Written by Ron Cooke, President & Founder of Strategic Wealth Protection Partners in Ontario, CEA®, Member of the Estate Planning Council Canada
Case Study: How a Well-Structured Life Insurance Policy Added More than $4M in Projected Covered with Greater Flexibility
One of the biggest misconceptions about permanent life insurance is that two policies using the same deposits will produce similar results.
In reality, how the policy is designed can make a difference of millions of dollars.
Key Insights
- Permanent life insurance policies with equal deposits can differ by millions.
- An Ontario client’s $5 million proposal illustrated about $8 million in coverage.
- The same $5 million, redesigned, illustrated more than $12 million in coverage.
- Higher yearly cash values in the redesign could reduce bank collateral requirements.
- An independent evaluator strongly preferred the redesigned strategy over the original.
Not All Life Insurance Quotes Are Created Equal
A prospective client contacted me after receiving an insurance proposal from another advisor.
He was considering depositing $500,000 annually for 10 years, a total of $5 million, into permanent life insurance.
The original proposal illustrated approximately $8 million of life insurance coverage. It also included an Immediate Financing Arrangement (IFA) that would allow him to borrow against the policy each year and invest the money in real estate.
However, the financing arrangement required him to provide substantial additional collateral to the bank. Rather than simply comparing premiums, I spent time evaluating different insurance products, coverage structures, additional deposit options and cash values.
I developed a different recommendation using the same $500,000 annual deposits for the same 10 years.
However, my recommendation illustrated more than $12 million in life insurance coverage, with the potential for further growth, along with higher cash values each year. Those higher cash values could also reduce the amount of additional collateral he needed to provide to the bank.
Same client. Same $5 million in total deposits. Same 10 years.
But my strategy created more than $4 million in additional projected insurance coverage and greater financing flexibility.
The client understandably wanted to make sure he was making the right decision, so he hired an independent professional to evaluate both recommendations. After reviewing the two strategies, the independent evaluator strongly preferred my recommendation.
Why I Take the Extra Time
I don’t believe my job is simply to sell you life insurance.
My job is to determine what your money can accomplish when the insurance is structured properly.
Sometimes that means spending hours comparing different companies, adjusting coverage amounts, evaluating additional deposit options and examining how a policy performs over 10, 20 or 30 years.
The difference between an ordinary insurance quote and a properly designed insurance strategy can be millions of dollars for your family.
Getting a quick life insurance quote can take minutes. However, designing the right life insurance strategy for your family can take hours or even days—and the difference can be millions of dollars.
You may only purchase permanent life insurance once in your lifetime.
I believe you deserve an advisor who takes the time to get it right.
-Ron Cooke, SWPP, President and Founder
The amounts above are illustrated policy values, not guaranteed results. Comparisons should account for policy assumptions, financing costs and risks, and applicable guarantees
Discover the Benefits of a Tax-Savvy Life Insurance Strategy
Are you an Ontario resident who wants to protect, build, and transfer your wealth seamlessly to the next generation without excess taxation or family drama?
At Strategic Wealth Protection Partners, we’re here to guide you through every step of the estate planning and life insurance process with expert advice and personalized support.
Find out more about how you can use life insurance to secure your family’s legacy and build generational wealth. Schedule a Life Insurance & Estate Planning Clarity Call.
Avoid the Biggest Wealth Killer in Canada
Taxation is the biggest wealth killer in Canada.
If you’ve worked hard and built substantial assets, then it’s frustrating to know that 50% or more of your assets will go to the government when you die.
That’s where SWPP can help.
We create estate planning and life insurance strategies designed to secure your family’s legacy and preserve generational wealth.
But planning your legacy is about more than numbers. It’s about ensuring your family remembers you and your values are honoured for many years to come.
Estate planning, life insurance, and generational wealth planning can be confusing and complex.
With our comprehensive Living Estate Plan process, we make it easier for you. We’ll do a full assessment and walk you through all of your options including trusts and insurance.
From there, you can take action knowing what the real numbers are and how they’ll affect your family and your wealth.
Read More
If you’re considering life insurance for estate planning, you may find these articles helpful:
- Case Study: Why a Living Trust Wasn’t the Right Choice for a Family Home in Ontario
- Case Study: How an Estate Freeze Protected a Family Rental Property from Future Death Taxes in Ontario
- Case Study: How a Joint Partner Trust Helped Reduce Probate Fees in Ontario
About the Author
RON COOKE, PRESIDENT & FOUNDER OF STRATEGIC WEALTH PROTECTION PARTNERS
With over 30 years in financial services, I’ve seen the challenges families face when a loved one passes—lost assets, unnecessary taxes, and emotional stress. That’s why I created the Living Estate Plan, a comprehensive process to protect assets, eliminate estate and probate fees, and create legacies that are remembered for many years to come.
This plan ensures your family receives not just your wealth, but a meaningful reminder of your care and love. Tools like The Final Word Journal capture your story, wishes, and essential details, offering clarity and comfort during difficult times.
Your final gift should be more than money—it should be peace of mind, cherished memories, and an organized estate.
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