Ok, I got my calculator on my web site. Under free financial tools person A vs. person B.

Person A has more money than person B. Person B has permanent insurance. Person B can withdraw more money and pay taxes than person B. Since the goal is to spend the capital down, cash can be taken out of the life insurance tax free. Put in your own numbers.

Here is some wording from a life insurance contract.

“Except in the case of fraud, we will not contest this policy for misrepresentation after it as been in force for two years….If any life insured under this policy dies during this two year period, we can contest at any time.”

The insurance companies will get all your medical information from your doctor and find out more from a blood test etc. At the time you apply for life insurance.

As an side.
Even if some one was rated say a smoker vs non-smoker overweight etc. They can usually get a lower rate after one year if they can get another medical or evidence the insurance company may seek. This applies for people who are overweight, even in the case of some types of cancer, after a period of time as gone by and are being follow-up by a specialist.

Many people try to get a non-medical and pay higher rates and limited coverage. Yet even if they are rated this may be cheaper and more coverage can be bought. Currently, BMO which bought, AIG, which bought Norwich Union (Candian side). Remember the old commercial. The Mother would be on the phone and say to the father, “It’s Patrick, he bought life insurance.”

The big deal here was “No medical” and best of all “No salesman will call.” Millions of dollars were/are sold, now BMO is in the game. Lots of people could have paid less for more coverage. The key message is, you buy direct and save (not).

Check out YouTube “Norwich Union commercial 1997″ also the 1999 version is good for a good laugh.

Before I comment on your grandmother. Are clear about the stuff you said about life insurance exclusions “like the act war” & 9/11 was off base? Let me repeat the only exclusions on life insurance, is the suicide (if done with in two years of buying the policy) and lying about your health.

I am not sure where you get your information, but I am pretty sure you don’t have your own private life insurance yourself. If you do, let me know what you got.

I appreciate the help understanding more of the fine print but a few things that I guess I’m confused on what you mean when you say if you only have a limited time or time line to buy insurance. Don’t you feel that is the biggest problem we have is instead of educating ourselves and reading the fine print that we trust what one person claims and then find out when we need it most that we should of done the research?
All to often with everything it seems to be the case. Explain to me how 3 companies all sold different policies one term, one whole life and one VUL all ranging from 150k to 180k of coverage all purchased within 5 years of each other, all given the same preferred rating. when the client passed away the Term company paid the claim in 30 days. the other two companies denied the claim & took them to court to try and not pay the claim? THANK GOD FOR THE 1ST COMPANY OR MY GRANDMA WOULD OF BEEN IN SERIOUS TROUBLE. and that 1st company is the one you seem to have the biggest problem with.
The second question I have is you keep talking about renewability and when u get older having to pay a ton more for your insurance. Isn’t that what you do every year with your permanent life insurance policy? Every year your cost of insurance goes up to a point where it cost more than your initial premium payment was. Is this not true? and the next question I have is so when my cost of insurance surpasses my initial premium payment where does the company get the difference to pay the payment? doesn’t it come from my cash value? And if the company is taking money from my cash value how does it ever grow? And then does the company send you anything in the mail or call explaining this or do they expect the person that just listened to his agent and didn’t do the research to know this… There just seems to be too many questions that can”t be explained when it comes to buying what you call Permanent insurance.

You raised some good questions and I will try to help you.
For the do it your self crowd, this is a great example of not having access to the fine print unless you have weeks of time one your hand to read everything. Not every thing is black and white.

Not term insurance policies are equal. For example if I am 35 years old have health problems I can not convert my Primerica policy to permanent coverage until I die.
What many people don’t know is how many years before the convertibility to permanent life insurance is gone, some have more options than others.

The main exclusions for life insurance is Suicide, within two years of getting the policy. The other is lying about your health.

The “act of war clause” I don’t know what insurance companies your are looking at that will not pay. One of my policies states there may be a “delay to pay within 7 business days made impractical by reason of flood, riot, fire acts of nature,labour unrest,acts of war, terrorism, power outage.”

If you want some samples of life insurance contracts send me a e-mail with your contact information.

The reason why term insurance is cheap is because you are renting coverage. When you get older (and closer to death) the rates …renewals go up by 4 to 10 times every 10 to twenty years, unless you want to prove your health to an insurance company. The odds of a term policy paying out is very low (in many cases I have heard it is about 1% or less). Since some companies offer cheaper insurance one reason maybe at renewal time, when rates may go up higher than other policies but sometimes not. You have treat each case differently. Only someone who is independent can review rates, options, offer that. Or you can contact all the insurance companies you see. Getting the best coverage in requires help. So people who want to do this on their own, are confused and frustrated.

By the time some people decide they would like permanent coverage for taxes,business reasons or children and they have a different philosophy on investing and taxes they are usually in their mid 40’s or older. I don’t know if you are there yet, Brett.

The 9/11 story got my blood boiling for lots of reasons.
First 2,976 people died so you’d expect lots of confusion etc. I heard David Buckwald (an insurance agent in New Jersey) speak about the 51 brokers he knew at Cantor Fitzgerald, located on the 101st through 105th floors of Tower One of the World Trade Center, which was right above where American Airlines Flight 11 hit the building on the 93rd floor. Out of these people, 30 had life insurance policies all were paid out. A few brokers had cancelled their policies some time before 9/11, as their wife’s found out later. Maybe because of the cost of large policies they thought they could invest the difference, because they were young and could make more in the market who knows?

