Benefits Of Whole Life Insurance in Canada

And most of those assets are going to have a terminal tax liability. So Uncle Trudeau, the government, the cra, whatever, they're going to come for their slice of the pie. That's how that goes. And you have a choice to make. You can pay for that slice of the pie dollar for dollar out of the hard earned wealth that you worked hard to build, or you can pay for that slice of the pie for pennies on the dollar and use the life insurance company's money to pay your bills so your family can receive all your assets tax free. To me, I choose the latter, but you might think to the former is better. Is that bad? It's bad for me. Might not be bad for you.

Hey, you probably heard that whole life insurance product is the worst place to store your money. And financial guru say that it is a ripoff for you. So watch this video till the end and we're gonna share with you benefits of purchasing whole life insurance product and how it makes your life easier and better.

Okay? So Roman, this is awesome. We're hearing. You know, there's a lot of, what do we call it, financial noise out there, right? Nelson would say, you know, you need some noise canceling headphones for all the financial noise that you hear out there. About the process of becoming your own bank or the infinite banking concept in Canada. About particularly the tool that we use to implement the process of becoming your own banker, the infinite banking concept, which is a properly designed, permanent, participating, dividend paying whole life policy, ideally with what's called a mutual insurance company. Now that's a mouthful, Roman, but when I talk to clients or prospective clients about particularly the product, the tool, whole life insurance, I often say that, you know, buying a whole life policy or insurance in general, it's like going to a car dealership. It's not a commodity like that, but it's like there's about 100 million different ways to, to build a vehicle, right? There's all these different bells and whistles that you can access. And whole life insurance or insurance in general is very much the same. So somebody hears becoming your own banker whole life insurance, or they hear whole life insurance in general. Ah, that's junk. Because maybe they got a little bit of information, maybe they heard something from somebody or maybe they had a policy in the past, but they get a little bit of information and then all of a sudden they're a subject matter expert and they jump to conclusions. Absurd.

And I often say, Roman, that there is no real bad product. There's just bad placement. It's all about building something to help you solve your specific objectives. So these are just general things that I want to set the stage and create some context. But Roman, would you be open to just sharing? Let's go back and forth. What are some of the actual benefits from whole life insurance? Dividend paying, participating, whole life insurance, particularly.

Thank you, Vern. You know, I love your analogy about, you know, car dealership where you come to purchase a car and most people look at some specific attributes. For example, when you look at life insurance, you're looking at what, a death benefit first. Right. How much death benefit can I buy for the least amount of money? People look for highest coverage with the least price. So they look at a price tag and say, you know what, it's expensive insurance. I want to do a cheaper insurance. And they're kind of shopping around, they're kind of getting quotes from insurance brokers, they kind of comparing, hoping to get the highest possible death benefit for the lowest price. But they forget that they may be way more attributes to what they can get with a life insurance. And we're going to share some attributes of whole life insurance products. So death benefit, we've already mentioned that benefit. It's just one of them. Right. What is a death benefit? That benefit is a payout that will your family, your beneficiaries will receive when you pass away. This is just one. One benefit, but there's so much more. And which other benefits of death benefit are associated with the whole life? What do we have?

Yeah, no, Roman, thanks for. Thanks for positioning that. You started out by saying, you know, again, I need to get insurance for my family. Maybe I'm 30, 35 years old, I have a couple of kids, I have a job, I have a mortgage.

I.

Right. So obviously there's a massive financial loss to that particular individual that I just described or their family, rather, if that person dies prematurely. So keep in mind, we're not here to knock term insurance, particularly as an example. Term insurance has its place. It's a very useful tool. High death benefit, low cost. But the problem with term insurance, it's called a term insurance. So it solves a problem for a term. It doesn't solve a problem for your whole life. So when someone passes, passes away, talk to an older person, talk to somebody who's experienced loss. I talk, Roman and I talk to people every day about that are in their 50s, 60s and 70s, maybe they have a health issue now, maybe they can't qualify for new insurance. They're seeing their term insurance policies renew and we actually Hear it often where they say, oh, man, if I would have known, I just looked at whole life insurance 30 years ago, and I saw, oh, man, like, 100,000 bucks was X amount of dollars, and a million dollars for term was, you know, cheaper than that. So I went for the term, and it went up a couple times, you know, and I never really noticed it. And now I just saw my renewal, and it's going to be, you know, it's going to go from $500 a month or whatever it was to $5,000 a month, literally, because we're literally getting closer to mortality. The insurance companies need to account for that risk. So whole life, I can start with a higher premium with maybe a lower insurance. But guess what happens to my premium over time, Roman? Stays the same. Yeah. Stays low.

