I’m sure you have some questions by now. Let’s address them.

The idea is that term insurance is [like] renting, and there's nothing wrong with renting, but eventually, the rent will go up and up and up significantly, where it will not become affordable anymore.

The way term insurance works is at a certain term, it will automatically renew. The insurance company has built in assessments that your health may be deteriorated. So they're going to make sure that they protect themselves with that increased premium.

On top of that, you are not building up any equity or value to that. If you don't pass away during the term, or if you cancel your policy, all your money is gone. So all the money that you paid into it will not be recouped.

And when you run the math on paying term until a certain point versus whole life, you're actually going to pay more cost of insurance on the term insurance rather than the whole life insurance. [That’s] because whole life insurance has a timeline where you're kind of paying it off, like paying a mortgage off, and then everything from there is all growth.

And a lot of people think they maybe avoid whole life [insurance] because they think "Well, I'm going to have all these assets later anyway. So when this term does get super pricey and unaffordable to renew it, I'll be okay anyway, because I've got all these other assets for my family."

However, they haven't taken into account the tax on those assets and the reality that they may not be able to preserve those assets because their family may have to sell them.

We will look at your overall need for insurance,  and make sure that you're not overinsured or underinsured. It's called the Needs Analysis that I'll be doing.

We may keep your current insurance that you have in place, and depending on your situation we may need to build a little more to get to your correct insurance need. And sometimes the current insurance you have may not be great, and we may need to replace it. We definitely do not want to put something in place that's not suitable for you. We want to make sure that it's correct and I'll do all that assessment for you during the Needs Analysis, which is absolutely free.

They [the mutual life insurance company] have contractual guarantees in the contract, because they know their assumptions [are] based on mortality. And they know [from] the experience they've had in the [company’s] history, that the investments they put money into can produce a certain yield they need in order to pay out that claim.

So that's why managing what's called the participating account is an extremely important process [done by] a group of people [specialized in managing the account]. [It’s] an amazing group of people [who] do that, because they have contractual legal obligations on all the block of people [policyholders] that have these policies, they have to protect those families.

So they're going to be very careful, very conservative, they're going to be able to be nimble to react to different market changes. They're going to be able to be very quick to take advantage of great investment opportunities, because they have so much capital.

And that's why whole life [insurance] has had that steady return going on 177 years, because they are able to use those assumptions and the mathematics and the investment tools and strategies that they have. The other thing is that dividends and yields come from three different things, investment performance, expenses that they can count on and manage, and number three is mortality. So if they can manage those three, there's going to be a profit and yield. And that's where those returns can come back to the policyholders.

There's a history of companies that have never missed dividends in all those years.

A reasonable timeframe is really important. That's why we do a policy loan strategy meeting every time you take [out] a policy loan to make sure that you are being an ‘honest banker’ back to yourself. A reasonable timeframe is based on your cash flow, [and] based on your income. I've already built in my recommendations when you get one of these to make sure that whatever amount you put in, you're okay and can sign off on it. But at the end of day, it's your decision.

It could be like a standard car loan, you're paying that back in 48 months to 60 months. Let's run the payment on that. If it's a $5,000 mountain bike, like a client did, or my son taking $1,800 out to build a home computer for university. What's a reasonable timeframe? Maybe that's only 11 months or 12 months or 13 or 15. So we always make sure it's going to fit. If you're purchasing an investment, like real estate, and it's significant, hundreds of thousands of dollars, then you may amortize it like a traditional mortgage and go 10 years, 15 years, [or even] 30 years.

So reasonable means based on what you can afford. I think the biggest thing on this question is you're going to hurt your own system if you do not pay loans back. And you also have to not take a loan out unless you can afford to pay it back.

