Episode 71: How to Get a Free Lottery Ticket & Financial Security Blanket: A Deep Dive Into Critical Illness Insurance

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Imagine you were able to pay each month for a lottery ticket that would pay out a large sum of money to support you financially in the event that you became critically ill over the next 15, 25, or even 50 years and if you are lucky enough to never need that large sum of money, you get all of your money back?

While there are many rabbit holes to dive down when it comes to financial tools including savings, investments, and insurance, there is one insurance tool that provides a pretty amazing living benefit should you become critically ill and if not, gives you all of your money back. 

Whether you’re grappling with the dilemma of where to allocate your hard-earned money to maximize investment returns or fretting over the possibility of a critical illness wreaking havoc on your family and finances, this podcast episode serves as an opportunity to share one of the most under-utilized insurance tools available to Canadians and incorporated business owners that leaves nothing but upside for you – including some income tax savings opportunities. 

What you’ll learn:

• What is critical illness insurance and why do we consider it like a free lottery ticket? 
• How does critical illness insurance work and how can it benefit Canadians personally as well as corporately? 
• When does it make sense for a Canadian to add critical illness insurance to their wealth building plan or corporate income tax minimization strategy?
• Why split dollar or “shared ownership” of a critical illness insurance policy between a corporation and its shareholders can benefit you from a taxation perspective.

Resources:

• Book a Discovery Call with Kyle to review your corporate (or personal) wealth strategy to help you overcome your current struggle and take the next step in your Canadian Wealth Building Journey including helping you to better understand the role of critical illness insurance in your personal or corporate wealth building plan.
• Looking for a new mortgage, renewal, refinance, or HELOC? Reach out to Jon to share some options.
• Follow/Connect with Kyle Pearce on LinkedIn for daily posts and conversations about business, finance, and investment.

Calling All Canadian Incorporated Business Owners & Investors:

Consider reaching out to Kyle if you’ve been…

• …taking a salary with a goal of stuffing RRSPs;
• …investing inside your corporation without a passive income tax minimization strategy;
• …letting a large sum of liquid assets sit in low interest earning savings accounts;
• …investing corporate dollars into GICs, dividend stocks/funds, or other investments attracting corporate passive income taxes at greater than 50%; or,
• …wondering whether your current corporate wealth management strategy is optimal for your specific situation.

By hopping on a discovery call with Kyle, he will review your specific personal and corporate financial situation in order to determine if there are some quick wins available for you to minimize taxes personally or corporately, provide ideas for how you can increase your personal cash flow, and ensure that the net worth of your estate continues to grow in tandem.

Let’s Connect For A Discovery Call!

For those interested in having a review of your financial wealth plan, learning more about potential joint venture (JV) opportunities, or a mortgage review, book a free discovery call now.

Watch Now!

Detailed Episode Summary 

Quick recap

Kyle and Jon discussed various investment strategies, including real estate, CDs, and critical illness insurance, highlighting their potential risks and benefits. They delved into the financial implications of critical illness insurance, the versatility of whole life insurance, and the benefits of critical illness insurance for key personnel in businesses. The discussion concluded with their philosophy of finding more efficient ways to handle tasks and an invitation for listeners to review their podcast and schedule a discovery call to discuss their financial situations and goals.

Summary

Investment Strategy and Financial Literacy Discussion

Kyle and Jon discussed their investment strategy, focusing on real estate and CDs, and the potential risks and benefits of each. They also introduced a unique investment opportunity involving a ‘casino game’. The discussion concluded with a reflection on their podcast’s mission to promote financial literacy and the importance of balancing rational analysis with emotional considerations when making financial decisions. They also hinted at a future discussion about an underutilized tool or opportunity.

Exploring Insurance and Investment Opportunities

Kyle and Jon discussed a potential investment opportunity and the value of certain types of insurance, specifically disability and critical illness insurance. They explored the benefits of group benefits and the importance of individual coverage, with Kyle explaining the intricacies of disability benefits and the concept of critical illness insurance. Kyle emphasized the importance of protecting one’s health and income, and suggested that term critical illness policies could be a practical solution. They also discussed the emotional discomfort associated with the potential outcomes of illness.

Discussing Critical Illness Insurance Policy Costs

Kyle and Jon discussed the financial implications of a critical illness insurance policy, focusing on its cost and potential returns. Kyle explained that while the policy seems expensive, it serves as a forced savings account with the potential for a significant return if the insured contracts a critical illness. He clarified that while the insured doesn’t receive the premium back if they cancel the policy early, the return of premium option ensures they get back all the money they’ve put in if they keep the policy for at least 15 years. They concluded that while the policy may not be suitable for everyone, it could be a beneficial addition to a wealth-building journey for those with existing investments and a solid financial plan.

Exploring Whole Life Insurance and Savings Funds

Kyle and Jon discussed the benefits of investing their money in a savings fund with an expected return and the versatility of whole life insurance as a tool for various purposes. They explored the use of whole life insurance as an emergency fund, a tool for real estate purchases, and for critical illness cover. Kyle emphasized the importance of considering the opportunity cost of investing in the stock market versus having insurance in place, especially in cases of unexpected illnesses. Jon expressed interest in the option of getting his money back with a return of premium when he acquires critical illness insurance. They briefly touched on the benefits of insurance for business owners.

Critical Illness Insurance Benefits for Key Personnel

Kyle and Jon discussed the advantages of critical illness insurance for key personnel in various businesses. Kyle explained the financial implications of the policy, including shared ownership models where the company covers the majority of the premium cost, and potential tax benefits. He emphasized that while the policy details may change in the future, there is still a net benefit to the business owner. They agreed that Jon, due to his active involvement in several companies, could significantly benefit from such an insurance policy.

Discussing ‘Secret Sauce’ Concept

Kyle and Jon discussed a new concept they refer to as “secret sauce”, which they describe as finding alternative and more efficient ways to handle tasks and responsibilities, thereby saving time and money. They emphasized the importance of looking at the big picture and considering all aspects of one’s financial journey, rather than focusing on a single tool or solution. They invited listeners to review their show, Canadian Wealth Secrets, and schedule a discovery call to discuss their specific situations and goals. They also reminded listeners that their advice is for education and entertainment purposes only, and not to be construed as legal, tax, investment, or financial advice.

Transcript:

00:00:00:09 – 00:00:28:11
Kyle Pearce
All right, Canadian wealth secrets seekers. You probably know by now that John and I are not gamblers. We are not speculators. But like most true investors, we look to take calculated risks that rely on probability and expected values for us when we underwrite a deal. For example, in real estate, we know with a very strong level of confidence that that specific deal is going to be successful if held long enough.

00:00:28:13 – 00:00:47:12
Kyle Pearce
And if we do what we know how to do. Well, of course, any investing, even if, you know the asset class really well, is never a guarantee. Heck, even a GIC is backed by a bank. And of course there is a chance, even if it’s a very small one, that you might not receive that money back.

