37. The True Need for Life Insurance Plus The Power of Infinite Banking

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Okay. Happy Friday. Happy Friday to everybody on the YouTubes, the Facebooks, the.

In what other platforms would they be on?

The Insta. Which mah.

The Instagram.

The.

The Instagram. We want to say Happy Friday and Happy Belated Canada Day.

Boy, the awards program, the award show, the Grammys would go a lot faster if they were all Instagrammies. Like, oh man, that was a, that was a really quick awards program. And the award goes to you. And to you. And to you.

The Instagram. Happy Belated Canada Day. We want to, we want to welcome you back to another edition of Wealth Without Bay Street. Now again, we always go back to. It is Friday for us. Now it may not be Friday for you when you're actually listening to this episode.

In fact, if you're listening on the podcast, it could be maybe two months after Canada Day, in which case we still hope you had a really good candidate.

Yes. So today, you know, we're going to have a really good conversation about the importance of being life insured.

Yep.

And.

You know, it just takes on so many different. The conversation could go down so many different paths. But I think one of the things that is important for us all to remind ourselves of is that that day is going to come when we're going to graduate where death will come. And we don't know what anyone's best before date is, but we do know that that day is going to come.

And they tell me that those labels are suggested anyway. Well, best before dates.

Oh, it's just a suggestion.

It's just a thought.

But what's really interesting is, and Rich, I think you would agree, the people that we meet with, who they're investigating a process. Okay, so we're not talking about the life insurance as a tool, as a product, but people who are introduced to us and they're investigating this process of becoming your own banker, the infinite banking.

Concept, perhaps a listener on the podcast or preferred by an existing client or they've come through, they've heard us on, as a guest speaker on someone else's podcast or whatever that medium is. And, and they, they come up and they're, they're reaching out to us or booking appointments in our calendar for that reason. That's what they want to discuss. Yeah, but when that discussion comes up, you can't have that discussion appropriately. Number one, if we're licensed in the industry and we have to, you know, be mindful and we're looking after trying to do the best thing for our client, Right. We have to, you know, be looking at their overall need and we have to try to make sure they're aware and understand what their needs for coverage are.

Right.

We need to make a recommendation about that.

Right.

Have a great discussion about it. And then we also need to. Okay, well, here's your banking thing that you want to get done. Here's your objectives. Now here's this wrapper of insurance around there that's going to help accomplish some of that. Do we need to tweak and augment that? Do we need to adjust the insurance to make sure the coverage is also. Makes sense, right?

Yes. And when you think of life insurance, one of the. Here's an analogy. You know, you might have heard this before. So there's a. There's a farmer, a hog farmer, okay. And he's delivering. He's delivering these hogs to their final destination, none of whom are life insured.

To the place, the place where they make bacon.

And, and there is. There's a really horrible accident.

Okay.

And the truck, the transport trailer is completely destroyed.

Would that be the same thing that happened to the logging truck that Nelson used to talk us about?

Vaporized.

They got vaporized by the space aliens.

So this, this hog transport went horribly wrong.

Yeah.

Okay. The. The truck is destroyed. The hogs unfortunately didn't survive the accident and neither did the farmer who was driving the truck. Right now. The truck was insured?

Yep. Had to be.

Precisely. The hogs were insured. But the most important asset on the farmer's balance sheet, the farmer wasn't right. And all too often we see in our society, for whatever reason, that human life is the value of ensuring. In this case, the farmer's life was completely de emphasized and everything else was prioritized. And we take a different position on that and we bring that to light. I'll give you another example. Can I share another quick example?

Well, I don't know if I have enough time, so.

So I had a client, a client who referred her daughter, okay. And her daughter had recently given birth to their first child and her and her husband attended. Met with me here at the office.

Got it.

And she said, you know, my mom suggested that it would be a good idea for us to be introduced and we want to have a conversation about life insurance. So we hadn't even entered into the realm of the process of becoming your own banker, the infinite banking concept.

Right. Which is not, as we already described, not the normal method that seems to us.

Exactly, yeah. So I said, hey, you know what, of course, happy to help. And as a favor to your mom, I'd love to have a conversation with you. And so we're going through this discussion now. They both showed up to the office in separate vehicles.

Got it.

