Life Insurance requires its own license in Canada because most individuals typically only have a limited understanding of ONE type of insurance product. So, for example, in the Life Insurance industry, Primerica is known for their “Buy Term Invest The difference” philosophy; this is very unfortunate, as most life insurance agents who work for Primerica will never understand the benefits of Permanent Life Insurance until they reach 65 years old, and their insurance premiums SKYROCKET.
A lot of Primerica life insurance agents also focus on RECRUITING, which enables most of them to have a limited concept on the life insurance industry. So I’ll briefly explain why Whole Life Insurance, namely dividend paying whole life insurance is a SUPERIOR form of insurance.
Whole life Insurance is structured like a savings account, the difference being that a savings account doesn’t have a TAX-FREE cash windfall for your loved ones if you die unexpectedly.
Also what’s often ignored is that a lot of whole life policy holders like myself also have TERM Life Insurance riders attached to our whole life insurance policies, because if you know anything about Paid Up additional insurance for example, an $80,000 whole life insurance policy can turn into a $1 million dollar policy during retirement.
So if I have a $80,000 policy and I purchase a term rider for $1 million, in the event I die my family still gets the $1 million + the $80,000+ Whole Life insurance payout, however if I only purchased term insurance, when I reach 65 years old that $1 million dollar term policy will expire and would become unaffordable to renew, and Id have to get rid of it.
Making matters worse if I invested the difference, at retirement that’s when I have to DEPLETE, my investments, whereas with whole life insurance, I can actually borrow from my insurance policy at retirement. Now, I used an $80,000 policy example; most people have $250,000 worth of whole life insurance to START, meaning that during retirement, their whole life insurance policies are $2-$3 million. I shouldn’t say everyone because there are some bad whole life insurance policies out there, and that’s why it’s important to do your research before purchasing a whole life insurance policy.
In my humble opinion, the only way to go is dividend paying whole life insurance, even if all you think you need is $250,000 a $40,000 dividend paying Whole life insurance policy at 40 year can get you around $300,000 at retirement if you take the paid up additions rider.
Find a knowledgeable insurance agent prior to purchasing any insurance policy, it’s never a good idea to purchase insurance from an insurance company that’s main focus appears to be to recruit you to their insurance brokerage. Working in insurance is NOT fun, it’s a lot of paper work and funerals.