Is your term insurance bad?

As an advocate of wealth insurance and infinite banking policies, I am often asked, “Is term insurance bad?”.

There is nothing inherently wrong with term insurance.   Its a cost-effective way to get people coverage and peace of mind.      But it is widely known that term insurance rarely pays out.   I guess the good news is you are still alive.   But at 65 the premiums typically get too expensive, and at age 85 the policy generally terminates.

You not only lose the premiums you paid for the policy, but you also lose the opportunity cost … the amount the funds would have grown to if you had invested them.    And not just what they would have grown to over the term, and not just over your lifetime, but if you think about passing those assets on to future generations after you are gone in perpetuity … well the cost is infinite.

So the question should not be, “Is term insurance bad?”, but rather, “Is there a way to get the coverage I need and recapture those costs back?”.    And yes, there is.

Proponents of “Buy Term and Invest the Difference” advocate term insurance and allocating the additional fund towards investments (Funds, Real Estate, RSPs etc).      And while whole life/wealth insurance/infinite banking policies etc are not investments … they are a safe storage of assets.    Assets that grow over time in a tax advantaged way.

And if you can access the wealth, via a policy loan or collateralizing the policy, you can grow the policy on a taxed advantaged basis and invest it.    Truly you can have your cake and eat it too.   If the cost of term insurance is infinite.   Then the growth of recapturing that cost is also infinite.   Hence the phrase we have coined, “Infinite Banking”.

If you would like to review an illustration of an infinite banking policy based on your particulars (age, sex etc) reach out to me today.   I’d be happy to show you a few designs and explain how it can enhance your financial situation.