Whole Life Insurance Vs Term Life Insurance In Canada

Don't get me into what happens when you're 60 and then you're 70. The price for the term insurance is going to be completely unaffordable. It won't make sense to pay that kind of premium. So you're either going to cancel the policy or when you reach age 85, you're going to outlive the policy. It's going to expire anyway. So term life insurance is really, really great when you're young, you're healthy, and you have a high need for insurance and it's super inexpensive. But you must.

Term life insurance is the most expensive way to solve your life insurance. Wait a minute, wait a minute, wait a minute. Term life insurance is the most expensive life insurance solution out there. What are you talking about, Vern? What's going on here? So this video is all about whole life insurance versus term insurance. So right away I'm going to contradict myself and I'm going to take the verses out of there. Okay, There's a big debate out there. Hey, which type of insurance is the best type of insurance? Is it whole life? Is it universal life? Is it term? There's various types, there's subdivisions of all of those types of insurance as well. We're going to keep it really simple. We're going to talk about permanent, participating, dividend paying whole life insurance versus term insurance. What I like to do is take that word versus out of there and put in and okay, so depending on your situation, you might need some term insurance because guess what? Term insurance is fantastic when you're young and you're healthy and you have a large need for death benefit. I'm a young guy. I have well over four and a half million dollars of life insurance on my life. A lot, a lot of which is whole life insurance and a lot of it is term. I have a large need for death benefit right now because I have a massive amount of wealth accumulation objectives and I'm going to create a lot of wealth in my lifetime. But the key word is time. I don't know when the time is going to end. So if you need time, you need life insurance, you need death benefit. Because God forbid, if I become an angel today, I better make sure that I don't leave my family behind having financial issues. I want to make sure that they have never have a bad financial day, no matter if I'm here or after I'm gone. But if I live a long, healthy life, then we're going to do even better. So let's assume that we live a Long, healthy life. Think about it for a moment. Term life insurance, again, there's no bad product really. There's just bad implementation, a bad placement. Okay, so people are trying to lead with the product and tell you what product you need versus hey, what are your objectives? What's the solution that you want to accomplish? So it's all about finding the why behind the what. What are your objectives that you want to accomplish? Okay, so if I want to make sure that I'm going to secure my legacy and build wealth and have death benefit available to my family when it's actually needed when I'm 80, 90 or 100 years old, then term life insurance is a poor solution. A poor product for that solution. Term life insurance is exactly what it says. It's there for a term. I'm going to talk about the most common type of term life insurance right now. Term 10 or maybe term 20. You might be familiar with that term. 10 year term doesn't mean that the policy is going to end in 10 years. It means that it's going to renew. And these are not real numbers. So bear with me. Keeping this really simple. 30 years old, I need $1 million worth of insurance. It's going to cost me 30 bucks a month if I get term 10. I don't know, that might be close, it might not, and I don't really care. It's just an idea for you to think about. So it's 30 bucks a month. Oh, that's great. You know, I got a million DOL dollars worth of insurance and I only have to pay $30. So we're trying to get the most amount of insurance for the least cost. Fair enough. But what happens when I turn 40? Well, when I turn 40, I'm not going to really probably notice the renewal. It's going to go from like 30 bucks a month to like maybe 60 bucks a month. And all of a sudden I'm like, yeah, whatever, I'm making more money. I'm a little bit out of key. I'll keep paying it. But then what happens when I turn 50? When I turn 50, it's going to go from 60 bucks a month and it's going to jump to like 360 bucks a month. And then we're like, oh, wait a minute now, I noticed that a little bit. Do I still need insurance? Well, I've talked to hundreds of 50 year olds and I can tell you most of them still need insurance. Death benefit is really important. You should have it for a lifetime. But when you're 50, all of a sudden and you have that life insurance need still. Maybe you're starting to run into some health issues. Maybe we don't have enough capital available to start a permanent participating whole life policy or a permanent solution at that time. A whole life solution. Don't get me into what happens when you're 60 and then you're 70. The price for the term insurance is going to be completely unafford. It won't make sense to pay that kind of premium. So you're either going to cancel the policy or when you reach age 85, you're going to outlive the policy. It's going to expire anyway. So term life insurance is really, really great when you're young, you're healthy and you have a high need for insurance and it's super inexpensive. But you must start educating yourself and learning about how does whole life