Quote:
Originally Posted by Twisted Canuck
It really makes no difference to me, what other people want to buy or not. I haven't sold insurance for over 20 years, my license is long expired, I don't get commission from anybody for giving an opinion. I only suggest people do their own research, educate themselves on what they are buying, do the math. Everybody has their own specific situation and requirements.
However, generally speaking, a young person looking for life insurance coverage to protect his/her family from the loss of income in the event of death, will 99% of the time be best served by buying term insurance, and investing elsewhere with the difference in premiums between a term product and a whole life/uni product. It's a simple math thing based on historic returns.
There is a reason why the commission on selling a whole/uni product is exponentially higher than selling term, and why most insurance people push those products. It isn't because it benefits the policy holder more.
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I will agree that in the majority of "young person" situations that term insurance tends to be the best starting point. 99%no, but majority.
Investing elsewhere with a difference? On what? GICs? funds? Stocks? How are these investments taxed assuming outside of a TFSA? While its plausible this fellow doesn't have his TFSA maxed, you don't know that, so I would suggest you've given a cookie cutter answer. 99% of the time? I don't agree with. Need to get all the facts.
I'm not sure what these commission rates were when you sold insurance 20 years ago, but I can tell you that they are the same on a percentage basis. Obviously the permanent solution comes with higher premium which will equate to a higher premium. However, I wouldn't sell a farmer the cheapest combine, but rather the right one for the job. If its more expensive and I've made a larger commission then I apologize.