Category Archives: Month: January 2020

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Buy term invest the difference

Posted on: January 16th, 2020 by Glenn

Be careful -read this before you buy life insurance as a result of this sales strategy. Buy term invest the difference is a strategy for people who have whole life insurance with cash surrender values. The basics behind the strategy is that you cancel the whole life insurance, take the resulting cash surrender value and invest it, then purchase a term life insurance. The idea while possibly valid, has some criticisms that are always overlooked with this is pitched. Interest rates shown on the investments are often optimistic to aggressive. Then those investments are compared to a cash value of …Read More

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Term life insurance vs Whole Life Cash Value

Posted on: January 16th, 2020 by Glenn

Stop – before you compare term vs whole life, you need to consider a more basic problem. Before we get the the nuts and bolts, I want to realign your thinking. Comparing these two types of insurance from the perspective of ‘which one should I purchase?’ is misleading. They are two different solutions to two different problems. Term life insurance has premiums that are level for a time period (called the ‘term’), after which point the policy is not really feasible. It’s best suited for people who need life insurance for a timeframe – while the kids are at home, …Read More

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Term Life Insurance vs Universal Life Insurance

Posted on: January 15th, 2020 by Glenn

Compare and contrast term life insurance to Universal life insurance, but before we do that let me provide an outline of the two different types of policies. Term life insurance has premiums that are level for a timeperiod (the term) then increase. At a certain age the policy expires. It’s about the purest form of life insurance you can get. No cash values, no investments, no bells and whistles. Universal life insurance is effectively term life insurance plus an investment side account strapped to the side. There are two basic types of term policies that form the base of universal …Read More

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Term Life Insurance vs Group Life Insurance

Posted on: January 15th, 2020 by Glenn

Having worked extensively with both term life and group life insurance in the past, here’s why you should keep your term insurance and not use group life insurance as a substitute. First, let me start off with a table comparing attributes. Here’s why you care about those attributes: Ownership. You have no control over the ownership of a group policy, it’s controlled by your employer. This means they can cease offering the coverage. They can switch companies to an insurer that has higher premiums. They can reduce benefits. All without consulting you. With an individual term life insurance policy you …Read More

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Term life insurance vs Mortgage Insurance

Posted on: January 15th, 2020 by Glenn

Don’t buy mortgage life insurance until you read this post! Before I get into details, let’s set the stage with a video from CBC Marketplace on the subject of Mortgage life insurance. I recently spoke to the agent in this video and he assured me that the content and concerns in the video are as relevant today as they ever were. Here’s a comparison of attributes of term life insurance and mortgage life insurance: Why do you care about these attributes? Underwriting. This can increase your probability of having a claim denied. With mortgage life insurance they do post-claim underwriting; …Read More

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Life insurance for children

Posted on: January 15th, 2020 by Glenn

Why should you purchase life insurance for your children? First, and perhaps most importantly is to guarantee future insurability. By locking in life insurance coverage when they’re a child, you guarantee that they have that coverage when they’re older no matter what happens to their health. My own children are a good example, my eldest had a brush with cancer in their early 20’s and now the $250,000 insurance policy I purchased on them when they were younger is the only life insurance readily available to them. Secondly, parents often purchase life insurance on their children as a financial planning …Read More

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Accidental Death Benefit

Posted on: January 14th, 2020 by Glenn

Accidental death benefit (ADB) is a rider that pays out if you die in an accident. Here, accidental roughly means the opposite of ‘for medical reasons’ rather than the opposite of ‘on purpose’. To clarify further, accidental death benefit does not pay out for death due to medical reasons such as heart attack, cancer, or stroke. Should you purchase accidental death benefit as a rider on your term policy? The answer is most likely no – it’s generally seen as counter to basic life insurance principles. Lets say you determine that you need $100,000 of life insurance. That $100,000 is …Read More

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Children’s protection rider (CPR)

Posted on: January 14th, 2020 by Glenn

Children’s protection rider (CPR) is an inexpensive way to get a small amount of life insurance on your children. Added as a rider to your base life insurance policy, it covers them until they are adults, at which point the rider would expire Companies are fairly inconsistent with their CPR provisions, and practices vary wildly. So rather than doing a comparison, I’m going to offer a few things you should look into when purchasing a rider. CPR riders are generally available in increments of $5000, to a maximum of $25,000 or $50,000. Some CPR riders are priced per individual child, …Read More

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Life insurance for stay at home mothers/parents (Canada)

Posted on: January 14th, 2020 by Glenn

Wondering how much life insurance a stay at home mom needs? (Equally applicable to any stay at home parent). I’m going to introduce two distinct ways to rationally determine how much life insurance you may need in that situation. First, we’re going to base this on our income replacement calculator. That calculator determines the amount of life insurance you need to replace your income, over a time period. Works well for those who generate an explicit income. But as a stay at home parent, you don’t have an external income. So now what? The answer is to treat estimate your …Read More

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30 year term life insurance (Canada)

Posted on: January 14th, 2020 by Glenn

30 year term life insurance Canada is a newer policy type (relatively speaking). It’s characterized by premiums that are level for 30 years and a level death benefit. Commonly both the premiums and the death benefit are fully guaranteed. At the end of the initial 30 years (at the renewal), 30 year term policies generally continue in force with the same death benefit, but at a much higher premium. Those increased premiums at renewal are so high as to be unaffordable. Therefore you should assume that a 30 year term policy is really only suitable for insurance needs no longer …Read More