Insurance Understood: Yogurt
By Steve Meldrum on April 1, 2023.
Do you like yogurt? What type do you like? Imagine you’re sitting down to enjoy some yogurt, right now, what does the ideal experience look like? Think about the details for a minute. Do you like it plain or dressed up with fruit, coconut, nuts etc. Do you like low fat, high fat or regular? Did it come as a single serving or as a tub of it? What’s the sugar content, is the fruit in the bottom or mixed, and who mixed it, you, or the yogurt company? There’s a lot to unpack when someone says they like yogurt. This got me thinking of permanent life insurance, funny enough, as I ate yogurt a few days ago. Permanent life insurance is a type of life insurance that never expires and may combine a death benefit with a savings element. That’s a very basic definition and comparable to you saying that you like yogurt. Plain permanent insurance will pay a death benefit, tax free to the beneficiary when the insured person dies. You simply choose a coverage amount and there is nothing fancy about it. This works well when you have a very clear need that will not change. For example, a desire to leave a pre-determined gift to someone or a cause you care about. Another example specific to business owners is when you have done an estate freeze and your accountant can calculate the taxes owing on those preferred shares upon death. Business owner needs are like the Greek yogurt, a little more niche and unique. I mentioned how permanent life insurance can have a savings element as well. This savings is either called the cash value, when the company has added the fruit in or account value, when you have added the fruit in yourself. Either way, it sweetens the policy up. Both can get you similar results in the end, so it comes down to preferences. Some people don’t want to be bothered with extra steps, so go with whole life insurance and others enjoy customizing the experience, so go with universal life insurance. With both categories of permanent life insurance, the cash value / account value can be structured in a way to have this fruit at the front end, mixed throughout, or saved for the end. Each option applies to a different expected experience. My experience tells me that most people enjoy fruit at some point in their yogurt journey. No one is better than the other, so it is more about aligning your needs and expectations. Some people like a more exotic experience when it comes to yogurt and permanent life insurance. You can get very niche to accomplish your specific goals. You may not be able to go to a retail provider though. It may require more time and expense, but can be very fulfilling and satisfying when done right. If not done right, you will likely cancel the policy, making it a waste of your time, money and be left unfulfilled. It’s kind of like throwing away yogurt, a shame. I personally love yogurt. I also love permanent life insurance. Most people enjoy them too. There are a variety of options, and all can make sense when applied properly. I hope you smile the next time you look at your yogurt or permanent life insurance policy. Steve Meldrum B.Mgt. CFP CLU is the founder of Swell Private Wealth Ltd. For over a decade he has specialized in helping individuals and businesses expand protect and perpetuate their wealth. For further information or tailored advice, contact him at 403-487-0490, steve@swellwealth.com or connect on social media 8-7
