➜The ONE Thing

Welcome to The ONE Thing! We know you're busy, and long, complicated newsletters aren’t practical. That’s why we bring you The ONE Thing. It’s One, clear, actionable insight every two weeks—straight to the point. No fluff, no filler — a smart strategy you can apply immediately to protect your future and make your impact that much greater.

This first group of newsletters will cover "The Basics"—helping you understand how life insurance works and why it’s essential.

The ONE Idea: Permanent Life Insurance Is More Than Just Protection

Unlike term insurance, which covers you for a set period, permanent life insurance lasts a lifetime and builds cash value (further explained bellow)—a financial asset you can use while you’re still alive. It provides both security and flexibility, making it a powerful tool for wealth building, financial planning, and legacy protection.

How It Works

Premiums are typically paid monthly or annually, and you have flexibility in how you pay them. You can use personal funds, lower-taxed corporate dollars (if you own a business), or even accumulated cash value from the policy itself over time.

Here are two key components of a permanent life insurance policy that make it such a powerful tool:

1. Death Benefit – A tax-free payout to your beneficiaries when you pass away.

2. Cash Value – Think of this as a savings account within your policy. A portion of your premium goes into this account, where it *grows over time with interest or investment returns. You can use it while you're alive for various financial needs. 

*Growth: Insurance companies earn money through premiums paid by policyholders and by investing those funds in things like bonds, stocks, and real estate. When they earn extra money, they share some of it with policyholders in certain types of policies. This is because, in mutual insurance companies, policyholders are like owners, so they benefit from the company’s success.

Ways to Use "Cash Value":

• Borrow Against It – Take out a low-interest loan from the bank using your policy as collateral, without the need for a credit check or approval process. (You can repay the loan on your own schedule—or not at all, and have it paid back with the money you'll get through your insurance policy upon death!)

• Withdraw Funds – Access part of the cash value for major expenses.

• Supplement Retirement Income – Think of it as a personal pension. Over time, your cash value grows, and when you retire, you can take out tax-free loans (a loan is not considered a taxable income) or withdrawals to help cover expenses—without affecting your other investments.

• Pay Premiums – Use accumulated cash value to cover future premiums.

• Serve As a Tax Shelter - Functions like an unlimited TFSA, sheltering excess cash flow and passive income from taxes while providing significant benefits for corporations.

Case Study 1: Business Owner Using Cash Value for Growth

Sam, 45, owns a successful tech company. He purchases a permanent life policy for 2-million-dollar coverage, paying $1,250 per month in premiums (with a 4.8% annual interest on his policy) which helps build a growing cash value.

🔹 10 years later, his policy has $200,000 in cash value.
🔹 He uses $75,000 as a loan to expand his business.
🔹 His policy stays active, and the loan is repaid on his terms.

💡 Sam didn’t need to go through a bank—he used his own policy to fund his growth.

Case Study 2: A Tax-Free Retirement Strategy

Lisa, 38, is planning for retirement. She invests in a permanent life policy for 5-million-dollar coverage, paying $3,500 per month over 27 years in premiums (with a 5% annual interest on her policy) to aggressively grow her cash value.

🔹 At 65, her policy has *$3,000,000 in cash value.

🔹 She takes out tax-free loans of $1,000,000 from her policy for retirement income.
🔹 Her family is still protected with a death benefit, even while using the cash value.

*Quick Math: 3,500 x 12(months) x 27(years)= $1,134,000, now add a 5% compounding annual interest and it adds up to $3,000,000 at 65 years old!

💡 Lisa secures retirement income while keeping her financial safety net.

Why High-Net-Worth Clients Buy Permanent Life Insurance

For high-net-worth individuals, permanent life insurance is more than protection—it’s a tax-efficient tool for preserving wealth, ensuring business continuity, and simplifying estate planning.

1. Liquidity for Estate Taxes – Upon death, substantial taxes may be owed on real estate, investments, and business assets. Life insurance provides immediate liquidity, preventing the need to sell assets at an inopportune time.

2. Fair Asset Distribution – When a family business or property is involved, not all heirs may be actively engaged. Life insurance can ensure that non-business-involved heirs receive a fair share without forcing a sale or disrupting operations.

3. Tax Shelter Benefits – Permanent life insurance functions like an unlimited TFSA, allowing for tax-free growth of wealth while providing a tax-free payout to beneficiaries.

4. Enhanced Investment Returns – High-net-worth individuals use Immediate Financing Arrangements (IFA) to leverage their policies for investment while keeping access to their capital for other opportunities (To be discussed in a later newsletter)

With these advantages, permanent life insurance is not just an expense—it’s a smart, strategic asset in wealth preservation and financial planning.

Final Thoughts: Build Wealth WHILE Protecting Your Legacy

Permanent life insurance is more than just a safety net—it's a dynamic financial powerhouse that evolves with your needs, offering flexibility and unparalleled opportunities. Imagine having access to cash when you need it, a tax-efficient income stream for your retirement, and a lasting legacy for your loved ones! With this strategy, you are firmly in the driver’s seat of your financial journey.

Ready to see how permanent life insurance can transform your financial future?

👉 Let’s talk.

→ Next edition, we’ll break down…

Stay tuned for the next ONE Thing!