Life insurance is critical to a balanced wealth plan. Are you adequately covered?

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Growing up, I had a neighbour a couple of doors down in South Vancouver who became Sunlife’s life insurance agent. He asked me one day if I had life insurance? Of course, I said no, and he briefly explained why I should have some. Low and behold, I had a 50K permanent policy that I kept for many years until I replaced it with term insurance to increase coverage. Truthfully, I didn’t understand why I purchased that policy, nor did he offer me options. This lesson I have never forgotten is why I take the time to explain to clients all of the options to make the best decision for their lives. Knowing what I have learned as a professional life insurance broker, I would have done things very differently at 20 years old.

Life insurance is a great starting point for building a wealth plan for many people. Why? First, we will all die at some point, and protecting loved ones is a strong motivator and not leaving a financial mess for others to clean up. I have shared my own story many times, how my father died when I was eleven years old. My father had no will, no joint bank account, and no life insurance and left a massive mess for my mom to figure out while grieving and scrambling to find cash. I did not understand all the ramifications at the time as I was only a boy. But, this experience and observing several other crises created by not having proper insurance has forged a deep conviction on the importance of life insurance. I have also seen the incredible benefit to survivors who had proper insurance when a crisis hits.

Second, life insurance has many powerful benefits. For example, you can use whole life participating insurance as a wealth diversifier and a way to build up sizable wealth (with no tax consequence if done correctly) and create income in retirement or fulfill many goals on the journey. In addition, life insurance is an effective way to equalize an estate with heirs when a business or land is sold. Life insurance proceeds are private, paid out quickly tax-free (usually in 30 days), and the proceeds are not a part of the estate subject to multiple taxes and tied up for many months or years in probate. Finally, life insurance is a tool to leave a legacy to children, grandchildren and even a charity you are passionate about their cause. Purchasing life insurance for a child or grandchild is a powerful gift.

Three stunning facts you need to consider.

  • Only 44% of Canadians have fully underwritten life insurance that they own. Also, many Canadians are not aware that the mortgage insurance issuer owns the policy.
  • The average LI coverage in Canada is less than 110K. Many Canadians are significantly underinsured based on living costs in 2022 and debts carried.
  • 49% of Canadians have a group policy which is an excellent benefit; however, in almost all cases leaves you vulnerable if you leave the company. You have no coverage, and the benefit is usually too small. Ensure you have individual insurance and top-up the coverage amount to protect your family and offset all debts.

If you haven’t purchased the proper insurance, understand your options or know how much you should have, please reach out to me if you live in BC. I am a fully licensed broker in BC, and I can often do a referral agreement with another respected insurance agent in other Provinces. So here is what I can offer you.

  • Free consultation explaining your four basic life insurance options.
  • I can create several quotes quickly online or in-person to help you understand your options and pricing to stay within your budget.
  • I can go through the whole process 100% online: Consult, application and delivery of the policy using Zoom and the carrier software and email.

I encourage you to stay tuned in the next few weeks, as I will share many top financial experts’ insights from two separate conferences. No one advisor, including myself, sees the financial picture 100% clearly, so we must collaborate with many critical thinkers and gain perspective from decades of other’s experience. 

Quick important update, both central bankers (Canada and USA) did not raise interest rates this week. No surprise. I guess they love the massive inflation they have caused and continue to prop up overvalued assets and irresponsible politicians who keep giving themselves raises and run incredible deficits. So yesterday’s non-action may cause a temporary rally in the markets for a few months, and expect a significant drop later this year. But, as I have said for years, none of this is sustainable.

Please, keep learning and growing your financial IQ in 2022. Then take action to add strategies, adjust your plan and be open to new ideas. Remember, procrastination is not a plan! If you need help, please reach out to me, and I am happy to serve you. 

All the best in 2022, and keep your seat belt on as I expect a turbulent ride.

Bill Westmacott, Owner

www.fivefoldfinancial.ca

bill@fivefoldfinancial.ca 

Financial Education & Honest Solutions Create Success

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