How to Protect Your Finances Using Whole Life Insurance

The coronavirus pandemic has disrupted financial markets and thrown the global economy into a tailspin. We are now living through uncertain times. No one can anticipate what the long-term economic fallout will be. Now is the time when Canadians need to know more than ever, how to protect their finances.

In February, global stock markets reported their single largest declines since the 2008 financial crisis. Many Canadians saw their investments and retirement savings plummet overnight. This has been very devastating for Canadians preparing to retire or already retired.

One thing is certain. Traditional investments are no longer a secure haven to store and grow your money. What Canadians need is a savings mechanism that protects and safeguards their financial futures, while eliminating unnecessary risk—a financial bunker for scary times. Dividend-paying whole life insurance is one of the best-kept secrets to protecting your financial future. Here’s why.

Dividend-paying whole life insurance offers you lifetime protection.

How to protect your finances requires purchasing some life insurance. Dividend-paying whole life insurance is a type of permanent life insurance providing lifetime protection, meaning at one point, the death benefit will be paid out. Although premiums on dividend-paying whole life insurance are usually higher than term insurance, the premiums are set for life and never increase. While term insurance may be less expensive at the onset, the death benefit is not necessarily guaranteed. With each renewal of the term policy, the premiums will increase with age, even to the point you could be priced out of reach—that isn’t even a concern with dividend-paying whole life. The death benefit is also tax-free under current tax law, allowing you to preserve your legacy for future generations. The death benefit protects your finances by safeguarding your estate from probate. Funds can also be used to help cover final expenses, repay debts, guarantee future income for your loved ones, or a charitable donation.

Dividend-paying whole life insurance is a living benefit.

Dividend-paying whole life insurance is a unique asset because it features a cash value that builds equity over time through annual guaranteed returns and potential dividends, making it more a living benefit than a death benefit. If you want to know how to protect your finances, than you need to learn about utilizing the cash value of a whole life policy to become your own personal banker. When structured using specialized strategies such as Bank On Yourself (BOY) or the Infinite Banking Concept (IBC), and with the right expertise, the growth of the cash value in a dividend-paying whole life policy can be accelerated, providing you with accessible equity. That access to equity helps you with cash flow so you can free yourself from the banks and gain financial control for life. Currently, MacDev Financial is the only company in Canada that has agents authorized in Bank on Yourself (BOY) and Infinite Banking Concept (IBC). For more information visit our Bank On Whole Life™ page.

Dividend-paying whole life insurance has a proven 160-year track record of long-term guaranteed savings growth. 

Unlike traditional investment products such as mutual funds that carry risk and are susceptible to market volatility, dividend-paying whole life insurance has a 160-year proven track record of providing guaranteed returns despite what happens in the markets. This makes it one of the safest and most secure financial savings vehicles out there. Even when you borrow from the cash value of a dividend-paying whole life insurance policy, you continue to earn the same annual guaranteed cash value increase and potential dividends as though you never touched a penny of it, while the principal and gains remain locked in. Utilizing a financial savings vehicle with that type of track record is a given when it comes to knowing how to protect your finances.

Dividend-paying whole life insurance provides you with accessible liquid equity. 

When you need funds, you can borrow up to 90 percent of the cash value in your policy through one or more policy loans. Think of the equity built up in the cash value of your policy like a home line of credit (HELOC) with some differences. Like your home, your cash value is an asset with a certain value you can use as collateral. When you pay into your mortgage, the payments reduce what you own on your home. This increases the amount of home equity you have. The value of your home is still the same. You’re just leveraging the equity to collateralize the HELOC. The cash value of a dividend-paying whole life insurance policy works like a HELOC. When you take a loan out on your policy, the cash value remains the same—as if you haven’t touched it because you’re simply leveraging the equity in the policy’s cash value as collateral. You can use this equity for whatever you need—including emergency expenses. Think of it as an emergency cash reserve that you can utilize  now with the potential to build wealth over the long-term and well into your retirement years.

Dividend-paying whole life insurance offers you greater financial control and flexibility.

You have greater flexibility when you borrow from the cash value of your policy because you have complete control over your policy loan repayments. Unlike traditional loans, you have the option to set the terms of your repayment when you take out a policy loan. That is what makes dividend-paying whole life insurance such a powerful asset in times of financial hardship. Your credit is not impacted if you miss a loan repayment or must reduce loan payments to get by. You can even skip payments if necessary until you get back on your feet. You do not get that level of flexibility or control when you take out a loan through a lending or financial institution.

Dividend-paying whole life insurance provides you with a tax-free retirement income. 

How to protect your finances and ensure you have enough retirement savings in your golden years is a dilemma many Canadians are facing. When you are ready to retire, the cash value (living benefits) of dividend-paying whole life insurance can provide you with an additional stream of tax-free retirement income. You also have reassurance knowing the exact minimum guaranteed value of your account the day you expect to tap into it. There is no worrying about how much retirement income you may have potentially lost due to market volatility like an RRSP. And if you need to access funds in case of an emergency, you won’t be penalized like you are when you withdraw from an RRSP. That’s more money in your pockets and less in the governments.

Elevate your financial control for life by creating a financial bunker you can count on for your todays and tomorrows, with dividend-paying whole life.

DisclaimerThe material and/or information provided in this blog document and video are for informational and/or educational purposes only. The opinions and views expressed in this blog document and video are solely those of the author and not necessarily those of the distributor, and do not constitute financial or taxation advice in any way. All financial endeavours should be vetted through a financial, tax, or another appropriate professional; for example, life insurance broker, financial planner, accountant, and/or lawyer, as the audience sees fit. MacDev Financial Group Corp. and SET Financial Solution and any other corporation associated with the author, including but not limited to its agents, staff, associates and/or partners, will not assume any liability for any information disseminated in this blog document and video; indirectly, or assumed.