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Life insurance is actually not that hard

Just as your agenda helps you reach short and long-term goals, your financial plan helps meet your wealth management objectives.

Did you ever have your grandmother urge you to be careful and not to put all of your eggs in one basket? Well it turns out was right! When it comes to the ability to generate cash in the future, diversifying your investment assets is key. Whether it reduces the overall risk by spreading it over a variety of products or even across economy sectors, the diversification power goes hand in hand with the ability to navigate your investing options through times of market volatility.

From the many types of life insurance to their actual purposes, the thought of a flexible asset that can efficiently build, preserve, and distribute your wealth has been attracting its fair share of attention. As one of the few assets with a guaranteed value and predictable cost, whole life policies can provide loans in the event of a sudden, major expense but also retirement planning opportunities.

With predictability on its side, life insurance policy has the unique benefits to become eligible to be a paid up policy at a certain age, such as 65. Additionally, the ability to supplement income in the form of tax-free loan advance - without liquidating real estate asset - makes permanent life insurance one of the most efficient options for people trying to grow and preserve their wealth. A powerful investment tool to both your human and financial capital, a life policy can play a significant role at enhancing your assets as you invest safely and improve long terms returns without sacrificing cash accessibility.

Nearly effortless

Are you afraid of investing? Anticipating the impact of major market swings? Fear no more. With the assistance of the right experts, getting a sense of how investing in permanent life insurance would benefit you is as easy as putting together a jigsaw – it’s about choosing the pieces that are right for you.

Yet, for those who might still have doubts, here are just a few of the benefits of investing long-term and diversifying your investment portfolio with alternative assets such as whole participating life insurance:

1. Kill two birds with one stone: get life insurance and have investment taken care of for you

2. It doesn’t expire, and it has a cash value portion

3. Life insurance is not volatile like the stock market, its returns have a 5 year smoothing effect giving consistent returns

*Cash value and death benefit should increase year over year

4. Premiums never change

5. Owners can borrow against the policy without incurring any taxes and passes on free of income tax

*Owners can also access tax-free loans while they are alive

“The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.” - Benjamin Graham


What if an alternative asset was the best place for your money?

At least once in their life, every single person in the world will think about investing. Yet, for many investing intimidates, scares, feels out of reach and uncertain. While Canada enjoys a high rate of school enrolment and an excellent living standard, an increasing number of Canadians express doubts as to whether they could and should have taken action to enhance their financial well-being.

According to the latest Financial Stress survey commissioned by Financial Planning Standards Council (FPSC), the top regret that 8-in-10 Canadians have in common is to not have saved and invested more money as well as not have bought real estate or land. The roots of the problem include a lack of knowledge and a natural fear to make a mistake as a novice investor. In a rather complex and constantly changing environment, the investment market remains extremely competitive – making it very challenging for the average Joe to overcome.

"Many people feel like they have no control over their financial situation, whether because fretting about money has become an ingrained habit, or as a result of not having a solid plan in place regarding what they bring in and how they manage it," said author, personal finance educator and FPSC's Consumer Advocate, Kelley Keehn.

After a lifetime spent working hard, building something big and putting your money away for the future, where is the right place to invest it? The good news is that, regardless of your investing knowledge or the amount of money you have, there are simple ways to get past those initial fears, develop a strategy that fits your goals and start investing. This is where a different kind of asset comes in – permanent life insurance.

An established history and well-known name, yet a relatively misunderstood wealth management strategy, participating whole life insurance is increasingly seen as a powerful investment tool and a golden opportunity to help Canadians investing in the future. With estate planning benefits and low investment balances risk, many smart financial planners already use this alternative investment asset class that not only allows long-term growth, but also guarantees protection in the event of market downturns.

If you are investing for retirement and actively involved in asset diversification (or are planning for it), tax-free loan advance and long-term investment security offered by permanent life insurance will make you think twice. In fact, not getting it started in the first place would be your biggest investment mistake. The most powerful tool you have at your disposal resides in the simple act of saving money.

"Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred. Ultimately, nothing should be more important to investors than the ability to sleep soundly at night." - Seth Klarman

The impact of an aging population (fh).jpg

The impact of an aging population:

Why securing your own retirement income is crucial?

There will be twice as many seniors as toddlers and preschoolers living on Earth by 2040. When a recent study conducted by Torsten Sløk of Deutsche Bank shared that historical ratio, economists sounded the alarm that it could be the sign of serious economic and financial strains: the threat of secular stagnation. That remains to be seen, what is inevitable though, is that the world's population will have to deal with demographic challenges such as the increase in pension costs and the expected slowing of economic growth. Even in an era of incredible technological marvels, the foreseeable incapacity to support the population’s demand for goods and services due to a shortage of workers, will necessarily slow the pace of economic growth. After all, retirees, though they are no longer actively involved in the production cycle, still need to consume.

Why aging demographics matter?

In the last century, the life expectancy of men and women has benefited from advances in medical knowledge and technology. With a continuing increase, a Canadians’ lifespan has been increased from 57.1 years in 1921 to 82.25 years in 2016. While all this is positive, it also means that the nation will face a decreasing number of workers who must pay higher taxes to support an ever-larger dependent population of retirees. Based on the most conservative assumptions, governments may foster a tendency to direct public spending towards familiarity rather than dynamism and, as a result, overlook boosting investments in education and infrastructure.

Too much saving and too little investment

At a time where the aging demographics and need for labour are forecast to play a role in a significant economic downturn, it's only wise to begin thinking ahead of the one’s personal financial future. Faced with the challenge to support an increasing number of retirees, governments may enact anticipatory measures – there is certainly some thinking and some research going into it – yet nothing is guaranteed. Demographic pressures will not only guide local and global initiatives but they will also shape political, economic and social actions for an undetermined period of time. With increasing life expectancies, uncertainty over health care costs and stock markets subject to major fluctuations, Canadians need guaranteed retirement income more now than ever before. What’s the easiest way to achieve your own financial well-being? Invest in yourself. This is exactly what you do with a life insurance policy – you choose an alternative investment option that offers tax-advantaged savings and gives you the opportunity to grow cash value over time.

Now, what is keeping you from investing in your retirement prosperity?

Ask yourselves these two key questions:

● What do you want to do with your money while you are alive?

● What do you want your money to do when you are gone?

We’re here, should you require a little help making sure your answers have as much

substance as they have good intentions.