Whole Life Insurance For Canadian Beginners

Hi, my name is jingjing Fung from Ascendant Financial. Today I am going to talk about whole life insurance for beginners. If you're not familiar with whole life insurance contract and you're not understanding about all the parties related with this contract, this video is for you. Now we know that whole life insurance is insured for you for your whole life. That means for the life insured there will be death benefit payout once we pass away. There will be a life insured when you have a policy in place and there will be a beneficiary. But also there is a policy owner of this whole life insurance policy. So today I am going to going to use my own family as example and tell you a little bit in detail like Matt mentioned for whole life insurance when you apply for insurance, if it goes with the life insured, that means that when you want to apply for a whole life insurance for this person, the insurance company will ask you for health questions and underwrites you. Once you're approved with underwriter and your policy is in place.

Your policy is enforced here. That means if something shall happen to you or happen to the life insured, the death benefit will be paid out to the beneficiary and there is also owner of this policy. Now the owner does not have to be the life insured. The owner is the one that owns this policy. Of course it has to have insurable interest with the life insured. But the policy owner owns this policy. That means they're responsible for putting money into the policy and paying for the premium. But they also have the privilege to take the policy loans and make use of this policy While this life insured is living. I will use my own family as example. For example, I have a policy on myself so I go through health questionnaires and underwriter approves me for this contract and I am the owner of this policy. Also I put down my husband as my beneficiary and also I put contingency beneficiary to three of my children. They are the secondary beneficiary which means that if anything shall happen to me and my husband at the same time or a similar short time period, my three children would be the beneficiary to receive the death benefit. Now when I put down the primary beneficiary, 100% goes to my husband because if something shall happened to me, I want him to use the death benefit and pay down the mortgage or help out with our family banking, continue to manage our IBC policies within our family.

However, if something shall happen to my husband as well.

One of my children would get 34% just because we can't divide, we can't have equal number for all three children. So two of them will get 33%, one of them will get 34%. Of course, you can put 10% to your preferable charitable organization, for example your church, and then 30% for each of them. So no fighting between them.

Having said that, the other example is. For example, my husband also has his own policy on himself. Just because.

I'm the one that managing our infinite banking within our family. I'm the one managing the family banking within our family. So he's very happy to change the ownership to me so that it's easier for me to manage our family banking system. Then I can put in premiums for him. And also I'm the one that take responsibilities and also taking policy loans from this policy that he is life insured. Just like a lot of investors are saying that, oh, don't put all your eggs in one basket. We also diversify our family banking between all our family members. Say I'm the policy owner, but I own a contract not just on the life of myself and I own the policies on my husband and each of my three children. I own a policy on my son and I am the owner while I'm still alive, while I'm able. I put premiums into this policy that insured on my son's life. But also I can take advantage of it. I'm still using it as a family banking. I use it for our family expenses and I take policy loans and payback policy loans even though the life insured is my son. However, if he grows older, he became adult, or he started to earn his own salaries, he's welcome to open up a policy for himself.

And utilize infinite banking concept in his own life. That's my desire. However, if at any point I feel like I want to pass down this policy, I want to change this to my son. I could change the owner and put him as the policy owner. Now he will be responsible to put in premiums if you wish for. And he can take policy loans and use it for his own financings and his own family. Of course, he could also change the beneficiary into his loved ones to protect his own families. Hopefully this video is useful for you to understand whole life insurance and the life insured, the policy owner as well as a beneficiary and how could you use it within your own family banking. If you have any questions or comments, you're welcome to put them down and also check out our other videos as well. Thank you for watching.