Thursday, October 27, 2016

Peter's Story

Everyday Peter Andreana, a partner and financial advisor here at Continuum II Inc., works closely with clients to help them develop individual financial plans. Taking his own advice, Peter has developed an extensive portfolio of insurance policies that he would like to share with you.

For Peter, life insurance meant the difference between a financially secure estate and leaving behind debt and a deficient income for his wife and family. It is also a way to provide income in his retirement years.

Peter's first [small] life insurance policy was taken out in 2000. In 2009, Peter applied for and was issued his first significant whole life insurance policy at London life with an annual premium of $13,000.

In 2013, Peter took out another whole life policy with Great West Life.This policy has a $15,000 annual premium and provides substantially better cash values in the later years. Through the different policies Peter has a combined personal death benefit of $1.4 million of whole life insurance coverage.

Peter’s wife Laura also has her life insured. It started early on with a small ten year term life policy with a death benefit of $500,000, then a second whole life policy was added with an annual premium of $960. This smaller whole life policy provides a death benefit and generous cash values in later years.

Note: You can hold more than one type of life insurance policy at one time. Laura is a great example, as she holds both term and whole life insurance.

When their children were born, Peter and his mother jointly took out whole life insurance policies on the lives of each child. The kids policies (designed as a gift) provide great investment opportunities, as annual contributions from both Peter and his mom will leave the kids with generous savings via the policies cash values that could be accessed later in life. This money grows tax sheltered and creditor protected.

Both Peter and Laura also have critical illness insurance. This type of insurance provides a lump-sum of cash in the event of a critical illnesses. Peter's combined policies hold $120,000 benefit and Laura's a $65,000 benefit. Should either of them face a critical illness (eg: cancer, stroke, heart attack) the insurance will provide them with a cash payout that can be use to cover medical expenses, pay bills or anything they decide to do with it.

For another layer of protection, Peter also has disability insurance. If Peter becomes unable to work due to a disability the insurance provider will pay out a monthly benefit to supplement his income until age 65 or the disability ends. (Laura does not have T4 income, therefore she does not qualify for disability insurance.)

As a financial advisor, Peter understands how daunting all of this information can be. His choice to share his risk protection journey with you stems from his desire for current, and future, clients to know that he doesn't just give the advice, he lives it. Don't worry, you don't need do everything at once, these things take time. Start small and build on it overtime.