You carry it with you for life

The Independent

By John Ardill

You don’t need me to tell you that we’re in unsettling times.

Let me share my strategy that seems to work in most economic conditions.

In a broad way, Ian explains to his clients that financial plans are like a three-legged stool:

•  Publicly traded Securities

•  Private capital investments 

•  Whole life insurance

I’m going to describe the third leg: my whole life insurance and how it is working for me. 

1) Whole life insurance is more than just the third leg of a stool – it acts more like my personal bank. Why does it work so well, you may ask? Let me outline some of my favourite features:

2) The equity or cash value in my whole life insurance will never go down in value, it will only compound into the future. Think about that for a minute. In uncertain times, it’s nice to know that you can count on your equity in whole life. This benefit allows me to sleep at night. Why is this benefit unique? Just show me any other financial instrument that is guaranteed never to go down in value!

3) Compound interest: one of the eight wonders of the world, as Albert Einstein said. I like this because my money is working for me 24 hours a day with no management time from me. Why is this benefit unique? Just show me any other financial instrument that will compound your entire life, without interruption!

4) If you manage it properly, the compound interest is tax-deferred or tax-free. Why is this benefit unique? Just show me any other financial instrument that will compound tax-free without strings attached like RRSP or tax-free savings accounts.

Whole life insurance allows you to become your own banker. Let me explain this last one in a little more depth. Say I have accumulated a sum of cash or equity inside my whole life policies – of course, that money is working for me by compounding for the rest of my life tax-free. When I have need for a large financial transaction, for example a need to invest new money, I leverage my cash value. Note that I do not withdraw the cash value, because that would interrupt compounding; instead, I leverage the policy accessing cash through a secured loan and use that money for my investments. Yes, this causes an interest charge which is tax deductible. 

Another example: say I want to buy an expensive car. Well, I can leverage my cash value to buy the car and then pay the money back, rather than using the bank down the street where they make money from the transaction. By taking the bank out of the equation, I profit from the transaction and not the bank. 

There are many creative examples on how to utilize the equity in my cash for life insurance in a smart and efficient way. As I’ve heard it said before: when you have money, you have options. 

So why is benefit #4 unique? Just show me any other financial instrument that will allow you to leverage without any questions, at any time.*

In closing, you may be thinking: I thought life insurance was a death benefit, not a living benefit. Well, this is true: life insurance plays a key role in estate planning. But, you may end up living a long time before you need the death benefit, so in the interim I am explaining the living benefits that are not as commonly known. These living benefits make up a key part of your financial plan.

If you have not looked at whole life seriously or you have taken a look and have not taken action, I am strongly encouraging you to reconsider the strategy. Time is not on your side. 

Take advantage of Ardill Group’s experience. It is important that your life insurance is designed correctly because you will have it all of your life.  There are over 52 considerations to be made in designing a life insurance policy, so make sure you get the right advice. Ian and I can share our insights with you, and knowing what I know now, this will have you in even better shape financially. So take a look at the strategy, because it works. 

My only regrets are not starting this program sooner and max funding the strategy. Note that the max funding does not reduce opportunities or flexibility, it only strengthens your financial wellbeing.

You can find naysayers about whole life insurance on the internet, but I can tell you these people just don’t get it. It would be interesting to compare their more traditional financial strategy with my three-legged stool. I’d bet they’re not sleeping nearly as well as I am at night during these difficult times.

Thank you for reading, and let me know if you have questions for me.

Best regards,

John Ardill

Founder and Mentor

Ardill Group

Direct: 1 416 400 5882
Office: 1 905 907 7000

john@ardillgroup.com

*Using borrowed money to finance the purchase of securities involves greater risk than a purchase using cash resources only. If you borrow money to purchase securities, it’s your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the securities purchased declines.

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