00:00:47:14 – 00:01:23:10
Jon Orr
However, when it comes to CS or certificates of deposit like CDs in the U.S., we would all consider those Kyle to be essentially guaranteed Deposit 100 grand and you’re going to receive 100 grand and five K back at the end of the year like 5%. Not bad. Not bad. Nothing too exciting really, though, either. So imagine you could just pause at that same hundred thousand and you’ll either receive 500,000 or you’ll get your 100,000 back at the end of the term.

00:01:23:12 – 00:01:50:06
Kyle Pearce
Wow, John, that sounds like it’s too good to be true. And my friends, even for our incorporated business owners, it gets even better if your company doesn’t get lucky or unlucky, as we’ll explain later. Receiving that 500,000 payout to the corporation, the shareholder of the corporation can receive the $100,000 back personally without attracting personal taxes. Sounds crazy, right?

00:01:50:08 – 00:02:20:15
Kyle Pearce
Well, in this episode, we’re going to talk about an opportunity that we all have to play a pretty easy casino game. However, I’m going to be honest here, I did not play this game for the majority of my life simply because of ignorance. I didn’t know it was there and available to me. So we’re going to dig into it and you’re going to find out what this opportunity actually is and we’re going to unpack it together and how you might be able to benefit either personally or corporately in your wealth building plan.

00:02:20:17 – 00:02:37:13
Kyle Pearce
Let’s go. Welcome to the Canadian Wealth Secrets podcast with Kyle Pearce and Jon Orr.

00:02:37:13 – 00:02:52:05
Jon Orr
We are recovering high school mathematics teachers and education consultants whose entrepreneurial spirit led us to begin multiple businesses in real estate investing, digital courses and coaching and consulting after the bell rang at dismissal time.

00:02:52:07 – 00:03:18:21
Kyle Pearce
Fast forward a decade later where we’ve grown our portfolios and our time freedom to a point where we can now help entrepreneurs, business owners and investors to grow their wealth into a legacy that lasts generations. Through hidden investment and tax secrets. Your financial advisors won’t believe our true John. I’m super excited about this episode and hey friends, I get it probably a little bit click baity at the beginning here.

00:03:19:01 – 00:03:49:01
Kyle Pearce
You’re probably wondering to yourself, What the heck are these guys talking about? Are we about to head down a big massive Ponzi scheme, rabbit hole and the answer is no, you are not. We are just trying to dress up an opportunity, as we mentioned, that’s available to all of us. But again, most of us don’t actually understand. And right, like John, if we rewind back to a lot of the episodes, the whole premise of this particular podcast is Canadian Wealth Secrets, right?

00:03:49:01 – 00:03:59:17
Kyle Pearce
So we’re really trying to unpack some of the things that we wish we knew maybe a lot earlier in our journey, and we’re just trying to make them a little bit more mainstream.

00:03:59:19 – 00:04:19:08
Jon Orr
Yeah, exactly. I think when we always say, like, what’s the secret sauce? What’s the wealth? Secret sauce we’re trying to think about? Like, what are some of the things that we eat in our lives? What are the things that we want to do? The operations we want to do, choices. We want to make these things, but can we make those choices so that we not only achieve the things we want, but we at the same time?

00:04:19:08 – 00:04:49:01
Jon Orr
That’s the secret sauce we’re always looking for, is like, how do we do that and grow our wealth or how do we do that and pad for the future or how do we do that and plan for the legacy that we want to leave with our families. That’s the secret sauce we’re always after. And in this case it’s like, how do I safeguard some of the things that we hold dear and how do I safeguard my role in a business, or how do I safeguard the work that I do and at the same time not just throw money down the drain?

00:04:49:03 – 00:05:15:18
Kyle Pearce
Totally, totally. And along this journey as well in the intro, people hear every single episode. They hear that, you know, both you and I have math degrees. We were high school math teachers for a significant portion of our working lives, right? That was sort of our main job. We love doing that job. But the reason why I’m highlighting that is because you and I tend to sort of begin our exploration in the wealth building space around the numbers.

00:05:15:18 – 00:05:42:16
Kyle Pearce
So we start from a rational perspective, but even when we use the numbers and we crunch numbers and we look at the expected values, right, we look at the probability of something happening, we then still have to battle this emotional side, right? So something I’m seeing in both you and I and even Matt as well, is that we run the numbers, but then we still also have to pause and sort of think about how we feel about something.

00:05:42:18 – 00:06:00:01
Kyle Pearce
Right. And even though probability might suggest over time that something is going to work out, we are actually now I don’t know if it’s just getting old, if if this is what all the financial planners early in our lives were telling us about that you take on more risk. Typically when you’re younger and less risk as you get older.

00:06:00:03 – 00:06:27:24
Kyle Pearce
We tend to look for the easiest ways that we can protect and multiply our money. And today we’re going to talk about one of those opportunities that again, I think is just misunderstood. Much like all life insurance, as we’ve talked about at length on some previous episodes, we’re big fans, massive fans, but it does take a lot of time and effort to understand what it is and why you’re actually doing it.

00:06:27:24 – 00:06:55:18
Kyle Pearce
So today we’re actually going to talk about another tool that actually and like we said in the beginning, I took an actual example and this particular individual could put in $100,000 into this thing, into this tool. And if a set of conditions were to happen, it would essentially fire back. And if those things didn’t happen after a given set amount of time, he would get his hundred thousand dollars back.

00:06:55:20 – 00:07:05:03
Kyle Pearce
And for some of us, when you actually think about that just from a numbers perspective, you’re going, why wouldn’t I do it right?

00:07:05:03 – 00:07:30:24
Jon Orr
And I think so sometimes when you think about that, you’re thinking, okay, wait a minute, isn’t that the property that sometimes whole insurance or permanent life insurance has? And but then at the other time term insurance doesn’t do that. But then also, how do I account for paying money like so, for example, you’re talking about this tool that we want to put money into, but it’s also safeguarding, I’ll say, the work we do because so you’re talking about having critical illness insurance.

00:07:31:02 – 00:07:32:13
Kyle Pearce
You just let the cat out of the bag.

00:07:32:13 – 00:07:53:16
Jon Orr
John That’s okay. They need to know. They need to know what I think, why? I think it’s important to know. We don’t need to string them along too much. Kyle. But I think why that’s important to know is that if you have a T for a job like we did, you know, and I don’t think I thought about it this, and this is why I think everyone needs to know that this is what it is, because it can be a such a great wealth building tool.

00:07:53:16 – 00:08:18:02
Jon Orr
And remember, do the other thing anyway, which is in case safeguard ourselves and in, say, our businesses. Because when I was thinking about working at the school and the school board initially, like you knew that when you got those safe jobs that you got your benefits package. You never worried to think about it. You know, like if you got sick, your benefits package took care of you, you got your 90% or your 99% or whatever, it topped up to be there.

00:08:18:02 – 00:08:36:02
Jon Orr
No matter what sickness you got, you still were going to get paid. And that was part of the union. You know, the union negotiated did to get this great benefit to keep everyone safe. And there’s that side of things. But I think also a part of that, your paying into your benefits package and you’ll never get that money back.

