This week, Chris and I dive deep into a question we've been getting a lot since our town hall event with Sarah Swain, Rebecca Matthews, and Elisa Kitz (which had almost 2,000 registrants!): Why are permanent tax shelters considered an asset class?
I'll be honest—this was a concept that completely confused me until about 4-5 years ago. I grew up being taught that insurance is an expense, never an investment. But understanding how certain life insurance policies can provide liquidity, tax advantages, and long-term value has been game-changing for our family—both personally and professionally.
In this episode, we break down:
The difference between whole life and universal life insurance
Why insurance should be the foundation of your financial house (not just the pretty stuff on top)
How permanent policies build cash value you can borrow from tax-free
Why getting insured young matters more than you think
The connection between your health records and insurance premiums
This might feel like a big topic to grasp, but stick with us. We're here to help you understand what you weren't taught growing up.
[2:53 - 4:33] Why This Topic Matters Now
Questions coming in about permanent tax shelters as an asset class
How life insurance can offer protection AND build long-term value
Jenn's journey from seeing insurance as an expense to understanding it as an investment
[4:33 - 7:00] What Are Permanent Tax Shelters?
Two types: Whole life and universal life insurance
How they differ from term insurance (which is like "rent")
Why these policies are structured differently for every person
[7:00 - 10:20] Whole Life vs. Universal Life
Whole life: Invested through the insurance company, pays dividends, safer/more conservative
Universal life: Invested through markets, higher growth potential
Companies we work with have been paying dividends for over 100 years
[10:20 - 13:20] The Trust Factor
Why people are hesitant to invest (lack of education, past bad experiences)
Importance of transparency: where money goes, how returns work, paperwork to back it up
Finding advisors who customize to YOUR needs, not just sell hot products
[13:20 - 17:00] The Foundation Analogy
Chris's building background: insurance is like the foundation of a house
TFSAs, RRSPs, FHSAs are the "pretty stuff" on top
If the foundation isn't solid, everything collapses when markets slip
Different types of insurance: life, critical illness, disability
[17:00 - 20:20] Why We Have Different Policies
Individual needs vs. family goals
Whole life for lending money back to yourself
Universal life for stronger growth through market investments
[20:20 - 23:40] Term vs. Permanent Insurance Explained
Term insurance: Pay for protection for 10, 20, 30 years—when it expires, you're done (or renew at a much higher rate)
Example: $75/month at age 30 becomes $500/month at age 65
Permanent insurance: Pay for a set period (often ~20 years), then you're covered for life
[23:40 - 26:40] Health & Insurance Qualification
Medical Insurance Bureau (MIB) has access to ALL your medical records
Even minor things (like getting imaging for headaches) can flag you and increase premiums
Jenn's story: Great health rating, lower premium
Chris's story: One seizure from paintball at 21 flagged him for years
[26:40 - 30:00] The Integrity Factor
Insurance companies will test for things like nicotine in your hair if you claim to be a non-smoker
Lying on applications can void your entire policy
Smokers can requalify as non-smokers after 12 months nicotine-free and cut premiums in half
[30:00 - 35:20] Why We're Talking About This
Jenn's perspective: Health and wealth are connected
Financial stress impacts health; lack of finances prevents getting health support
The gap in what we weren't taught as adults, parents, business owners
Teaching preparedness so people know what questions to ask
[35:20 - 40:00] How Permanent Policies Build Cash Value
Example: $100/month → $25 to insurance, $75 to investment
Money grows tax-free inside the policy
You can borrow from it with minimal or zero tax (depending on timing)
Compare to RRSPs: 100% taxed at withdrawal at your marginal rate
Insurance companies are great at saving from taxation; investment companies are great at making money—permanent policies combine both
[40:00 - 43:00] The Self-Lending Strategy
Build cash value you can borrow from tax-free or with greatly reduced tax
Use for home repairs, helping kids, investments, etc.
You can put in $300-500/month—insurance still only costs $25, rest goes to your investment fund
[43:00 - 46:00] Inflation & Long-Term Planning
Average Canadian couple needs $2.5-3 million to retire comfortably
Inflation designed to be ~2.5% annually
Example: Bag of milk was $2-3 twenty years ago, now $6-9, will be $20 in the future
If you're only making 2.5% interest, you're just keeping up with buying power—not growing wealth
Importance of reviewing statements together as a couple (even when uncomfortable)
✅ Insurance as Foundation, Not Expense: Permanent life insurance should be viewed as the foundation of your financial house—not a bill, but an investment that protects everything else you build on top.
✅ Two Types of Permanent Policies:
Whole Life: Conservative, dividend-based, great for self-lending
Universal Life: Market-invested, higher growth potential
✅ Tax Advantages: Money grows tax-free inside permanent policies, and you can borrow from your cash value with minimal or zero tax (unlike RRSPs, which are 100% taxed at withdrawal).
✅ Get Insured Young: Health changes, medical records, and age all impact premiums. The younger and healthier you are when you get insured, the better your rates—and they're locked in for life.
✅ The MIB Knows Everything: The Medical Insurance Bureau has access to all your medical records. Even minor health events (like imaging for headaches) can flag you and increase premiums.
✅ Inflation is Real: The average Canadian couple will need $2.5-3 million to retire comfortably. If your money is only growing at 2.5%, you're just keeping up with inflation—not building wealth.
✅ Self-Lending Strategy: Permanent policies allow you to build a "personal bank" you can borrow from for major expenses, investments, or helping family—without traditional loan approval processes.
✅ Transparency Matters: Any advisor should be able to explain exactly where your money is going, how returns work, and provide full paperwork. If they can't, walk away.
✅ Health & Wealth Are Connected: Financial stress impacts your health, and lack of finances prevents you from getting the health support you need. They're not separate—they're intertwined.
Let's dive in!
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