurance coverage that doesn’t expire.
  • Because the CSV grows3 each year, Michael can unlock that growth to further invest.

Cash flow implication: The IFA strategy frees up cash flow that would have been used to pay the insurance policy’s substantial annual premium. And, with the policy’s significant cash value securing the credit facility, Michael can access funds to continue building his investments and business.4 

Manulife Bank lending solutions 

By leveraging your clients’ existing major assets (real estate, life insurance, investments), you can provide them with powerful cash flow solutions that help deliver the financial flexibility and confidence to pursue their plans today and in the future.  

Learn more about these strategies and other Manulife Bank lending solutions

Graphic: Manulife Bank lending solutions

1 Manulife Bank 2022 Fall Debt Survey

2 Clients should consult their own tax advisors with respect to their specific situations.

3 The CSV growth of a whole life policy is dependent on several factors, including but not limited to, how the policyholder funds the policy, how linked investments perform, dividend scales on participating policies, changes to premiums or face values during cyclical reprices, the payout of non-death benefits, and increases in premium taxes. It is possible for the CSV to see no growth, or even to decrease.

4 Clients should consult their own tax advisors with respect to their specific situations.

* Sample cases for illustration purposes only. 

The persons and situations depicted are fictional and their resemblance to anyone living or dead is purely coincidental (unless otherwise noted). This scenario is for information purposes only and is not intended to provide specific financial, legal, or other advice and should not be relied upon in that regard. Individuals should seek the advice of professionals to ensure that any action taken with respect to this information is appropriate to their specific situations.  





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