The confusion I think you had about the insurance and 9/11, is a man called Larry Silverstein (real estate developer). Silverstein won the bid when a deal between the initial winner and the Port Authority fell through, and he signed the lease on July 24, 2001, only weeks before the towers were destroyed in the September 11 attacks. He declared his intent to rebuild, though ran into dispute with his insurers over whether the attacks constituted one or two occurrences. A settlement was reached in 2004, with insurers agreeing to pay out $4.55 billion, which was not as much as Silverstein sought. In a nutshell, he wanted to get paid twice for the damage !

I just read the last few post from Brian and although it is good information it is extremely vague. how can you compare life insurance companies on just price and not explain why rates can be so different?
Sure anyone can get online look up any life insurance company and get a qoute and one quote can be $20 to $50 dollars cheaper than the other. But what people don’t understand is not all life insurance is created equal and you are not getting the same products even though they are both called TERM. For Example: Brian referenced this quote “Male born June 15 1970 (non-smoker) $500,000 (coverage) rated regular, Term twenty, top three companies Western, RBC and Equitable costs between $59.14 to $62.55 per month…Primerica $85.50 per month.
This quote doesn’t explain at all why there are differences in price or explain how it is even possible for these 3 companies to have such discrepancies. So let me help.
Every life insurance company has what you call “Exclusions”. Exclusions are a way to take some of the liability off of the company when a client passes away. For instance some Insurance companies have what they call the “Act of War Clause” This exclusion means the Insurance company will not pay a claim if the client died during a circumstance that causes our country to go to war. Sounds crazy huh? well not really… Look up how many Life Ins. companies did not have to pay out claims on the Sept 11 due to terrorist attacks??? How about the Exclusion called the “Act of God” OR “Natural Disaster Clause” Look up how many companies that don’t have to pay a claim when something like hurricane Katrina hits??? those are bigger Exclusion but whats really crazy is finding ones like in my fathers policy that said he could’nt pass away due to illness or infection as well as passing away due to the accident of a two wheeled vehicle ?? and thats just to name a few! Sounds rediculous huh? but these exclusions are ways companies can reduce the risk of them paying a claim.
Hopefully you can see why a company can be extremely inexpensive. when a quote from a company is rediculously cheap you should do the research. The more exclusions they can put into the policy the less likley they are to have to pay out a claim and the cheaper they can make their policies. This is just one of the many different things you should look at when looking at life insurance. Find ALL the information instead of just the price and you will find the real value of the life policy and company.

I use term 4 sale software on my site (compulife) generally, if I type in almost any age, other insurance companies are cheaper and have more options than Primerica. This is not to say Primerica is bad, but it is like Investors Group they like to sell their own funds. Generally, more choice is better. It’s like looking for a mortgage, some banks don’t have the best rates or features vs. others. RBC is not going to offer TD’s mortgage, some one who is independent, can show all products on a spreadsheet for you to choose just like a good independent life insurance agent.

Here is an example: Male born June 15 1970 (non-smoker) $500,000 (coverage) rated regular, Term twenty, top three companies Western, RBC and Equitable costs between $59.14 to $62.55 per month…Primerica $85.50 per month.

Another example: Female born June 15 1980 (non-smoker) rated regular, Term 20, $500,000 (coverage) top companies Equitable, Canada Life, Great West Life, costs between $26.55 to $27.00 per month…Primerica $56.05 per month.

These rates may change from time to time.

The fact you get people to buy insurance is good, most people don’t buy insurance on their own without some help. The key I think is offer choice, unless you sell other insurance companies? If you do, I am sorry if I came across too strong. Which other insurance companies do you offer?

Riscario’s some of his thoughts about small business owners buying permanent insurance is bang on. Taxes, the ability to get the cash value to buy things like real estate or equipment and make the loan (to yourself tax-deductible) is a bonus.

If you buy KPMG Tax Planning 2008 you will find a whole section on life insurance (tax sheltering, etc.)

Any one who is self employed, good cash flow and especially incorporated (leaving money in the company) and does not like paying too much taxes has a good accountant likes permanent insurance if they know what to look for.

If you like the idea of the TFSA vs. RRSP this is another way of looking at it. There is nothing wrong with term insurance. Once you look at our taxes and where they are going in the future with claw backs on OAS and the age amount (see line 301 on your tax return) this starts to clawed back at $31,000 plus!

You are not putting me on the spot … Yes I do sell for Primerica … I have been with the company for almost 15 years. I can tell from your response that you also sell life insurance.

Information you have is untrue … All the term insurnace policies Primerica has marketed for ths last 20 years in Canada has guaranteed renewability to age 80 or 95.(Depending on the product)

Term4Sale.ca is great resource for comparing features of insurance policies on the web.

I agree that Renewability is important feature … but becoming “self insured” is even more important. With proper planning you won’t need the coverage at age 80, something we call “The Theory of Decreasing Responsibilty”.

http://www.primerica.com/public/rep/theory_decreasing_responsibility.html

Owning your financial life (being debt free, and being financially independent)is more important than “owning” your life insurance policy.

Of course this in my opinion.

Sorry to put you on the spot but don’t you sell Primerica? If this is the case then the insurance you sell breaks one the best points Kelly made which is

Guaranteed Renewability

“Do not buy a life insurance policy without guaranteed renewability.”

The insurance you sell I believe breaks this rule for consumers. Almost all insurance policies have this feature.
Is this true?

cheers,

Brian