00:08:36:07 – 00:08:37:19
Jon Orr
And I think that that’s the thing that.

00:08:37:24 – 00:08:43:04
Kyle Pearce
Most are not aware. Right? They just I just come up your paycheck like happening totally.

00:08:43:05 – 00:08:56:21
Jon Orr
Right. It’s like you’ve got this group this is the thing about a group like you get a group defined benefit plan and that plan you pay into, but it gives you all these benefits. So you don’t even think about it because everyone does it. Everyone has to do it. It’s like part of it, you know, or you can opt in and opt out.

00:08:56:21 – 00:09:25:15
Jon Orr
But I mean, like no one does. It’s like that whole power of the default is the opt in. But I mean, you don’t think about it. And when you start to think about it, because that’s what we’re doing here on the podcast, like I said right after the intro, is to think, how can I do that? How can I make sure that if I get sick while I’m like, I don’t die, I get sick in my place of business or and I either can’t work or maybe I do work, but I’m just sick and does that benefits package would kick in, but I was paying for it.

00:09:25:15 – 00:09:27:24
Jon Orr
And what happens if I don’t get sick? That was part of that thing.

00:09:27:24 – 00:09:43:12
Kyle Pearce
And and what is it that I’m actually going to get, John? Because I’m going to be honest and say, and I don’t know about you. We’ve never really talked about it in the particulars, but it was only after I left again, same idea as the pension idea. When you go back to the pension episode where I was like, how do I recreate my pension?

00:09:43:13 – 00:10:06:03
Kyle Pearce
How do I get something as essentially rock solid? And we ended up creating something even better than what we had as the pension. And it was like safer and had more benefits. So if you haven’t checked out that episode, go and roll back to that episode. On recreating the Ontario teachers pension plan. But when it comes to the benefits side, right, I didn’t actually know all of what I got.

00:10:06:03 – 00:10:29:19
Kyle Pearce
I had little bits and little pieces and I knew I had some things. I knew, for example, that it was about, I think three times or two and a half times my salary was my life insurance. Now, I thought for some time in my life that was enough for a life insurance. You actually realize it. You’re like, Well, unless you only are planning to work for 2 to 3 more years and your family only needs 2 to 3 more years of your income, then that’s not enough.

00:10:29:19 – 00:10:51:06
Kyle Pearce
It’s actually making people feel more comfortable and confident than they probably should be when it comes to the other benefits. So like you were talking about disability, there’s nuances to it, right? It’s like short term for a certain number of days you’ll get your 90 or 95%. But then eventually when it gets to long term, you’ll go down to, I think it’s 50% of your income.

00:10:51:06 – 00:11:13:14
Kyle Pearce
And then it kicks in from that date. They’re people who don’t have benefits like that. They should definitely be looking into it or figuring out where their gaps are because for teachers, for example, they take care of that short term period. But in some businesses they don’t. So in some T for jobs, you’ve got disability, but it doesn’t kick in for 60 or 90 days.

00:11:13:16 – 00:11:31:08
Kyle Pearce
And it’s like, so like, what are you going to do for those? I wasn’t planning to take three months off, but you know what? Sometimes that just happens. Now, here’s the interesting part, John. So you let the cat out of the bag. The tool we’re talking about here today is critical illness. And we like to call it a free lottery ticket.

00:11:31:08 – 00:11:36:19
Kyle Pearce
Essentially, it’s like a free lottery ticket because if you don’t know, I’m using bunny ears like.

00:11:36:19 – 00:11:39:24
Jon Orr
A backwards lottery ticket. You don’t want this to become true. Exactly.

00:11:39:24 – 00:11:59:13
Kyle Pearce
Exactly. If you put your bunny ears here, cause like, if you win, which is like you didn’t win because you contracted a critical illness. But on the other hand, if that happens, you’ll get a windfall of money, much like a life insurance policy. Right? Same idea. Even if you can keep working, if you contract one of the 20 plus.

00:11:59:13 – 00:12:00:17
Jon Orr
Like cancer, is that we’re talking.

00:12:00:17 – 00:12:16:14
Kyle Pearce
About cancers included, you’ve got stroke, you’ve got heart attack. Those are the big three. And then they got a bunch of other ones in there like blindness, for example. If you get blindness, the chance of that happening, we look at the stat on it, it’s like it’s probably not, but they throw it in there, they throw in all kinds of other ones as well.

00:12:16:14 – 00:12:37:20
Kyle Pearce
But the big three are in there. Heart attack, stroke, cancer and cancer does have some nuances to it. Different types do different things and every policy is different. But the whole idea here and something I want to underscore is that, John, you and I, when we were teaching, did not have critical illness insurance. There was no critical illness.

00:12:37:20 – 00:12:56:21
Kyle Pearce
There was disability, which serves a purpose. It helps to bridge the gap for your income. Right. So it’s like, you know, you get 90% and then it scales down. And then the longer you’re off on disability and then eventually goes to half, but it’s not taxable. So it’s like half and you’re close to maybe your after tax income.

00:12:56:23 – 00:13:30:15
Kyle Pearce
So that part’s okay for teachers, but critical illness is not something you have. So, for example, if you contracted a critical illness that allowed you to keep working and you wanted to keep working or you could keep working, right. If your doctor says, Hey, listen, Mike, there’s no reason why you won’t, I’m sure your doctor would write you a note if you wanted one, but if not, what would happen is if you have critical illness, you will get a windfall of money that comes to you, which in my mind is like, okay, I mean, not it doesn’t make me feel better about my situation, right?

00:13:30:15 – 00:13:56:08
Kyle Pearce
Because I am dealing with a heart issue or I’m dealing with a stroke or I’m dealing with some of these other illnesses so that part’s not great, but I’m sure that it would at least make my financial mind feel a little bit better. Maybe if, let’s say it is a life threatening sort of critical illness, right. Where maybe there’s a certain amount of time I have or whatever to have that windfall kind of come in.

00:13:56:08 – 00:14:22:18
Kyle Pearce
Now instead of, say, waiting for life insurance to happen after. Right. It’s like it could allow you to maybe have a better time given your really unfortunate circumstance. Right. So I know we’re kind of making this whole lottery ticket idea, but it really is a sensitive topic. But on the other hand, I was never in the mindset along the way that I needed that particular thing.

00:14:22:18 – 00:14:40:03
Kyle Pearce
I was like, That’s fine. We’ll be okay. Like we’ll just sell some real estate with that happens if my life changes and flips upside down. I don’t really care so much about my wealth building anymore because my priorities are shifting to the time I have left or the way I’m going to live my lifestyle now, which is very different.

00:14:40:05 – 00:15:08:13
Kyle Pearce
However, the way that critical illness is actually designed, when designed the way it should be in our opinion, it’s actually a no brainer because you have an opportunity to receive all of the premium back after a given set of time. If you don’t experience a critical illness, which would. So again, it’s like a win win in a way, it’s a win if nothing happens, it’s better than what you had.