And your whole life, you don't have to renew it.

It's a predictable cost. And I could potentially set the policy up so that the premium drops off altogether. I mean, I have so much more control and flexibility over particularly the cost of the insurance or the premium. I could drop the premium. In some cases, I can raise the premium. In some cases, I can stop paying altogether if I wanted to. So that's one advantage to whole life insurance. It starts high, but. But over time, the premium stays level, whereas term insurance will jump up and eventually it'll actually expire. You're likely going to outlive your term insurance. So we're just talking about a pure death benefit perspective right now. But there are many other benefits, right, Roman? Yeah, yeah.

And then there's no flexibility. With the term life insurance, the only flexibility you can do if you. If you. If you can decrease your coverage, this is the only flexibility. You can decrease your coverage and pay less. So basically, if the premium gets too high for you, then if you don't want to sustain it, if you don't pay it for a specific amount of time, then their life insurance actually expires or lapses. Right. So with whole life insurance, you have flexibility. You have flexibility to go lower or higher up to the maximum. And the death benefit, also in terminal life, term life insurance doesn't go up, which is the second attribute of whole life insurance. The way we design a policy is that that benefit has to go up because of overfunding this insurance. So with term insurance, you're only basically leasing coverage. You're renting this coverage for a specific period of time. With whole life insurance paying level premium for the whole life, at some point, you can make changes. You can pay less, or you can stop Paying because the policy will be going on autopilot because of dividends, because of cash values accumulated in a policy. So you have more flexibility there. And also your death benefit is going up. It is a additional very valuable thing because when we get older, we get more assets, we get more to pay tax on when we pass away. Terminal tax bill. Right. So we want to make sure that our payout for the insurance takes care of your terminal tax bill or leaves a legacy for your children.

Yeah, Roman, you're hitting like some really, really important points here. So the first thing that you said is my term insurance death benefit is actually going to stay level while my cost is actually rising. I'm paying more and more for the same amount of insurance. So my valuable dollars are paying actually for less coverage because we know that the value of the dollar is actually losing, losing value. So if I die in 20 years, God forbid, with a term insurance policy, I have a $500,000 term policy today that might be sufficient or a lot of money, but in 20 years from now, that same 500,000 is going to buy a lot less for my family. So that's piece number one. Whereas with my whole life, if I'm putting premiums into the policy, if it's just a base whole life policy, keep in mind there is a bunch of different ways to structure a policy. We have policies that are non participating, so they're not receiving dividends, or we have some policies that are not receiving cash values, or cash values are accumulating way down in the future. So that's why it's really important to work with somebody who actually understands the tool that they're talking to you about. They're not just trying to make a sale. They're actually working with somebody who has some experience, maybe they actually have some of those tools, those products themselves, and they can actually show you that they have those products and they're not speaking to you from, hey, do this and don't do that, because this is really bad and this is really good. Well, why is this really good and why is that really bad? And is it really bad for me or is it really bad for you? You see, my objectives in life are going to be far different than Roman's objectives in life. So the way that Roman structures his insurance portfolio or his finances or his family is probably going to be different than the way that I do. So does that mean that whatever Roman does is bad? No, it means it might be bad for me, but it might not be bad for Roman. Right. So that's really important to look and take a broad stroke and say whole life is bad or term is bad or univers reversal is better. That's just, to me, that's backwards thinking. And if someone tells you think about this for a moment. Just like what Roman said, as you're getting older, you're accumulating assets and most of those assets are going to have a terminal tax liability. So Uncle Trudeau, the government, the cra, whatever, they're going to come for their slice of the pie. That's how that goes. And you have a choice to make. You can pay for that slice of the pie dollar for dollar out of the hard earned wealth that you worked hard to build, or you can pay for that slice of the pie for pennies on the dollar and use the life insurance company's money to pay your bills so your family can receive all your assets tax free. To me, I choose the latter. But you might think to the former is better. Does that bad? Well, it's bad for me, might not be bad for you. So it's just we have to think about these kinds of things. And to Roman's point again earlier, that death benefit, or excuse me, that premium is staying level and that death benefit is actually expanding. Roman, is there, is there such a thing as too much money? In my mind, there's no such thing as too much money. Right. If you have enough for your family and then there's more, couldn't you just bless someone else's life with that?

Of course.

