CONTRACT DESIGN
Policies built for the strategy
A contract meant to fund the Infinite Financial Sovereignty strategy is designed differently from one bought only for the death benefit. The difference is in the design, not the brochure.
The design choices that decide how a contract behaves
- How the premium is splitThe proportion directed to the base contract against the portion that buys additional paid up coverage changes how early value builds.
- How long premiums are payableA contract paid over a set number of years and one paid for life are different instruments with different early behaviour.
- Who owns it, decided before it is issuedPersonal, corporate, holding company or trust ownership changes the tax position, the creditor position and who controls the value. Changing it later is expensive and sometimes impossible.
- What is guaranteed and what is declaredThe guaranteed values are written into the contract. Dividends are declared each year at the insurer’s discretion and are never promised.
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No price appears on this page, and none is sent by email. What a contract costs depends on the person and the design, and no honest figure can be produced from three answers.
The cornerstone guide
Start here: the whole strategy in one page
What it is, how it works in Canada, what it costs, what it risks, how long it takes and who it does not suit.
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A first conversation establishes whether this fits. No illustration is prepared and nothing is arranged.
Often the answer is no, and you will hear it during the call rather than in a proposal afterwards.
About the author
Jose Salloum is a Financial Security Advisor (Conseiller en sécurité financière) licensed by the Autorité des marchés financiers in Quebec, by the Financial Services Regulatory Authority of Ontario, and by the Insurance Council of British Columbia. Licensed since 2001, he works with Canadian families, business owners and incorporated professionals.
He is the founder of Canadian Wealth Creation Centre Inc. (CWCC), registered with the AMF, and of its educational branch IBCFinancial.com. He holds the Infinite Banking Concepts® Authorized Practitioner certification from the Nelson Nash Institute, a private certification rather than a regulatory licence.
CWCC is not registered with CIRO and does not provide securities advice. This page is general education and not advice on any individual file.
Important disclosures
This page is education, not advice. The content is general information prepared by Canadian Wealth Creation Centre Inc. It does not take your circumstances into account and is not a recommendation to buy, hold or cancel any contract. CWCC is not registered with CIRO and does not provide securities advice. The firm places insurance in Quebec, Ontario, Alberta, British Columbia, Manitoba and New Brunswick; clients elsewhere are served by advisors licensed in their province.
Nothing here was written with your file in front of us. Read it to understand the subject, then judge it against your own situation, ideally with someone who is licensed where you live and who has seen your numbers.
Tax treatment depends on your own circumstances. The tax treatment described depends on the contract remaining exempt under the Income Tax Regulations and on the reader’s individual circumstances. A withdrawal, a surrender or a policy loan may be a disposition under the Income Tax Act, and amounts above the adjusted cost basis may be taxable in the year they occur. Tax rules change.
The tax result is not automatic and it is not unconditional. It rests on the contract staying within the Canadian rules and on your own situation. Before you rely on any of it, talk to an accountant who has actually worked with these contracts.
Guarantees come from the insurer, not from the government. Guaranteed values in a life insurance contract are contractual promises of the issuing insurer and depend on that insurer’s financial strength and claims paying ability. Dividends on a participating contract are not guaranteed, are declared at the insurer’s discretion and can change. Policyholder protection in Canada is provided by Assuris within its published limits; deposit insurance does not apply to insurance contracts.
The guarantees written into a contract are real, and they are the insurer’s. The dividend is not a guarantee at all; it is what the insurer decides to declare each year. Know which numbers are which before you make a plan around them.