00:15:08:13 – 00:15:20:04
Kyle Pearce
If an unfortunate event were to happen that at least you have this additional buffer financially to be able to take care of your family, do the things you all want it to do as a family together.

00:15:20:06 – 00:15:40:08
Jon Orr
Walk us through that example that you said. You said this was an actual kind of case study that you were working with one of your clients on. And you said the 100,000, you get the 500, but then you get the money back if you don’t walk us through what that looks like. And then what we can do is after we see what that mean, when I say 100,000, I’m like, Am I putting $100,000 now?

00:15:40:08 – 00:15:41:16
Kyle Pearce
Yeah, exactly. I know you’re like.

00:15:41:19 – 00:15:42:15
Jon Orr
63, right?

00:15:42:17 – 00:15:44:18
Kyle Pearce
Actually, word. So walk us through that.

00:15:44:18 – 00:15:53:14
Jon Orr
In the timeline. And then what we can do is after that, let’s talk about when I should get this. Should I get this now or should I be taking care of some other things first?

00:15:53:16 – 00:16:10:20
Kyle Pearce
These are all great questions and really important wonder. So first and foremost, when you go to get critical illness, you can get critical illness essentially from any insurance company, right? So you can go and talk to your insurance guy that you’ve always talked to. Talk to whoever you can talk to us. Right. We handle this type of work as well.

00:16:10:22 – 00:16:32:03
Kyle Pearce
We’re going to talk from a personal perspective, first for our business owners. Stick with me because you need to understand how it works in general first. And then I want to share how this opportunity gets even better for incorporated business owners. So it becomes, again, like almost a no brainer on the business owner side. So we’ll put a pin in that part for now.

00:16:32:05 – 00:16:50:05
Kyle Pearce
And we’re going to talk about David, who is 32. And actually David’s was a listener of Canadian While Secrets back when it was in best The teacher. We hopped on a call this is a couple of months ago and going through his wealth plan there were some will call it some chinks in the armor, you know, like there was some missing pieces there.

00:16:50:07 – 00:17:07:23
Kyle Pearce
So we were talking about wealth building, but I was concerned about the protection side. So this is something we discuss when we get on a wealth call. We sort of go, Listen, I love that you’ve got plans to He was going to add additional units to investment properties. He’s got a significant amount of money ready to go to do all this stuff.

00:17:07:23 – 00:17:35:06
Kyle Pearce
He’s doing great. But it’s just like we did. John leapfrogged to that place and didn’t really take care of home base first, especially since home base is such an easy thing to take care of, especially like even small term riders or sorry term insurance policies and such. This was one of those ideas I had for him because he does manual labor for his day job and he is the one that’s doing all the work on these renovations and so forth.

00:17:35:06 – 00:17:54:03
Kyle Pearce
So without him, a lot of his big plans are gone, right? So right there, there’s a need. But then there’s also the benefit of the fact that if nothing happens, this money isn’t gone right. So the way this works, you have two options for critical illness. That cheap option, I call it like the term insurance option for life insurance.

00:17:54:03 – 00:18:17:03
Kyle Pearce
The cheap option is you buy a term critical illness policy. You can buy it from anywhere, You buy it from sun life, you can buy it from RBC, you can buy them from any of these companies that are out there. But a term just like with life insurance, you’re renting this insurance and for a lower cost, you are able to monthly or annually, however you choose, pay into this.

00:18:17:03 – 00:18:38:21
Kyle Pearce
So it’s not like, hey, take 100,000 and put it in. You’re just paying over time. And with a term policy, you can cancel it. You can cancel it after month three, you can cancel it after three years, you can cancel it after 30 years. A lot of companies will allow you to run this until you’re 75. Okay. So term 75 is sort of that typical sort of length of time.

00:18:38:23 – 00:19:01:15
Kyle Pearce
And again over your lifetime, there’s more than a 50% chance that you will contract one of the big three. Right. Which is kind of crazy like. So you do expected value and go like so you know that it’s like a high chance that you might contract it. It doesn’t mean that you’re going to actually die, right. But you will actually contract one of these things, which means a critical illness policy would pay out.

00:19:01:17 – 00:19:18:12
Kyle Pearce
Right? So this is where we bring the probability. You got to go from emotional and then you have to have rational you got to be flipping back and forth. It’s like, I don’t want that to happen emotionally. But rationally you’re going, I mean, holy smokes, I don’t like the chances to be honest. So when we look at this, we can pay less money.

00:19:18:12 – 00:19:51:09
Kyle Pearce
In this case, David was 32, nonsmoker who’s male, and he was looking at a $250,000 policy. Okay, We used 500 in the examples, but $250,000 policy, meaning if he puts this in force and something were to happen contracts, a type of cancer, I said in this particular one, if he goes blind, randomly, you know, or whatever, any of those types of qualifiers that may happen has stroke any of those things, he will get a windfall of $250,000, Right.

00:19:51:11 – 00:20:12:21
Kyle Pearce
Even if he’s working. So it doesn’t have to be like, hey, you contracted it and you can’t work. It’s like, no, no, you contracted it. You met the condition. So on a death benefit, if you die, you met the death benefit condition. You’re if you meet one of these conditions, you’re going to receive this benefit. So that was $200 a month for him to do that.

00:20:12:21 – 00:20:33:21
Kyle Pearce
Now, a lot of people are going to hundred dollars is a significant amount, Right? So right away on a call, you were saying like, who is going to consider who’s this right for? And I’m going to argue that if you hop on a call with me and you’re like, I have nothing. I have no investments, no savings, no nothing, it’s like we’re not talking critical illness yet.

00:20:33:21 – 00:21:03:02
Kyle Pearce
That is not where you should be putting your $200 that you need to scrape up from under the couch or whatever you’re going to do. You should be investing, you should be saving. Right. So probably starting with a savings fund that’s going to eventually turn into an investment fund, right? We have an emergency fund episode that people can check out stock the way your RSP if you don’t have a pension putting a tax re those types of things and taking care of term insurance at that point.

00:21:03:03 – 00:21:24:05
Kyle Pearce
At that stage term life insurance, I want to be clear. Okay. So you want to make sure that your income can be replaced for at least the amount of time that you plan to be working so that any of your dependents are taking care of. All right. For someone who actually has these things in place, they’ve got some life insurance, they’ve got investments, they have a plan, right?

00:21:24:05 – 00:21:49:11
Kyle Pearce
They’re doing this sort of thing. They’re on a wealth building journey already along that wealth building journey, we start to incorporate tools like this. All right. So even though this is a great tool for everyone, it’s not the best place to put that $200 a month if you haven’t taken care of the other pieces. And John, you and I have been crafting our sort of journey, right?

00:21:49:11 – 00:22:06:19
Kyle Pearce
The blueprint that we have on our website where we’re updating this blueprint so that it’s going to be a little bit easier to follow the path to figure out where are you. And if you think you’re here in the journey and there’s gaps before it in the journey, that we should probably have a chat and try to figure that out.