insurance actually work. I think term life insurance is the most expensive type of solution, but I'll add in long term, right? Whole life insurance, the big knock on it, because people don't understand how it actually works, especially the advisors that are selling it, with all due respect, they say, hey, it's easier to make a sale by selling term life insurance, but they're not talking to the client about what their actual objectives are and planning long term. If people started to purchase just a tiny little bit of whole life insurance in their, well, hopefully when you're babies and you can buy it on your kids, right? But when you're young, you're zero years old, buy some more when you're 10, buy some more when you're 20, buy some more when you're 30, buy some more when you're 31, 32, 33, 34, as you're earning more income, put a little bit more into the insurance policy, put a little bit more into the permanent participating dividend paying whole life policy, because what's that policy do? And again, giving you an example, If I buy $100,000 of term life insurance, yeah, it's going to cost me 20 bucks a month or whatever. If I buy $100,000 of whole life insurance, maybe it costs me 10 times that much. I don't know and I don't really care. Why on earth would I buy something that costs ten times more? Vern? Well, the first thing is, is that that premium is the cost of that insurance is never going to go up. Keep in mind, I'm talking about a specific type of policy. There's many, many policies out there. So they can be structured such that the premium is level and it can eventually even drop off and no more premiums due at all. So first of all, premium stays level. What happens to the death benefit with a term policy? Death benefit stays level. With a whole life policy, the death benefit rises. It actually rises over time. So there's an ever increasing death benefit that's building so that you can take care of those final expenses. You're going to build wealth in your lifetime. And when you pass away, the government is going to want their cut. They want that final tax return. And you can pay that tax return out of your own dollars, or you can use the life insurance company's money to solve that problem. So the life insurance is a really great long term, permanent solution when you have the right type of policy in place. Now the other part is that inside the policy it builds cash value. It actually builds like equity, if you want to call it that. But it's cash value. The cash value has to rise to match the total death benefit by the time the life insured reaches age 100. So as my death benefits ris and as I'm getting older, the cash accumulation in the policy is accelerating. And if you needed to or wanted to, or especially if you're implementing the process of becoming your own banker, the infinite banking concept, you can actually go and access cash value from your insurance policy to achieve objectives while you're alive. You can benefit from insurance, life insurance while you're alive. Imagine that you could use it to achieve objectives. Pay for your daughter or son's wedding, university, finance a vehicle. What is it that you need to accomplish? Well, you can borrow money from your policy instead of borrowing it from a commercial bank. And then you get to control the repayment schedule going back into the policy and you get to re access that money again if you wanted to. And God forbid, if you pass away while there's a loan outstanding on your policy, your death benefit is much bigger than the loan. The death benefit will wipe out the loan and the rest will flow to your family tax free. So this conversation really isn't about whole life insurance versus term. But the title is pretty catchy, isn't it? It can be whole life and term, but there's a lot of misconception out there about whole life insur and how it actually works and what it can do for you and what a absolutely indestructible wealth building tool that it is. And if you have a permanent need for life insurance, which again in my personal opinion, every single person walking around has a permanent need for life insurance, get yourself educated. It's not term versus whole life, it's term and whole life. They both have their place. But it all comes down to what are your specific objectives? What are you trying to achieve for you and your family? And then you can determine what the solution should be. So make sure that you work with somebody who actually has your best interest in heart. And it's really not hard to figure that out if you take a minute to think about it. Okay. Particularly if somebody's way overzealous about one specific solution or something like that, it's kind of raises a red flag. And if they can't answer specific questions about hey, why this versus that? Then again, probably kind of a strange way to approach things. You want to find somebody who can actually give you all of the angles, all of the stories. Are they going to give you the good and the bad about the solution that they're trying to tell you there might be some bad about whole life? I'd be more than happy to share that with people. So you found good value in this video. Check out the playlist beside me here where you can learn more about whole life insurance and you can learn more about implementing the process of becoming your own banker. And if you have questions about the video, make sure you click the link in the post description below to get in touch with one of my qualified teammates.