We asked one of our good friends (male, age 44) some questions about his whole life insurance policy and here are his answers:
When did you buy/invest in a whole life policy and what was your reason for doing so (why)?
– I was advised by financial advisor in 2008 that one item missing from our total financial planning was a whole life policy. We had been advised that this was another way to not only ensure our kids were looked after when we passed but that it would also build up a cash value that at some future point we could borrow against to supplement our retirement income. My wife and I both liked the idea of leaving the kids a nice nest egg after we passed as the guaranteed death benefit grows each year. We also chose the “second to die” option as this kept the premiums lower and also fit with what we were trying to accomplish.
Did you look at other options such as Term Insurance and if so why did you choose a whole life plan?
When did you buy/invest in a whole life policy and what was your reason for doing so (why)?
– I was advised by financial advisor in 2008 that one item missing from our total financial planning was a whole life policy. We had been advised that this was another way to not only ensure our kids were looked after when we passed but that it would also build up a cash value that at some future point we could borrow against to supplement our retirement income. My wife and I both liked the idea of leaving the kids a nice nest egg after we passed as the guaranteed death benefit grows each year. We also chose the “second to die” option as this kept the premiums lower and also fit with what we were trying to accomplish.
Did you look at other options such as Term Insurance and if so why did you choose a whole life plan?
– For this purpose we only looked at the whole life option as it is an investment vehicle as well as a way to ensure our kids and their families are looked after into the future. We also carry term insurance as our whole life policy has the “second to die” clause so in the event of the early death of one of us the other is looked after as well. I believe we are fully covered now for those events.
How does your whole life policy fit into your financial plan now?
– The whole life fits in well and now that we are several years in I am very glad we did it. It is always a hard thing to start as it deals with death and the future. But once you start you are glad you did. Since we have a target of cash value and death benefit we only pay into the program for a set number of years then we can take the “premium holiday” which allows the cash value and death benefit to grow each year on its own without any additional funds. The premium holiday is nice as it allows you to set a goal, hit the goal and then stop adding additional funds. Also it fit in very well to our financial plans when we started as we had wanted to have some diversity to our plan beyond RRSP’s and TFSA’s etc…
Are you happy with your decision to purchase a whole life policy?
– Yes we are very happy now that we look back on it. It feels good to have that part of your future looked after and ensuring the kids and their families are looked after at a difficult time brings a lot of comfort.
How does your whole life policy fit into your financial plan now?
– The whole life fits in well and now that we are several years in I am very glad we did it. It is always a hard thing to start as it deals with death and the future. But once you start you are glad you did. Since we have a target of cash value and death benefit we only pay into the program for a set number of years then we can take the “premium holiday” which allows the cash value and death benefit to grow each year on its own without any additional funds. The premium holiday is nice as it allows you to set a goal, hit the goal and then stop adding additional funds. Also it fit in very well to our financial plans when we started as we had wanted to have some diversity to our plan beyond RRSP’s and TFSA’s etc…
Are you happy with your decision to purchase a whole life policy?
– Yes we are very happy now that we look back on it. It feels good to have that part of your future looked after and ensuring the kids and their families are looked after at a difficult time brings a lot of comfort.
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