00:22:06:21 – 00:22:37:02
Kyle Pearce
All right. So for David, this was a good fit. He’s got investments, he’s got a good job, he’s got some life insurance, he’s got all of these other things in mind. And we were looking at this particular policy, so $200 a month. But the negative is if he cancels in three months, if he cancels in three years, if he cancels in 30 years, he receives none of it back just like term life insurance, he will receive none of the term critical illness insurance.

00:22:37:04 – 00:22:47:18
Kyle Pearce
All right. So ask away here. John, is there anything that’s circling in your mind here that you think somebody in the audience is asking themselves right now after hearing all of that?

00:22:47:24 – 00:22:50:18
Jon Orr
You just said, I get my money back. But we said, you do get your money back.

00:22:50:18 – 00:22:55:13
Kyle Pearce
So I love the way you phrased it. You phrase it like it’s like, well, wait a second.

00:22:55:15 – 00:22:59:05
Jon Orr
When does that happen? You told me we get our money back.

00:22:59:11 – 00:23:20:17
Kyle Pearce
I love it. I love it. So if you do it that way, right. And you’ll notice some similarities between term life insurance and permanent life insurance right here, this would be term critical illness. And we don’t call it permanent critical illness because it will max out at about 75 for most companies, most policies. But you do have an option.

00:23:20:19 – 00:23:47:02
Kyle Pearce
You have an option that you can put what we call a return of premium on cancellation or expiry. So this is an added we’ll call it a cost, but it’s actually turning this more into a forced savings if you actually do the math here. So we’ve got David, he can pay 200. If David said, Kyle, I want to do the 200, I’d be like, You know what, David?

00:23:47:02 – 00:24:09:20
Kyle Pearce
We’re not done the discussion yet because I didn’t tell you how much the return of premium is. The return of premium allows you to get every dollar that you’ve put into this policy back after a period of time. So in this particular case, it was 93 extra dollars a month for David to be able to get his return of premium.

00:24:09:20 – 00:24:35:07
Kyle Pearce
So it’s about $300 total. So we went from 200 to $300 and now people are going like, whoa, this feels really expensive. However, in case one, if I put $200 in a month every single month for one year, ten years, 30 years, I get none of it. Back when I quit, $300 a month into this one year, ten years, 20 years.

00:24:35:09 – 00:25:00:13
Kyle Pearce
The key is if I do it for at least 15 years, I will get 100% of my premium back with this particular insurer. So every insurer has different nuances and different rules. But with this particular example, if he canceled after five years, he’d get 25% of his premium back. If he canceled after ten years, he’d get 62% of it back.

00:25:00:13 – 00:25:30:23
Kyle Pearce
If he cancels after year 15, you’re 16, you’re 20, you’re 35. He gets 100% of the money that he put back, unless there’s only one other option, unless he contract it, one of those critical illnesses. So this is where we talk about the quote unquote, free lottery ticket, because you are, if we think of it in a rational perspective, you are essentially socking some money under the couch.

00:25:31:02 – 00:25:54:13
Kyle Pearce
Right. So I look at it as like a bit of a forced savings account where you’re earning no interest. So there’s that cost, right? That’s the cost. Probability brings your expected value to a level that’s fairly significant. Right. So if you’re going to own this thing, save until you’re 75 or at least the next 15 years, probability would suggest that actually your expected return is higher.

00:25:54:15 – 00:26:16:19
Kyle Pearce
So you get either zero return or you’re going to get a really big return, right? So if he goes 15 years and something happens in the 15th year and he contracts something he’s put in there, but call it 50 something thousand dollars, that $50,000 has now turned into 250. If it happens in the first year, he put in 30 $600.

00:26:16:19 – 00:26:46:16
Kyle Pearce
It turned into 250. If it’s in year 35, your returns are going to be less. If something happens, but it’s still going to be greater than zero. So if we actually run the probability, you can literally go and say, well, if I take all of the probabilities of any of these things happening to me over my lifetime, I can look at any year and I can calculate the expected value by taking the probability of it happening multiplied by the payout to determine whether there’s a return or not.

00:26:46:18 – 00:27:17:03
Kyle Pearce
And the reality is there always is because the probability is above zero. So your return, your expected value is above a 0% rate of return. So rationally, without emotion, if David has that money and he’s even thinking about, let’s say he has a savings fund taken care of, he’s got a few 3 to 6 months of expenses socked away instead of continuing to put that more money into that savings fund, he might choose to start now putting it over here.

00:27:17:03 – 00:27:27:09
Kyle Pearce
So it’s more forced savings, but also with a quote unquote, expected return on it, just given the probability of any of these events happening.

00:27:27:15 – 00:27:43:11
Jon Orr
Yeah. And safeguarding your mindset. Right. Just saying like want to have that anyway. And so instead of just tossing in a way to say, I have insurance in case I get sick, you want to do it in this particular way. Because I think what you’re saying know, this is where the secret sauce is. If you get the optional benefit of your return on premium.

00:27:43:12 – 00:28:05:20
Jon Orr
Yes. You’re saying I’m going to do this for 15 years? You were going to do it anyway because you wanted that safeguard. Why not spend the extra, you know, $93 in this particular case and say, I’m going to get my money back? And the only thing that actually costs you is the opportunity cost of your $50,000. In this particular case to say, look, I didn’t put $50,000 into the stock market or I didn’t put $50,000 into a rental property.

00:28:05:22 – 00:28:33:09
Jon Orr
But what I’m getting for my opportunity cost is I’m getting peace of mind. I’m getting like you said, the probability is sound scary when you say I may contract this critical illness in my lifetime, but I’m covered If I do this and I get my money back. So that to me is a secret source that you want to think about when you decide, Am I covered for that type of event in my life and make sure that, like you said, it’s important to kind of know where you are in your trajectory of your wealth.

00:28:33:09 – 00:28:40:05
Jon Orr
Building journey is like, this might not be the right thing for you yet, but it will be someday if you’re kind of moving in the right way that we’re talking about here on the podcast.

00:28:40:07 – 00:28:56:20
Kyle Pearce
Yeah, if you’re going down that path, right, if you’re going on a wealth building path and you’re successful moving along that path, there will be a time where this makes sense for you, or there should be a time where it makes sense for you If you’re going to hit that notch in the road right where you should be considering it.

00:28:56:22 – 00:29:15:02
Jon Orr
Here’s a question, because we’ve been talking we’ve had many episodes in the past on whole life insurance, permanent life insurance. And let’s say you took us up on that, you know, met with Kyle in him, went down looking at your your scenario to see what is the right option for you. And you got a whole life policy and you’re using it.

00:29:15:03 – 00:29:29:16
Jon Orr
You want to use it the way that we’ve been talking about here. You want to use it as a tool to do other things with tool to buy real estate or tool to invest in your future, or a tool for emergency fund, because that was one of the tools for the emergency funds or a tool to buy the car we talked about that to.

00:29:29:19 – 00:29:50:01
Jon Orr
But I wonder, Kyle, is it could it be used as a tool in this case? I know that this particular insurance gives you this kind of like windfall and you’re alive. But I mean, like, could you use whole life insurance to cover your butt in this case, too, to say, look, I didn’t die, but if I get sick, could I just withdraw $250,000 from my whole life?

