Life Insurance
 

I'm in need of a independent opinion on 2 policies. I'm not sure what I need to consider when deciding!

In case there are some reps on here, or want to impart your knowledge on me, here are some facts:

- both are whole life policies
- both cost the same amount per month

Choice X
Coverage: 75 785
Guaranteed cash value yr20/40/60: 26,033/45,182/61,409
Total coverage yr20/40/60: 96,596/170,678/320,213
10 year return: 6.39%
dividend scale: 6.50%
in business: 5 years


Choice Y
Coverage: 50 000
Guaranteed cash value yr20/40/60: 18,367/33,016/43,806
Total coverage yr20/40/60: 94,918/177,000/296,007
10 year return: 7.5%
dividend scale: 6.75%
in business: 8 years

One has higher coverage, higher guaranteed cash value, higher total coverage but lower performance history.

The other has lower coverage, lower guaranteed cash value, lower total coverage but has higher performance history.


HELP!

Disclosure: Licensed insurance advisor :)

By the looks of the dividend scales you are looking at a plan from Sunlife and a form of Greatwest/Canada life/london life?

You're comparing guaranteed cash value in one and projected coverage in the other. Might as well take the comparison further and look at projected Cash value as well. There are -1% etc options you might also want to request from your broker.

Are you quick paying these plans? 20 year timef rame etc

Take a look at the asset mix for both par accounts. Also take a look at dividend history (if you give me the names of the companies I can provide these for you).

Any other questions just reply I'll try my best to answer.

EDIT: Also be aware participating whole life is an asset and not the most cost effective way to provide permanent life needs. It is however one of the best ways to transfer assets to the next generation. Make sure you're getting the right product for your currents and future needs!

I'm not an insurance advisor, but having gone through this process with a broker myself, why are you considering whole life insurance at all?

Why not just go with a conventional term-20 policy and save the rest in registered accounts that you can manage yourself? It's cheaper unless you have exhausted all of your other options for reducing your taxes. And if you want to preserve your wealth, it's better to spend a few hundred and hire a lawyer to create a will, power of attorney, etc.

registered accounts are for my retirement + my future wife's retirement.

the whole life is to ensure that the kids are taken care of and will not cause a strain on the registered accounts. whole life is never for you...it's for who's left after you.
Getting in at a young age is much more cost effective.

i'm also not looking at it from a tax perspective, purely what can i do to make sure the family is taken care of after i'm gone... i'm not planning on leaving millions and millions..hell it wont even be enough to buy a home in vancouver at todays prices.

everyone should have a will ..it's not a wealth preservation tool... it's so your loved ones don't have to deal with probate.

i hate insurance as much as the next guy, but it's a necessary evil.

As a family man myself, I understand the need for insurance. But, the difference between whole life policies and term policies is pretty significant. That difference between the two policies can be invested for your kids in other ways, such an RESP. The government gives you a 20% return on RESPs which is way higher than what you would get under your current whole life insurance policies. Or, you can open up non-registered accounts for your kids. If you live for another 20 years, you'll be able to weather any downturns in the market and achieve historical returns on your self-managed investments for your children which are higher than the payouts of your policies above.

After going through the process myself, in my opinion, whole life is a product that serves a small minority of wealthy families. For peons like us, there are other ways to ensure our survivors will be taken care of if we die before we're ready.