July 17, 2007, 2:25 am

My Choice of a Life Insurance Policy Part 1

by: The Financial Blogger    Category: Insurance
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I recently read a two part article on milliondollarjourney.com in reference to Life Insurance Policy. I thought I would add to it by sharing my own experience in regards to life insurance policy. Estate planning and insurance are parts of financial planning that we often forget if we are not dealing with a financial planner. Nobody wants to discuss about death, especially when we are talking about their own death! Unfortunately, this will be the last chapter of the book of our lives. Trust me, you are better off if you leave money for your family behind you than financial problems!

I first realized that when I got married three years ago. As my wife and I were now making one, I thought that I could not let her down if I pass away. We then decided to subscribe to our first life insurance policy. We were living in an apartment, no debts beside a car lease and no children. We didn’t need much to cover for each other’s death. We took 100K each universal life (UL) insurance policy. I found the premium expensive but the UL would last forever and we would always get 100K each when we pass away.

It was surely not the best choice by far. When you seriously think about it, 100K in 50 years (I’ll be 75) will not mean much! With inflation rate, the price of a 2067 Mustang Shelby 10.0 Limited Edition will probably be more than that! Not only that, but are we really going to need 100K at that time? When we signed for the policy, my wife was 23 and I was 22. We are already planning our retirement at that age. I do not think that a 100K will be significant in 30-40 years from now.

Then, we had our son two years ago. We did not think about our life insurance policy first. In fact, we were too busy taking care of him and definitely lacking of sleep to think any further! We first bought a land and move to our first house. We were thinking of things that would provide us with a direct impact on our lives such as a backyard to play with our son. After only one year, we thought about having a second child and then decided to sell both the land and the house to buy something bigger.

During the same month we moved, my wife got pregnant. We were then clearly off with our little 100K each universal life insurance policy. We decided to change all of this for another type of insurance. This time, we actually established our needs and chose the right product. I’ll post the result of our analysis tomorrow. Until then, I would like to know if you have a life insurance policy and if so, what type and why did you chose it. Cheers,


You can never be too careful when it comes to your well being. Buying life insurance can provide you with the safety net you need. Plus, finding affordable insurance quotes is easy! Don’t wait. Get your insurance today.

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Hey FB. I just moved in to a rental apartment with the fiance and our setup is pretty easy. I get a full year’s salary from the company’s plan if I die, so we’re covered. We own more than we owe and don’t have any dependents, so it’s not really even a consideration.

I usually laugh when I get the Credit Card company calling asking me about insurance for my card or telling me about the bank’s new life insurance policy. They can’t (of course) explain to me why I would need such insurance 😎

by: The Financial Blogger | July 17th, 2007 (10:21 am)

Gate VP,
It seems that you have enough coverage for now. I guess you are planning to get a bigger amount once you will have children?

Hello FB,

Here is the deal with Universal Life Insurance (who should look at it)
1. You want to build cash value for retirement
2. You have at least 15 years to invest in the policy
3. You earn a high income ($100,000 per year)
4. You are already maxing out contributions to your RRSP
5 You understand the risks accoicated with mutual funds
6. You have a need…cottage, realestate, dependent children who may need further financial help later in life.

The sad part about the mutual funds, that other advisors don’t talk about or just don’t know is there is a number of funds that have being around 15 years or more and have returned over 13% since 1989! Two bad years 1990 -1.98 and 1998 -13.81. These funds and many others are only in UL policies.

A $10,000 investment (March 31 1989 to June 30 2007) would be would be worth $198,278 today! (after fees). Compare this to the TSX composite at $38,865 over the same time frame. The problem is you need $150,000 to invest! but through a major life insurance company you can get in for less than $100 per month. The fund family is ABC funds the one I am talking about is ABC Fundamental. The rest of the fund family also has excellent returns with lower risk than other funds that people can buy.

Like all stories, “Universal Life is a waste” (like WMD in Iraq) is if you repeat the same thing over and over again it seems to a fact.:oops:



by: The Financial Blogger | July 22nd, 2007 (6:25 am)

Hi Brian,
Thank you for the additional information. I have been dealing with several insurance broker through my employer and I have been taught the same. However, I don’t make 100K and I am barely maximizing my RRSP. Basically, I am not there yet 😥

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