00:29:50:01 – 00:30:09:14
Jon Orr
The policy in 15 years from now. And it covers me in that case so that I have that windfall of money. The difference is when I don’t do die, that benefit that I withdraw will get paid off. But I will because I’m going to borrow that money against my policy. There’s going to be an interest charge. So what’s your thought on using that as a tool of versus critical illness?

00:30:09:14 – 00:30:17:10
Jon Orr
Like, why would I if I already have a whole life policy and it’s large enough to cover this kind of thing? Should I go critical illness or should I just leave the policy?

00:30:17:12 – 00:30:41:21
Kyle Pearce
I love this thinking here, this is such a great question. I do want to come back to opportunity cost as well, because there’s one last thing to consider on that. But while this question’s fresh here with us, I think every scenario is different. I think for a lot of people, depending on what their goals are, it’s going to be really important that with their goals that they’re thinking through what their goal is for, say, that whole life policy.

00:30:41:21 – 00:31:03:20
Kyle Pearce
So if your goal was to have part of that policy, cover the events of a critical illness or whatever it might be. Absolutely. I mean, you can definitely do that. There is nothing holding you back from doing that. And again, that’s where someone who does purchase and decides to put money into a participating whole life policy as a tool.

00:31:03:20 – 00:31:26:05
Kyle Pearce
Typically we want to use that as a tool for reinvestment. That’s usually what we’re kind of the stance we’re taking or for legacy as well. So when people have they’re busting at the seams in their RSP, their tax free savings, or they have a corporation with a lot of retained earnings like these are cases where permanent life insurance really makes a lot of sense and you get to decide what that cash value is used for.

00:31:26:05 – 00:31:47:19
Kyle Pearce
So in a case where something happens, it’s unexpected that you contracted something, you know, some sort of critical illness. Absolutely, 100%. I would be all for it if you didn’t have your critical illness set up. So I would be saying that in the journey, the real discussion would be which one comes first? And for me personally, in most cases, not everyone.

00:31:47:21 – 00:32:12:10
Kyle Pearce
Most cases a permanent policy comes first. A permanent life insurance policy comes before the critical illness because I have access to the capital in the permanent life insurance policy. I don’t have access to the money I’m putting into the critical illness unless something happens or why not. Until I’m ready to cancel this policy and bring the money back.

00:32:12:12 – 00:32:33:22
Kyle Pearce
So I would argue that that extra $300 for David is probably not the best fit if he hasn’t, say, considered permanent life insurance, especially because he was a real estate investor. Right. So you’re a real estate investor. I’m like, that’s the thing I want to put in place first. Get that budgeted into your world. Then you can consider critical illness.

00:32:33:24 – 00:32:53:03
Kyle Pearce
Something else to consider. Even though I wouldn’t want to plan for this. But let’s say money is tight and you have critical illness and you’re like, Shoot, I got laid off or business is slow. If I’m an incorporated business owner for a little while, I have access in my permanent policy to borrow for a short period of time.

00:32:53:03 – 00:33:13:03
Kyle Pearce
We don’t want to do this forever, right? But for a short period of time I could access the capital in that policy to keep my critical illness like going, right. I don’t want to give up that policy in year three or year five and only get a part of the premium back. I want to try to at least get it to that year 15, and I’m going to do whatever I can to make that happen.

00:33:13:05 – 00:33:32:14
Kyle Pearce
And again, strategizing around that in an emergency situation is really helpful. That’s where an emergency fund comes in. Hey, if you did a permanent policy as your emergency fund, that would be a perfect place for that particular policy to be used to kind of help you out in maybe in a tight spot or over a tight period of time.

00:33:32:16 – 00:34:04:06
Kyle Pearce
Now, I want to go back as well to the opportunity cost. So the opportunity cost you mentioned is even more complex than what you stated there, John, 100%. Everything you said is true. You mentioned the only thing you’re losing is the opportunity cost. If I took the $300 and put it in the stock market, which is why we wouldn’t do this instead of tax free savings account or instead of putting in an RSP, or instead of putting it into a policy and leveraging for your real estate deal or whatever you’re going to do, we would do all those things first.

00:34:04:08 – 00:34:30:10
Kyle Pearce
But in this case, when I decide that it’s time, that the time is right for me to start funding a critical illness with return of premium, that is going to start and you’re not losing all of that opportunity cost that you would get in the S&P or TSX or whatever you want to invest in the other thing that you need to consider is what is the opportunity cost or what is the chance.

00:34:30:10 – 00:34:52:11
Kyle Pearce
If I look at probability and say, what is the opportunity cost, I will lose. If a critical illness were to happen next year, five years from now, ten years from now. Now I have someone really close to me and I don’t even know if I told you about this, but this week, this person that I know, I’m not going to say where they’re from or how they’re related, because it’s not public to everyone yet.

00:34:52:11 – 00:35:13:11
Kyle Pearce
But this person that I’ve spent a lot of time with over this past year pulled me and a handful of other people that we’ve been together doing some work, we’ll put it that way, and told us that he has stage two cancer now it is curable. It is curable, but it was the same type of cancer that Mario Lemieux had and recovered from and came back to the NHL.

00:35:13:11 – 00:35:46:08
Kyle Pearce
So there’s lots good things going on. But a week ago we were all having fun and then this week that news was presented to him. Now that’s just one random case here. So what’s the opportunity cost for him? If the goal was I’m not going to do, say, critical illness because of the opportunity costs for me to take the 300 and put it into the stock market, is he going to be able to continue putting money into the stock market right now while he’s off work doing chemo?

00:35:46:10 – 00:36:19:19
Kyle Pearce
And I’m going to argue there’s a massive opportunity costs there that’s really hard to calculate. So when we think about it from the rational perspective, we also have to just keep an open mind to, hey, if there is a chance and if we know the chance, right, if we go through and calculate the chances these things happening over the next 15, 25, all the way till I’m 75, the opportunity cost of not having a policy like this in place may actually be greater than the opportunity costs you lost in, say, the stock market.

00:36:19:19 – 00:36:42:20
Kyle Pearce
So I just wanted to kind of highlight that, that it’s actually a more nuanced discussion. And again, some people are just okay to self-insure and that’s fine. But consider that again, the return of premium coming back, It really for us anyway, it puts us in a spot where we can feel a little bit more comfortable with the journey that we’re on, that if anything were to happen, that we’re in a better boat.

00:36:42:22 – 00:36:58:15
Jon Orr
Yeah, and I think just knowing that’s an option, I think that’s one of those secrets us moments to is to go. I didn’t even know that that was an option. You know, I didn’t know that, that they could get my money back in this when I get critical illness insurance. So that’s a big takeaway for me on the personal side.

00:36:58:17 – 00:37:17:10
Jon Orr
But I know that, Kyle, you mentioned at the top of the episode that, you know, when we think about this case that you took us through, this was on the personal side. This was this is a person who was not incorporated or he’s in corporate, but they wanted it this insurance for them personally. But let’s say I have my own business and I have a corporation.

