Bill’s Blog | June 1, 2026
Canada is officially in recession. Due to anemic economic growth (projected at 1% for the year), consumers are tapped out by high inflation (gas, food, housing, and just about everything else!). The Bank of Canada is stuck in a position where it can’t lower interest rates, as inflation just won’t go away.
The USA continue to have solid growth. The USA faces high inflation, PCE 3.8% over the past year, too, and US consumers are struggling with the same issues as Canadians. The endless on-and-off talks with the Iranian regime continue to cause extreme volatility in the markets, especially with oil prices. Just a reminder to President Trump, “You cannot negotiate with a terrorist regime”!
China and Asian markets have outperformed the Western stock markets and have more resilient economies despite the oil and gas crisis.
The EU countries continue to struggle deeply, mainly due to extremely poor economic policies that hinder growth. Sadly, the Canadian government has mirrored the same policies!
The best performing stock markets YTD: 1) Emerging markets 24.76% 2) Asia Pacific 21.96% 3) USA 10.55% 4) Canada 9.64%’
Canadian dollar: -.44$ YTD CAD/USD .7250
As of Friday:
Oil: $87.36 US, 52.14% YTD
Gold: $4540.26 US, 5.11% YTD
Silver: $75.30 US. 5.08% YTD
I want to thank Canada Life for the weekly report data.
Why Life Insurance?
I have told the story before, but it still motivates me to help people purchase life insurance to protect loved ones, and it has many other amazing benefits, which I will cover in the Blog. I can still hear the phone ring in the middle of the night when I was 12 years old. My mom staggered out of her bed and reached for the phone. It was the hospital! My dad had his second heart attack the week before, while at my baseball game. Sadly, his third one took his life in the hospital. I can still hear my mom’s words, “No, no, it can’t be true.” Then I heard her cry. I had no idea about my parents’ financial affairs, and I would not learn about them until many years later. My dad was a nice guy, a hard worker, a friendly neighbour, and he worked for Buckerfields in Vancouver for 30 years. What I did not know was that he never purchased life insurance, and in those days, many companies did not provide group plans. So, no life insurance. He also failed to have a will, and there was no joint account with my mom. My father had a sizable amount of money in the bank, but my mom could not access it. My dad left my mom in a very serious financial crisis, and she was 56 years old and had to find work as quickly as possible. Two kids to feed and a mortgage! It would take about a year for my mom to access the money in my dad’s account. How she got through that period as a kind neighbour helped sell Dad’s vehicles, trailer, and her lawyer gave her a loan. Not ideal!
So who should have life insurance? Canadian stats are not good. Only 58% have some form of life insurance, and that means 42% have no insurance. Of the 58%, 37% are group coverages, 15% have term insurance, and 8% have mortgage insurance, and 2% other types.
Big question: what percent of Canadians are going to die? I had to get my calculator out, and it came up with 100%, LOL. Truthfully, almost 100% of Canadians should have one of 4 types of life insurance. Each type of coverage has different purposes or reasons to address the need. But having no coverage in almost all cases is not a good idea. Yes, you can argue that if you are independently wealthy, you would not need life insurance; however, wealthy individuals or families actually need life insurance for estate planning. Especially important for those who do not like giving large sums of their estate to the CRA. I have met with many wealthy people over my career, and once they understand the huge tax obligations of their estates, they are often open to insurance strategies.
Four types of life insurance: The vast majority of Canadians can get some life insurance.
1) Term insurance: Extremely affordable for individuals and families. Term insurance is, as stated, a term with no cash values. It can be a 5-year term, 10, 20, 30, 40 or even to age 100. Term insurance is very affordable until about the age of 50, but after that, premiums can become very expensive.
2) Permanent Insurance: This type of insurance can come in many variations, but covers the individual until age 100 and beyond. You can have permanent insurance with or without cash value. You can borrow against the cash value as part of retirement planning and diversification. The insurance has lifelong coverage; so the premiums are more pricey; however, purchasing when you are young locks in the price until age 100, unless you go for YRT (Yearly Renewable Term). You can purchase whole life with or without cash value, and another option is Universal Life (UL).
3) Hybrid Solution: This strategy is a combination of WL Par and Term insurance. You can purchase a small amount of WL, and do the larger portion as a term rider. Example: 50K WL Par and 450K Term 65 rider. It is relatively inexpensive to do it this way for the right person or family. Doing it this way, you have the WL Par portion that keeps growing in coverage, and once your expensive family and mortgage years are behind you, the term coverage drops off, and you still have permanent coverage to age 100.