And we have this conversation. I establish a bit of a fact pattern I'm getting clear on, a need starts to emerge. And I said, well, preliminary, just based on what we talked about, I think we're going to need $1.2 million of life insurance. And these are the reasons why. And.

The conversation was about term insurance, which for those listeners who aren't familiar with term insurance, you're renting an insurance benefit for a specified window of time, and so you're getting a lot of death benefit, which is an amount that is paid tax free upon the death of the life insured.

Right.

And you can purchase a whole lot of death benefit for very little amount.

Of money for a period of time. And at the end of the time frame, the cost jumps up because you're.

Now older and closer to your projected death day.

Eventual death. Yeah.

And.

So she said to me, after we went through this process, she said, well, my mom is doing something a little bit different. And she's also talked about how she's able to save money and then she's able to accumulate money inside of her insurance policy. And then she said something that was pretty profound. She said, the death benefit benefit really just doesn't matter to me.

And so I thought to myself, okay, that's a very interesting statement to make. There's no existing life insurance in place. This is all about talking about why people need it.

Right.

So I expressed to her, I said, I've considered the conversation that we've shared up to this point, and I hate to end meetings late, but sometimes they need to end early. I don't think I'm going to be well suited to work with you, but it was a real pleasure. I'll have to thank your mom for thinking well enough of us to suggest that we be introduced. Well, she was taken aback, very surprised. Oh yeah, like what? What are you talking about?

You're an insurance individual. That won't help me get insurance.

And I said.

We had some discussion. And I said, well, let me express it to you this way. If you and your husband left this office now, you both showed up in separate vehicles. Now you leave, he leaves. He is involved in a fatal accident. He's T boned by a drunk driver at the intersection right outside the office.

Who happened to be hauling hogs.

Right same time.

And.

I leaned in and I asked, I said, if I was your attorney.

Would you prefer that I sue for Nothing or for $1.2 million? And something clicked. She said, I understand. And because we deal with so many families and I have a real soft spot totally for, for families with young children. It's, it's just a soft spot.

And we've seen it happen so many times. We hear about it all the time. There's always a GoFundMe page somewhere. You know, insurance is the original GoFundMe page.

But I mean it's, it's, it's so unnecessary if proper planning is done.

It's very, it's so, it's so easy to do. It's such an easy problem to solve with just a little bit of foresight, a little bit of commitment. That's it.

Yeah. And so they're now wonderful, amazing clients. They're practicing the process of becoming your own banker, the infinite banking concept. They are properly life insured so that they can sleep easier at night knowing that heaven forbid, if the unthinkable happened, there's a big tax free windfall that's going to show up when it's needed most. That's the beauty among many of what we get to do. We get to guarantee dollars for pennies.

Yep, dollars for pennies a piece.

My goodness. So that, that's just one story that's so profound because if you're listening and watching and you're thinking to yourself, I really don't need life insurance.

I think that before reaching that conclusion with such limited information that there would be no downside to having a conversation with any life license advisor. Yeah, right. We, with all due respect to our colleagues out there in the industry who do great work for their clients, who focus on life insurance solutions.

Just the general, most common kind of thread, I would say.

Right. And speak to somebody who knows what they're doing and just, have, just have that open conversation of, hey, you know what I'm really thinking, I don't need this, but maybe there's something I don't know.

Well, here's. And here's, you know, take that a little bit further. So you're. Think about. If you're listening to this, you're watching us on the Facebook Live or whatever it is. If you just think for one moment how many times, think about the people that, you know, extended family, friends and their extended families. You. You. You build relationships that are so tight and so powerful with people, and sooner or later, usually once a year, once every two years, someone in that extended network that's close to you or. Or by proxy, extremely close to someone who's close to you. Right. Someone that, you know, you've had dinner with them, you were at a party with them, you've met them at an event, you know this person and you find out that they've got, you know, whether it's. Maybe it's a cancer scare or there's. There's something that's happened, a medical thing that's come up or, Or a complete accident as Jason identified. It's the, you know, the, the truck with the hog guy in an accident, and that person, heaven forbid, is just no longer with us anymore. Their times come a little bit early. We don't know when that's going to happen. It's impossible to determine. But what we find is we always end up seeing, well, geez, you know, they. They really had to struggle because they didn't have money coming in to pay the bills. I mean, they were emotionally distraught. You know, they had to clean up this whole big mess. They had to deal with the final tax return. They had to plan the. The final, you know, the funeral arrangements. All those things that they're. They're heavily emotionally laden. Things that happen in a very short period of time. Yep. It's a huge amount of chaos, a ton of pressure on any human being or group of human beings that are dealing with it. It's a. It. You can't get around that. The emotional impact is just. It's. It's palpable, it's profound. And so one thing that can come in and it can take the pressure off, it can ease that pressure dramatically. And we've seen that happen many times is when the insurance company shows up with a check and says, hey, here's, you know, here's your $500,000. Here's your million dollars. You know, we can't replace the. Your loved one. Yeah. But we can at least solve some of the financial problems that come up because that loved one isn't here anymore.