00:37:17:10 – 00:37:38:11
Jon Orr
And I know that this is true because we’ve talked about it. But I mean, tell us about the benefits that come along with this. If I’m a business owner and I want to also maybe expense the cost to the business because I’m a shareholder of the business or I work in the business and therefore the business would suffer if I got sick.

00:37:38:11 – 00:37:41:16
Jon Orr
Right. So what are some of the extra benefits on upside?

00:37:41:22 – 00:38:06:06
Kyle Pearce
Yeah, totally. So I’m going to use you as an example there, John, because you’re active in many of our businesses, right? But in any of those businesses and any of those corp’s you are a key person, right? You are an important part of that business. And let’s be honest, if you got sick today and you were maybe unable to work or even if you just got sick and you were able to work, but you’re like, Listen, Kyle, I’m not spending all my time working all day.

00:38:06:07 – 00:38:27:24
Kyle Pearce
You’re on your own. I’m going to spend time with my family and blah, blah, blah. That’s where the logic comes in for, hey, a corporation would take out critical illness insurance on you. They’d do the same for me, right? Because I’m a key person as well in our businesses. So the corporation comes in and we’re going to use the same numbers as the David example.

00:38:27:24 – 00:38:47:19
Kyle Pearce
David’s a little younger than you, John. Sadly, but it’s okay. But we’re going to say that the actual critical illness insurance cost you remember what it was, John. It’s like quiz time for everybody. It was 200 bucks for David, So yours might be a little bit more because you’re a little older. And there was a return, a premium, which was about 100 bucks.

00:38:47:19 – 00:39:02:16
Kyle Pearce
It was like 93 or something like that. Okay. So what’s going to happen is you’re actually going to have shared ownership of this critical illness policy. So you’re going to write up a contract and basically how this contract works, some call it a split dollar.

00:39:02:16 – 00:39:04:11
Jon Orr
Is this by default, you’ve got to do this yourself.

00:39:04:11 – 00:39:18:12
Kyle Pearce
No, you will do it. But this is common. So you can Google it, You can all these things. We’re going to have a page on our website about this coming soon. But basically the idea is that you’re going to share ownership with the company and how this is going to work. It’s kind of like a JV agreement, right?

00:39:18:12 – 00:39:37:20
Kyle Pearce
When you go back all the way back through some of our earlier episodes, we talk about joint ventures where we have a joint venture agreement. You bring the money, we do the deal. Same idea here, but with critical illness where the company says, Hey, listen, I’m going to take responsibility for the payment of the critical illness, All right?

00:39:37:20 – 00:39:59:14
Kyle Pearce
I’m going to take that payment on cash. I’m going to take the 200 bucks the company does. Perfect. Awesome. The company does. Oh, that’s you. Wait a second. That’s like reduced tax money that we’re buying that with bonus. Awesome. We can even expense that. Holy smokes. That’s pretty awesome. Like, I can expense that because that’s an expense. There’s really no other tax benefit to why you wouldn’t want to.

00:39:59:16 – 00:40:18:12
Kyle Pearce
Okay, awesome. And then, John, you’re like in the contract. You’re like, but you know what? Hey, Mr. Corporation, that I own, Mr. Corporation, there’s a return, a premium on there. Do you mind if I pay the return a premium on there And the corpse like, Yeah, like we’re not going to pay it, but we’re just paying this part because we want to make sure that we are good.

00:40:18:12 – 00:40:39:15
Kyle Pearce
If you go and you get sick. Perfect. Okay, so you take on the return a premium part. All right, So, John, you’re going to pay 93 bucks. The are going to pay the 200, and we’re out to about 300 total. And here’s what happens now. There is no actual tax language to tell you how to handle this type of situation.

00:40:39:15 – 00:40:57:06
Kyle Pearce
So it doesn’t say in the Income Tax Act, you can do this. It doesn’t say you can’t do this. And so even companies like Sun Life will have these examples on their website. They’re like, here’s what you could do. And at the bottom, a little asterisks that says there’s really no tax guidance on it and no one’s ever had an issue.

00:40:57:06 – 00:41:14:00
Kyle Pearce
There’s never been an issue in the past. Could a change in ten years? Maybe. But we don’t know. We don’t know what the future holds. All we could do is use the rules we have now. And that’s what I’m going to go by. And so, John, you’re going, okay, so what happens? Let’s say shoot John, Something were to happen.

00:41:14:02 – 00:41:37:14
Kyle Pearce
Probability works against you personally. The windfall of the critical illness insurance money, the 250 that you had been insured for goes to the company. Now you’re thinking like, okay, like, oh, wait, but you own the company. Okay, So that’s positive. All right. It goes to the company. Now that money still has to come out. It’s not like life insurance where I can just take this money out tax free.

00:41:37:19 – 00:41:54:24
Kyle Pearce
But your company gets a windfall of money, which is what it was supposed to do right now. It has to 50 that it can go and try to headhunted. It can spend that money to invest in trying to figure out like, what’s our action plan if John doesn’t decide to come back now, what happens if nothing happens? So you’re lucky as a human.

00:41:54:24 – 00:42:15:22
Kyle Pearce
You’re just like, Wow, that’s awesome. I didn’t have any of these things happen while we kept this policy in effect, and we’ve kept it for at least 15 years, right? Because we want to maximize the return of premium in earlier years, you’re going to get less than 100% after year 15. You get 100% with this particular policy. So, John, you’ve been paying 93, 93, 93, 93.

00:42:15:22 – 00:42:41:20
Kyle Pearce
You’re like, man, I’ve been paying $93 a lot. But because of that shared agreement, you took on the responsibility to get the return of premium. So you bought the money back from the insurance company. The corporation decided not to take the money back by not taking the return a premium. They have a term insurance policy. They get What happens if it happens and when it goes away, they get nothing.

00:42:41:22 – 00:43:14:14
Kyle Pearce
But because you were the one in the shared agreement that opted to pay for the return a premium, guess where the return a premium goes. All back to you. All of it. All of it. So in David’s case, it was about 54,000 and combined the 300 times 12 times 15, a few canceled in year 15. So if you cancel in year 15 or after year 15, you’d get say 54,000 coming back to you when you only contributed about a third of that amount.

00:43:14:18 – 00:43:34:20
Jon Orr
I was putting in $93. If I’m David in a corp and every month and I did that for at least 15 years. And then if we want, I can get all of that money back, but I get my $93 back. But by also get the $200 back that the court put in. So I get $300 back per month.

00:43:34:20 – 00:43:37:20
Jon Orr
Exactly. In a lump sum, but I only had to put in 93.

00:43:37:24 – 00:44:02:11
Kyle Pearce
So that is like a massive secret source for business owners to the point where most insurance companies, I think the highest an insurance company will allow you to do for critical illness is 3 million. Because imagine if you have a very successful business and you have a lot of retained earnings and you know, that way I can use corporate dollars to buy the insurance.

