It is hard to say if your UL insurance is good or not. Since you are getting older you can bet life insurance will get expensive.

A lot of weathly families buy UL or whole life insurance on their kids for estate plans.

The question I would have would be how much insurance do you have, is it level or increasing? Where is the “extra” monies going, ie, gics, mutual funds?

Look at life insurance to cover a debt, or for tax-shelter, or esate planning (in the case of UL or whole life).

Also, what will you earn in the future? If you are going to making some big money, the UL policy may look good if you buy a cottage or other real estate. Many banks make you buy or have life insurance for loans for businesses. If you have a term policy for say ten years this will go much higher at the end of the policy.

Plus, I have seen some UL or whole life plans taken off the market because they were priced too low!!

Hope this helps,

Brian

I am 25 years old and I have a universal life insurance. My parents bought it for me when I was 4 and I am supposed to keep on contributing to my life insurance for about 350$/year until I reaches 100 years of age (or die). The current policy value is of about 9300$ and the death benefit of the poicy is 93000$. As I keep contributing to it and become older, the policy value will increase and the death benefit will increase as well. By the time I reach 100, if I do, the policy value will be of about 700000$, and so will be my death benefit.

So here is the problem. I crunched some numbers and computed that the life insurance pays between 6-7% interest on the cumulated premiums that I pay. This does not seems a lot to me, as this 6-7% interest is not guaranteed and fluctuates depending on the dividends paid by the company. I ran another simulation: what would happen if I was to sell off the life insurance and put everything, the value of the life insurance + the premiums, in the stock market. In the event that the stock market pays back, on average, 8%/year, then by the time I will reach 65 years old, the value of my stock portfolio will have surpassed my death benefit. Given that I can make these contributions within my TFSA, these contributions should not generate any taxes when I die.

So what is the advantage of keeping that life insurance over selling it off and simply buying term life insurance when I need it?

I have followed your website for some time and I respect what you have done with it.

However, it seems that your critique of http://www.termchoice.ca is regarding the absense of permanent insurance solutions.

Nowhere on that site does it say that it is promoting permanent insurance. It is offering simple solutions for term (hence the name).

I feel that most people are looking for easy solutions. 95% of the people out there are not looking for strategies as complex as the ones you suggest. For the ones that are it is necessary to consult professionals such as yourself.

I feel it should be much easier for folks to shop insurance without having to go through complicated and cluttered websites that promote everything under the sun. Also, as I am sure you are aware, most agents don’t always promote the right insurance for the right reasons.

You are right in saying that term doesn’t solve every problem. However, for young families who need a lot of insurance for many different reasons it does make sense.

People’s insurance needs change a great deal over the course of their lives. Term definately plays a role in some of those stages. As does permanent.

I visited your website and it clearly promotes term insurance over other mortgage insurance. As a method of self promotion I wouldn’t critique websites that are using the same methods as yourself.

…….same goes for using an excellent blog to promote your business.

Mike McKay

The problem with the calculator which I have and 25 Canadian web sites have (done by one person) is this should be only used as a rough guide.

Some calculators default to a preferred rating, in order to show a better rate…watch out, only the insurance companies can honestly honor those rates and many people do not get the preferred rates.

Like a hammer, term is a tool not a solution for everything. Example say you have a cottage and three kids. Over the years one of kids uses the cottage every summer the kids don’t. The cottage has gain over $250,000 in value. Who pays the taxes at time of death? Term is too expensive! Assume a 70 year old male is healthy and is a non-smoker he wants term 10 for $250,000 (he must die in ten year for this to work) he will pay about $350 per month!! If he tries to get term insurance after 71 he is too late!!

Another example, a family business built over the years mainly good will. Two children work in the business one does not. Since most of the family’s wealth is in the business how do you split assets at death? Term will not fix this problem.

Another example, a successful business man age 59 remarries his new wife is 43. He has two children ages 25 and 28. At his death assets go to his wife. She has two kids from a earlier marriage. What kind of mess is this going to be? Guess what, term will not fix this problem.

I could go on all day why term does not help many problems. For some it is a solution. But the world is not perfect.

Also, your cousin “Terry” wrote almost the same comments as you did within two hours to another site http://www.wheredoesallmymoneygo.com

regards,

Brian

No Home insurance! Let me see, you are not covered for valuable personal items, such as jewellery, artwork, furniture and computers.

Also, property insurance protects you against personal liability should anyone be injured while visiting your property or should you accidentally damage a neighbour’s property.

Also. fire, lightning, windstorm and hail.

This may cost you about $1,000 or more a year depending on the value of house etc.

You are also not covered for theft etc.

If you have any children you need to review your ideas about insurance (all types). Please thake the time to talk to a professional and bring your educated spouse. You may look at the “cost” of insurance as minor vs. what is at stake.

regards,

Brian

But I do come from a family who doesnt have home insurance.

http://www.milliondollarjourney.com/determining-our-life-insurance-needs-ii-scenario.htm