Right. It's all about how we think about things. So Roman, I want to talk a little bit about. You'd mentioned there's a premium that we put in. You said the word overfunding. I just want to address that quickly. We're not overfunding the policy, we're capitalizing the policy. And I think, correct me if I'm wrong, Roman, what you were referring to when you mentioned overfunding, the way that we structure policies for the process of becoming your own banker in Canada, the infinite banking concept for Canadians, we are actually structuring the policy so that there's flexibility within the premium, meaning there's always going to be a minimum or a base, a required premium. I want to make sure that that base required premium is a healthy, efficient base premium, a solid base. Right. Any building needs a good foundation. So I want to have a solid base in my policy. But something that is sustainable for me, me and my family can easily deal with that through our monthly cash flow or existing savings. We can transfer that as a Base premium. Now, every policy is going to have a maximum premium. When I say every policy, I mean every policy that's properly designed for the infinite banking concept. In Canada, again, there's many, many different policies out there. You can have some that are just all base, meaning there's no real flexibility until years down the road when there's cash value built up in the policy. So we have a minimum base premium and then we have a maximum premium. And my ambition is to put that maximum premium in, but I'm not required to. I have that flexibility. And as I'm capitalizing that policy, it's going to build my death benefit, and I'm going to receive more dividends, more divisible profit from the insurance company as a result of capitalizing the policy more, because I've contributed to the profitability of the insurance company, so I'm eligible for a larger share. But now, Roman, now that I've got this death benefit created, I took my cash, I put it in the policy, it creates death benefit. But there's something really, really important behind that death benefit. Chasing that death benefit every day. Isn't there something that can benefit you and I or the policy owner while they're alive? What is that?

Yeah, it's called a cash value where you in, as opposed to term insurance, where you don't have any savings accumulated. Now, in whole life insurance, you have cash that you can use today. You don't have to die in order to become rich. You don't have to die in order to, you know, get all this payout to your family. You don't have to wait for so many years, for 20, 30, 50, 60 years in order to, you know, to leave this legacy. It may be not even your objective to know, to leave this legacy to your beneficiaries, to your children or to your spouse. So you want to enjoy your money today. And then this is created with cash value that is accumulated in any policy, and you have access to it to use this today as your own bank.

Roman, if there's cash flow growing inside the policy, does that, does that mean, like, is this, like, is the whole life policy? Is it like an investment, like the stock market, or. What do you mean? Where does that cash value come from?

No, the cash value is actually guaranteed by the insurance company to grow every single day. So the whole objective of this is that you have a death benefit and then the insurance company is working hard to fulfill the guarantee to match these two numbers, the death benefit and the cash value. When the insured turns 100 years old. That's why insurance company is working hard to build this cash value for them, to remove the risk for them. Risk of coverage.

Yeah, you're so you're. Yeah. So what the insurance company is doing is building up the cash value so that they're only on the hook for the spread between the death benefit and where the cash value is at. You said a really good point there. You said that it's first of all it's their responsibility to grow that money. So all I got to do is pay the premium. I just got to deposit the premium. And this is one of the common misconceptions where people think whole life is not good because the cash value starts at zero, day one and it starts to accumulate right away. So obviously if it starts at zero, we need time to build money. And as I capitalize over time and my death benefits growing, the cash value is going to accelerate because the window of time is shrinking to have the cash value and death benefit match. So the key things here, Roman, first of all, I need to point out we're talking about the process of becoming your own banker, the infinite banking concept in Canada. To learn more about the process of becoming your own banker, click the link in the post description below and go to watchibc.com that's watchibc.com where you'll get access to a 90 minute webinar that will walk you through the basics of how the process of becoming your own banker in Canada, the infinite banking concept actually works. And we use the tool, the dividend paying, participating whole life policy to implement the process of becoming your own banker. The next thing that I would say is like do your research, like do some reading, ask some questions, make sure that you're working with somebody who actually. Yeah, if you're talking about the process of becoming your own banker, of course we can use the process of becoming your own banker to get the living benefits of the, of the insurance policy. But we're also building a legacy and building in estate protection. So make sure that you work with somebody who actually has your objectives in mind rather than coming at you with a product. That's one of the problems is leading with product and then you think, oh, the product sounds great, but then we forget about it. Sounds great. Yeah, because it is probably great, but is it great for you and for your specific objective? So that's a really, really important pie key. I know that Roman added a ton of value here today. You got a lot of value out of this video. So make sure you binge the content here in the playlist beside me. Go to WatchIBC to learn more about the infinite banking concept in Canada. For you, the Canadian viewer. Until next time.