00:44:02:13 – 00:44:16:20
Kyle Pearce
I can pay the return a premium. Personally. And if something happens, a $3 million windfall comes to the company. If nothing happens, I get all of it back. Having personally only having paid a third. Now, here’s the nuance.

00:44:17:00 – 00:44:18:05
Jon Orr
It’s like you’re a money launderer.

00:44:18:05 – 00:44:37:21
Kyle Pearce
It’s definitely what it sounds like. So here’s what I want everyone listening to do, though. When you have a chat with someone, I would say, have a chat with us. I’m sure you can tell now that we understand this very well. We are not tax experts. We are not CPAs. I would like to say that we know the Income Tax Act, but we can’t give you advice on it.

00:44:37:23 – 00:45:00:07
Kyle Pearce
So I want you to understand this nuance Here is where the taxable uncertainty comes in. When you read the tax ed doesn’t tell you what to do in this case. So you need to talk with your accountant about how they feel comfortable doing it. And if you feel a different way, then you can share that. But your accountant and you need to come to some sort of terms.

00:45:00:07 – 00:45:22:15
Kyle Pearce
So think about this, John. You paid a third of the return, a premium. Your company paid two thirds, right? So 100, 200, right. So it makes $300. You paid a third. So one such method that we tend to stick with is the fact that we’re getting the return a premium back and it’s not taxable and you’re good to go personally.

00:45:22:20 – 00:45:44:17
Kyle Pearce
Okay. The other method that you can use, if you’re like, You know what, I just don’t want to have any. If they change or they actually write something more specific in the act later, I don’t want to have to deal with it. Whatever. Okay. You’ll get your one third back tax free, right? Because you already paid tax on it when you put it into the return a premium and now you got these two coming back to you personally.

00:45:44:19 – 00:45:48:09
Kyle Pearce
All right. These two coming back to you personally as income.

00:45:48:11 – 00:45:49:24
Jon Orr
Yeah. If they change it.

00:45:50:04 – 00:46:10:12
Kyle Pearce
If they change it. Right. So but I want you to just think about that for a second that it’s like, okay, so even in that scenario, there’s a net benefit to you as a business owner, even if you are lucky and everything works out great and you’re super healthy and you don’t actually have to put this into force, To me, that’s a massive secret source.

00:46:10:12 – 00:46:32:03
Kyle Pearce
I think there’s a secret sauce there. As you mentioned, just for the personal side, when people get to a place where this makes sense for a lot of businesses, it makes sense from a protection standpoint, but then it also makes sense from an expense standpoint and a return a premium standpoint on the other side of things. So you’ve got a lot of secret sauce to work with here in today’s episode.

00:46:32:05 – 00:46:50:11
Jon Orr
Yeah, I’m like in the secret sauce on this one. And I got two big takeaways. Kyle is one. In this particular case, this is generally not just for this episode is that when you want to do things that you need to do anyway, take care of insurance, buy this, or do something that you need to feel secure or to live your life.

00:46:50:13 – 00:47:07:20
Jon Orr
You want to ask yourself the question, Can I do this this way? The way that typically everyone might do this? Or can I find the secret sauce? Can I figure out, is there another way to do that? And not take money out of my pockets in the same ways that everyone else gets money taken out of the pot?

00:47:07:20 – 00:47:33:12
Jon Orr
Can I keep some of that money in there or can I actually add to my pocket and do the other thing at the same time? That’s I guess, really the benefit, the secret sauce we’re talking about here. But generally, is it the the other benefit is that that’s what we want to do, like we actively seek out Kyle The fact finder of us is he seeks these things out when something that comes up that we need to do, we go and figure it so that you don’t have to.

00:47:33:12 – 00:47:42:18
Jon Orr
And that’s we’re going to share here on this podcast. So we talked about this secret sauce. We’ve talked about many other ones. This is what we’re doing with our podcast. So that’s my two big takeaways.

00:47:42:18 – 00:48:09:03
Kyle Pearce
Kyle I love it. I love it. Yeah. So this one for me, again, the title not trying to be insensitive, but really when it comes from a rational perspective, it’s worth having a look at even if you’re not ready for it in your journey yet. And something that I’m really noticing, John, when I’m on calls with people I was on a call with someone yesterday and this person came in just through social media, not directly through the podcast, but I was on a call.

00:48:09:03 – 00:48:27:04
Kyle Pearce
And what he said to me was it made me feel good about the work that we’re trying to do, he said. I really appreciate that you weren’t just trying to get me to buy a tool. You’re actually asking me all the questions about my entire scenario and what he came to me for, we actually decided is probably not the thing we want to focus our attention on right now.

00:48:27:09 – 00:48:47:01
Kyle Pearce
There’s other loose ends that he needs to take care of. So this particular individual had a ton of passive income happening in his corporation, and I was like, Oh, there’s some things that we can do here. We’re going to have another strategy call to kind of get into the weeds in the nuances there before he wants to get to the place he thought he was at in the journey.

00:48:47:01 – 00:49:07:11
Kyle Pearce
So he had spoken to someone at a big institution and they didn’t ask about any of these other things. So that’s our goal here. We really want people to have a clear picture in some of our earlier episodes when we talk about your goals in your financial future and you’re talking about your actual journey, you need to look at the big picture, right?

00:49:07:11 – 00:49:25:19
Kyle Pearce
It’s not about a single tool coming in because a single tool coming in at the wrong time of your journey can actually set you back. The same is true if you miss a tool along the journey and you sort of do the leapfrog. We got lucky. We’ve said it before on this episode, John. You and I got lucky in this journey.

00:49:25:19 – 00:49:46:16
Kyle Pearce
So did Matt, because we didn’t know at the time what we should have been doing along the journey to ensure that we were as strong as possible for any circumstance, right, for any potential issue that could have come up. So friends, hopefully you found some value from this episode. If you did do us a solid rating and review the show.

00:49:46:16 – 00:50:08:11
Kyle Pearce
And of course, of course we would love to chat with you about your specific situation and give you our goal is to give you at least one next step. Sometimes it makes sense to do some of the things that we specialize in doing together with you. Other times we might point you to another trusted individual that can help you with that specific part of your journey.

00:50:08:11 – 00:50:32:07
Kyle Pearce
But the most important part is knowledge. You need to have the knowledge to know what is the next step, what is the next place in my journey so that I can get closer to that end goal that you’re after. So head on over to Canadian wealth secrets dot com forward slash discovery. Well, hop on a call together get to know you a little bit and ask you a lot of questions so that we can get you thinking.

00:50:32:12 – 00:50:49:11
Kyle Pearce
And typically by the end of that call you have one or more idea to be thinking about that you haven’t yet considered. And that is our goal and our promise to you. Canadian while secrets dot com forward slash discovery and I look forward to seeing you on a call just.

Canadian Wealth Secrets is an informative podcast that digs into the intricacies of building a robust portfolio, maximizing dividend returns, the nuances of real estate investment, and the complexities of business finance, while offering expert advice on wealth management, navigating capital gains tax, and understanding the role of financial institutions in personal finance.

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