4) Simplified Life Insurance: Sadly, many Canadians face serious health issues and think they are not insurable. In many cases, that is not true. Unless you have a terminal health crisis, you can most likely get up to 50K guaranteed coverage, and it is a whole life solution to age 100. The only caveat is that you must not pass away from an illness within the first 2 years to receive permanent coverage. If you died from an accident within the first two years, then the beneficiary would receive the full payout.
Many Benefits to Life Insurance:
1) Protect your loved one in the event of a premature death. No one thinks I am going to die today; however, on average, there are approximately 905 to 915 deaths every single day in Canada. Over 350,000 annually! Death does not care how old you are. So, having life insurance can ensure all your family debts are paid off and possibly leave 2 to 3 years of income for your spouse if you are married. Also, you can fund your children’s future education (for example, 20K each). I often say, “You do not need a double crisis. A very painful emotional crisis at the loss of a loved one and a financial one all at the same time”. Cash is king in a crisis, and life insurance can meet that need when most needed.
2) Life insurance is paid out usually within 30 days upon the insurance company receiving the proper documents (Death Certificate and a claims form).
3) Life insurance is paid out tax-free.
4) Life insurance is often the least expensive way to solve business partnerships if a partner passes. Having a Buy-Sell Agreement is critical. But how is the buy-sell agreement to be funded in a timely fashion? Sell assets? Drain corporate cash or take a loan if you can get one. Most family members want to be paid up quickly. Life insurance, in almost all cases, is the best solution and least damaging to the company.
5) Life insurance is an excellent estate planning tool, and far less expensive than trusts and less complicated.
6) Life insurance can protect a business with “Key Man or Woman Insurance”. If a critically important person to your business passed away unexpectedly, life proceeds can help you find the right person and not cause significant financial losses to the company.
7) If you have significant property holdings (excluding your principal home) and other assets. Once the final spouse passes away, the TAXMAN cometh! The CRA rules state that after the person’s death, all final taxes must be paid by April 30th of the following year. However, if the person dies between November 1st and December 31st, the deadline is extended to 6 months after the date of death.
8) I was at an Estate Planning conference just over a year ago. The funeral director shared in one of the sessions. She asked the crowd, “What do you think the average cost of a funeral is in Burnaby these days”? Several advisors guessed at the cost, and all were wrong; they underestimated the price. To be honest, I was a bit shocked myself when she said $80,000! Let that sink in. Most Canadian families do not have an extra 80K sitting around to bury a loved one.
9) Should children have life insurance? Yes, and let me explain. All major carriers in Canada offer a child’s rider for 10K, 20K or 30K for $10 to $30 per month (this covers all children in the family as long as they are listed on the policy, until age 25). Yes, let’s hope it is never exercised. You can add new children any time after 15 days, and with no added cost. Let me explain. If a child gets a critical illness like cancer or juvenile diabetes, they can become uninsurable as an adult or face a rating on premiums (meaning a lot more expensive) if they survive the illness. If the child is covered by the rider, they can apply for up to 250K coverage to age 25 with NO Underwriting with many carriers. Meaning even if they have a serious illness, they can get very affordable and sizable coverage.
10) There are many other strategies one can deploy with life insurance. Giving to charities you are passionate about or educational institutions that have impacted your life. Estate bonds or using life insurance investment contracts with guarantees and creditor protection. I will do a future Blog on using insurance investment contracts, and the many benefits that are not available with most investment firms, banks or credit union products.
11) Almost all applications can be done online in about an hour or less. The coverage is usually approved within a few weeks.
In summary, life insurance should be a key pillar in your overall financial plan. The question is, do you have fully underwritten life insurance coverage? Group plans are not permanent. The day you quit or are let go, you may not have any coverage, plus it is not fully underwritten insurance. In most cases, group plans only cover a small amount of insurance, 50k, 100k or maybe two times your annual salary. Many Canadians are carrying 100’s of thousands of dollars of debt. Make sure you have adequate coverage. Mortgage insurance is designed to protect the bank, not you and your family! Plus, you do not own the policy; the bank or credit union does. Many Canadian’s buy these products not fully understanding what they are purchasing. I hope you found the Blog helpful.
If you live in BC, I can help you find the best affordable life insurance solution for your situation. Even if you live in other Canadian provinces, I have a referral agreement with a good friend who can do insurance in Alberta, Saskatchewan and Ontario.
Bill Westmacott, Life insurance broker in BC and wealth solutions provider.