April 21, 2021

I also cover this subject in a YouTube video.  Click here to watch!

Do you think you know the difference between Term life and Whole life Insurance? Well, I’ll give you all the facts so that you can make an informed decision before you sign on the dotted line.

Life insurance is one of those necessary things in life, because life happens, and we can’t escape death…we just don’t know when it is going to happen.

Think about this – it’s better to have life insurance and not need it, than need it and not have it.

Term life insurance provides coverage for a specific amount of time, usually 10 to 30 years. If you or your spouse pass away during this time period, your beneficiaries will receive a tax-free payout from the policy.

Term life insurance is much more affordable than Whole life. Typically, this works out to about $7 per month on a 20 year Term policy versus about $95 a month for Whole life cash value.

However, Term life has no cash value until death occurs, so it’s not worth anything until you need it, which is I guess why you purchased it.

After you read this blog or watch the video, check out the video I created titled “How to tap into the cash value in your Whole life policy” to learn when is the best time for you to get started.

A lot of people say “why should I buy life insurance?  It only benefits my beneficiaries.” Let me introduce you to Whole life.  The way we design it, we want you to live so you can tap into it during retirement.

Whole life is a form of permanent life insurance which comes with three components – Premium, Death Benefit and Cash Value Accumulation (that last part is the savings aspect). When you pay your premium, a portion is applied to the death benefit and cash value. Every year like clockwork a Whole life policy receives an annual dividend. Right now, the current dividend is around 6% to 6.25% and insurance companies in Canada have been paying annual dividends for over 157 years. I usually refer to a Whole life policy as the Fixed Income Anchor in your overall investment plan.

Now, depending upon how you design it, for the first 5 to 10 years a majority of the premium is applied to the death benefit which is referred to as the cost of insurance… however over time the cash value will receive a greater portion of the premium and this will build up a bucket of money that we can tap into when we reach retirement.

Beneficiaries are only entitled to receive the death benefit portion of the policy when you pass away.

You can cash in or surrender your policy at any time to get your money out, but you would lose the insurance coverage. In my next video, I will educate you on how you can tap into the cash value without losing the insurance coverage.

If you’d like to get either a Term life or a Whole life policy, designed for max cash flow in retirement, click on the link below to apply to become my client. 

Thanks for reading. Let’s make sure that your money outlives you in retirement!

For the best life insurance advice and information, subscribe to my YouTube Channel and hit the notifications bell to be notified when we post new videos.  The channel allows me to share my passion for personal financial planning and I produce content that I would want to watch – and because of that, I promise to give you 110% effort in every video that I make.


By John Moakler, BMath, CFP, CLU
President and Senior Executive Financial Planner
Moakler Wealth Management
1 416 840 8544