If life insurance was called anything other than “life insurance,” business owners and families would line up to buy it. They wouldn’t need me. However, the mere mention of these two words together causes an automatic shutdown with most people – that is, until they truly understand it.
Then, their responses range from “this is the best thing I have ever done” to “why hasn’t anyone told me about this before?” to “I wish I had started earlier and done more.”
Insurance is a financial tool that solves very large problems. Unlike other types of insurance the ones I solve are inevitable. The question I ask myself frequently is: “Why is there such a misunderstanding surrounding these products, and an unwillingness to address future problems which are guaranteed to happen?” It is like walking in the rain and thinking you are not going to get wet.
As Canadians we are very fortunate to have our current tax laws and insurance products. In one simple step, a plan can be implemented that solves problems at every phase of your life, however it unfolds. You are probably thinking this costs a lot of money? It does: if you use the wrong products and leave these decisions until it is too late.
By using the power of compound interest and earning an attractive rate of return in a low volatility and tax deferred environment, a plan can be implemented that becomes a type of pension plan while you are alive, which then evolves into a estate planning tool later on.
I would like to say that the peace-of-mind this provides is worth its expense. But I can’t say that – because the truth is that these plans generate so much cash for you in the future to fund your retirement – on a virtually risk-free basis – you are making money in addition to the peace-of-mind and problems you will solve.