Absolutely. And we've had to deliver death benefit. And we take that duty of care very seriously.

Yeah.

And we haven't had a single family yet. Say we wish the check was for less than what you've showed up with.

Right.

It's money that shows up when it's needed the most. You share none of it with Revenue Canada. And the family can take the time to grieve to, you know, to take advantage of bereavement counseling, all that stuff. All of those.

Often that's included as part of the benefit. Part of the benefit, yeah.

And another, another piece there, Richard, is that.

Think about this.

Do you know someone or some people that you would die for?

Yep.

And do you know someone or some people that would die for you?

I certainly think so.

And we, if we were standing in front of a live audience and we asked the audience, show of hands, how many of you know someone personally, extended family, et cetera, colleagues, who's been impacted by cancer?

Yeah. Pretty much every hand.

Pretty much every hand in the room goes up. And so there's coverage for critical illness events like cancer. Super important to have that. It's not a benefit that's paid as a result of death. It's a benefit that's paid so that a person can take the time to recover and not have to stress about all things financial while they're trying to.

Get well because they're often not working. They're not able to continue earning an income, bill still need to be paid, et cetera.

Now, the reason that I'm diving into these things just a little bit is because.

You can attest to this.

We'll get the question asked. It'll come out of the blue from a client that we've had for, for years. And they'll say something to the effect of, hey, I'm thinking about critical illness insurance. Is that something that you guys do?

So, yeah, I remember we talked about that five years ago. Yeah, it seems to come up a couple of times a year, but yeah, we do that still.

We sure do. And so in our, in our business, you know, we provide all forms of living benefits.

Yeah.

And life insurance solutions, estate planning through the use of life insurance, wealth transfer through the use of life insurance, corporate estate transfers, preferred retirement solutions, the process of becoming your own banker, the infinite banking concept, covering a loved one, especially if you have history of critical illness in your family. I dealt with a gentleman here recently. His mom has survived colon cancer.

Excellent.

And he is in his mid-30s. And he had already applied for a life insurance contract.

Right.

Was approved. And then when I was introduced to his mom. I went back to him and said, we need to get critical, we got to get critical illness. And he's, you know, 36 years young, thinking, hey, I'm still in the immortal phase of my life.

But he understood the rationale, he understood why, and he's a very bright, brilliant guy.

The insurance company puts a heavy weighting on for the listeners on family history, circumstances.

Yeah.

And often certain, you know, certain types of cancers and, and so forth, you know, they're considered in the hereditary or the, the probability that they can occur within the bloodline is, is generally very high. And so they have to assess that. And they will assess a, a living benefit type of plan like a critical illness. Right. Differently than they will a life insurance.

Totally.

It's, it's actually, generally speaking, it's often easier to get life insurance than it is to get many of the other types of insurance that are out there.

Well, when you have a 1 in 3 probability of experiencing a critical illness over the course of your lifetime, that's something that you may want to look into.

Consider. Yeah, well, and, and so I want to talk again too about the, you know, just going back to the death benefit because we started on the death benefit and so I had a conversation recently with an individual and you know, great conversation. But again, when we're talking about becoming your own banker, our focus is. And we'll even ask the question, hey, what did you, what do you think more about today, Jason? Cash or death benefit? Cash.

Cash.