If you read up on this concept [Infinite Banking and Bank On Yourself] and do your own due diligence, like I did way back, you realize that you are looking more at a long term play, a long term growth pattern. It's not about instant success or instant gratification, it's more about long term growth. So you want to pay premiums as long as you can. However, there are ways of not paying [a] premium past 10 years, if you'd want to stop it after year 10. So we can tailor that for you to make sure it's going to meet your financial obligations. And if things go wrong, and you're not able to pay the premium, we have safety nets in place to help you pay the premium from the policy, and then catch up and repay that back and keep the policy completely restored, like nothing ever changed. So there is some great flexibility there. Because life happens and you don't want to lose this incredible asset. So we want to make sure this asset always is in your life.

It's not a cookie cutter system. We have policies that are quite low for a child around $50 a month. And then we have policies that can be hundreds of thousands of dollars a year for a corporation, for example. So we won't know until we do that assessment and figure out exactly what your insurance needs [are], and how much you actually can afford. Again, the average can be different. For someone who's in their early 20s, you're looking at $200 a month to even some clients that can afford over $1,000 a month.

And you'll be able to see visually the difference of the cash value buildup you have access to and the increased death benefit for their future and estate planning and protection. Perhaps you may be starting out and getting a new mortgage. You'll definitely need to have more life insurance if you do, compared to someone who doesn't have a mortgage.

Once you pay that cash [for something], it's gone forever. And you've just tanked your savings account, and now it's very inefficient. Now you have to go and resave all that money again, and you've lost the compounding and the growth of that money. So it's about opportunity cost. And looking at keeping your money constantly growing and having that wealth curve.

Nothing is for free. There's opportunity cost by you paying cash, and not having any growth anymore and having to resave. There's opportunity cost certainly in paying interest, in terms of boring other people's money. So we weigh both, but we see that this is an amazing tool, because our money is still there, compounding in growth, even if you take out a loan against it.

We're not saying eliminate the banks. We're saying that this is going to give you options to weigh the pros and cons between both options.

What we like about accessing our whole life policies instead of a bank is that we are actually enriching ourselves instead of enriching a bank because we actually own part of the insurance company. The policyholders that have their whole life policy with the insurance carrier, they are owners. So we're actually helping our own company by paying interest to ourselves. It helps the par account where all the dividends come from. So you're actually paying into this pool of money that we all own together, that creates profit for us. So the interest you pay is actually one of the yields that the par account gets. And the insurance company loves that because it's a guaranteed yield for them. They're either going to get it while you pay it back now, or they'll get it back later when you pass on because they'll take off the interest off the death benefit later.

That's why we like to pay into this entity instead of just always enriching the banks all the time. But hey, I’m not saying don't ever borrow from a bank if you get a cheaper cost of money, and it makes sense. Let's just run the examples and let's just have a good conversation about the pros and cons behind both sides.

At the end of the day, the internet's like a bathroom stall, anything can be written on there.
Ultimately, you just have to look at the real math behind it. The math will show it. And we're not able to debate math because we all have the same calculator. So we want to make sure that it's going to be designed correctly. And we'll be able to present it and show you the actual math around it. From there, you'll know exactly how much you are putting in versus what you are getting out. And we'll look at the cost and we'll look at the growth and we'll look at your ROI if that's important to you.

Think about it, on top of it being an extremely reliable financial asset, you are also purchasing a sizable life insurance policy that will pay out on your passing. That is a return to your family or whoever you want to give that to. And that's tax free.

There's always something that may not be positive. The downside could be, you're not committing to just one year on this thing. So you have to have the ability to see yourself committing to pay this long term. And that could scare some people off.

In my view, if you're retiring in five or ten years, it may not be suitable for you. You may not have enough runway to get enough cash value in the system to use it for an income stream later, if that's one of your goals. However, if it was maybe just for estate planning, yes, we could figure it out where it's more of a short term option for you.


So that's really it. Affordability doesn't become a downside because I always build these plans that are super conservative, meaning you can lower the amount of premium you're paying if you lost your job or your business didn't do as well. So we definitely have a lot of safety nets to make sure that you're comfortable and not stressed out about this premium payment that you have to pay every month or annually.