And that's the same response we get from everyone. And so our focus is on that, but we can get over focused on it. Right. And, and then, and, and so there's some reasons around that, because first off, a lot of people just aren't comfortable with the topic of conversation around death benefit and death etc. So yeah, it can be a little uncomfortable for some people. It talks. You're talking about your own mortality. Right. Well, it's because of that psychological reason. I think it's something that just isn't discussed enough. And our brain kind of puts up like an immediate roadblock when the conversation goes that direction. That's my belief and I could be wrong there. And maybe there's a psychologist listening who can chime in on us. But ultimately they had the question. It's like, okay, well I, you know, I'm really focused on this cash and accumulating this cash, and I don't really care about the death benefit. And we hear that, oh, I don't really care about the death benefit. Like okay, well, you don't have to care about it, but the reality is it's there. And in fact, by the virtue of getting Nelson's process of becoming your own banker instituted in your life, we're going to continually increase the death benefit. But it actually goes further than that, because the death benefit is, when we design these programs, it's actually the thing that creates the biggest impact in the policy. Because the cash value is always chasing after the death benefit.

Well, it must, contractually, it has to.

And so when you actually understand the fundamentals of how we build the plan, well, when we incorporate the overfunding of a policy, what that does is it actually buys a single premium life policy. It buys us increasing chunk of death benefit. And because we've now locked that in place, the cash value has to jump towards it, it has to leapfrog towards it. And it's constantly chasing. It's this epic lifelong game of follow the leader. Well, it's daily and the cash is always chasing after the death benefit. So the reality is, even though we're doing this for the purpose of creating utilization of cash, it's actually the death benefit. That's the, that's the thing that drives the cash's movement forward.

Yeah, that's a very good point.

So in essence, the death benefit is actually the most important part.

Well.

Yeah, that's a very good point. You know, Bob Shields, God rest his soul, he said something so remarkable a few years ago. He said, I wish everyone could die once, just for a week and see problems that they've left behind.

Right, I remember that.

And that's a powerful statement. Such a powerful statement. And so for all of our listeners, we would absolutely encourage you make sure that you're properly life insured. Now, proper means different things to different people. That's why it's important to sit down, talk to an expert who can assess your financial situation and help you put together the proper coverage that you need for your family so that your family has a right to go on living. And so many people are unfamiliar with. In our country we have something called the deemed disposition rule. Now talk to Uncle Google and look that up. But basically the essence of it is, is that you're deemed to have disposed of all of your capital property at fair market value at the moment of your death. Now, the sale of all your capital property obviously didn't occur at the moment of your death, but the disposition has to be taken into account when somebody's looking at your final tax return and preparing and valuing your estate and Going through that whole process.

Tax free windfall of money comes in really handy when there are problems with price tags on them that are attached to your final tax return. The money has to come from somewhere to pay that bill. And Revenue Canada accepts no substitute for cash.

They're not going to take shingles or doors or business equipment or rental property.

Or so for all the business owners listening, you've spent your whole lifetime converting money into property, into technology, into human resources. The only way to turn that stuff back into money is liquidation.

Right. Which usually means you're selling everything off at a discount. So everything you spend a lifetime building basically gets, you know, decimated the day that you walk off planet Earth. Because that doesn't, doesn't just happen.

Completely avoidable.

It's so avoidable. And you know, for, you know, we have real estate investors listening and they say that, they say they see the estate sales and well, usually that's the, you know, people are sniffing out for the deal. Right? Oh, that must be, it must be a deal to be had there, right? Well, the reason those are deals is because someone's emotionally distraught and they're, they're trying to get rid of this thing that they don't need, whether it's a PDF piece of property or whatever, and they end up selling it off at a discount than what they actually could have got for it had they had money in hand to be able to move through that, you know, that emotional phase properly and they weren't in a position where they had to get rid of it right away and liquidate to raise the funds necessary to solve all those problems.

Life insurance is a wonderful tool, not only for the living benefit, but for the death benefit as well. And you know, it's, it's an important subject and, and I'm glad that we were able to chat and talk a little bit about it. I mean, we can really go in depth on, on these topics and, and we will in future episodes. But let's take a moment and do.

The pregnant pause that.

Okay, let's do that right now. Okay, that's the pregnant pause. And now let's do the biggest sell, the big sales. We still have to do that. I know the audio thing, the big sell.

We haven't got around to it.

If you haven't already. We would wholeheartedly encourage you to get your hands on a copy of our Nelson Nash's best selling book. Sold over 400,000 copies for a reason.

Which is crazy for a self published book. Unbelievable, massive feat.

Get your hands on a copy of that book.

You'll be glad you did.

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