term-vs-permanent-life-insurance:-which-one-makes-sense-for-you-right-now?
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Term vs Permanent Life Insurance: Which One Makes Sense for You Right Now?

ByStan S.

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Life insurance is one of those financial products people know they need but often avoid discussing. The choice between term and permanent coverage can feel more complicated than it needs to be, especially when you’re trying to make the right decision for your stage of life.

This article walks through three real-life scenarios to help you see how these policies work in the real world. No sales pitch. Just clarity, with the goal of helping you protect what matters most.

What’s the Difference?

Term life insurance is designed to cover you for a specific period, such as 10, 20, or 30 years. It’s typically used to protect against time-limited risks like a mortgage or the cost of raising children. Premiums are lower and fixed for the length of the term.

Permanent life insurance lasts for your entire life and comes with a built-in cash value component that grows over time. You pay more up front, but the policy can serve multiple purposes: coverage, savings, and estate planning.

Both types of coverage have their place. Here’s how they play out in real financial lives.

Scenario 1: The New Homeowners

Sam and Dani are both 31 and recently bought their first home in Kitchener. With a 25-year mortgage and a baby on the way, they’re feeling the weight of financial responsibility for the first time. They want to make sure that if either of them passes away unexpectedly, the surviving partner could manage the mortgage and continue building the life they’ve started.

They choose 25-year term life insurance policies that align with the length of their mortgage. The cost is manageable, which is especially important given the added expenses of homeownership and upcoming childcare. More importantly, the coverage gives them peace of mind. If something happens, the mortgage would be paid off and the household could stay afloat.

For Sam and Dani, permanent insurance isn’t on the radar yet. Their focus is on affordability and covering major risks during a very specific time in their life. Term insurance checks all the boxes without adding extra financial strain.

Scenario 2: The Business Owner Planning Ahead

Jordan is 45 and runs a successful HVAC company with a team of 14 employees. He’s worked hard to build the business and wants to make sure it survives if something happens to him. At the same time, he’s starting to think about how to create tax-efficient wealth that he can pass on to his children.

Jordan decides to take a layered approach. He keeps a 20-year term life policy in place to protect the income his family relies on. This also provides liquidity to cover outstanding business debts and operating expenses in case of his death.

But he’s also thinking long term. Working with his accountant, Jordan adds a corporate-owned permanent life insurance policy. The cash value inside the policy grows tax-deferred and gives him options. He could borrow against it in retirement or use it as a tool to pass wealth to the next generation more efficiently.

This combination gives Jordan both flexibility and control. The term policy handles today’s risk. The permanent policy quietly builds value in the background, ready to support a future need.

Scenario 3: The Retiree Focused on Legacy

Nora is 68 and enjoying her retirement in Victoria. Her home is fully paid off, and she lives comfortably on her CPP, OAS, and a small investment portfolio. She doesn’t have any dependents, but she wants to make sure her final expenses are covered and that she can leave a small legacy to her niece, who helped care for her during a health scare last year.

With those goals in mind, Nora applies for a small permanent life insurance policy. The premiums are locked in for life, and the policy guarantees a payout whenever she passes. There’s no expiry date and no need to revisit her coverage every few years. She likes the certainty and appreciates the simplicity.

For Nora, a term policy wouldn’t offer the same peace of mind. It could expire before she needs it or cost much more to renew later. Permanent coverage allows her to set the policy in place and know the funds will be available when her estate needs them.

How to Choose Wisely

Your decision should reflect your current priorities. If you’re in the early stages of building a family or paying off debt, term insurance gives you solid protection at a price that works with your budget. If you’re thinking about legacy, tax efficiency, or lifelong coverage, permanent insurance may be the better fit.

Many Canadians start with term coverage and move to permanent later. Most term policies include a conversion option, allowing you to switch to permanent coverage without new medical underwriting. This is a valuable feature if your health changes as you age.

Final Word

There’s no single right answer when it comes to life insurance. The right choice is the one that supports your goals, fits your finances, and protects the people and plans you care about. Whether you’re starting a family, building a business, or preparing your estate, life insurance should align with where you are and where you’re going.

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    ByStan S.

    If you’re using cash damming with your rental property, you already know how powerful the strategy can be. By paying expenses through a HELOC and deducting the interest, you generate a sizeable tax refund each year. Traditionally, that refund gets applied straight to the mortgage on your primary residence, helping you pay it off faster and reduce your overall interest costs. It’s a solid, no-frills move, and makes a lot of sense. But that’s not the only path forward. Depending on your financial priorities, there may be more strategic ways to put that refund to work. Here are three alternative options worth considering. 1. Pay Down Consumer Debt If you’re carrying credit card balances, personal loans, or other high-interest debt, using your refund to eliminate those obligations can offer a stronger short-term return than paying down your mortgage. It also improves your monthly cash flow, giving you more flexibility with your budget or room to invest elsewhere. This move clears the way for you to free up valuable cash flow and tackle your next financial goals. 2. Invest in the Market Once high-interest debt is behind you, your refund can become the fuel for long-term wealth. Rather than leaving that cash idle or reducing low-interest debt, consider reallocating it to market investments that grow over time. Even modest, recurring contributions made consistently each year can meaningfully improve your net worth over a 10 to 20 year horizon. It’s less about making big bets and more about establishing a habit of reinvesting tax savings into productive assets. 3. Fund a Life Insurance Strategy Putting your refund toward a permanent life insurance policy can provide more than just a death benefit. Over time, these policies can accumulate tax-advantaged cash value, which can later be used to supplement retirement income, cover future tax liabilities, or serve as a low-cost borrowing source. It’s a way to convert your annual tax refund into a long-term financial tool that grows quietly in the background, while also protecting your family’s future. The earlier you start, the more efficient and flexible the strategy becomes. Final Thoughts Choosing to redirect your tax refund away from the mortgage isn’t about doing things right or wrong. It’s about making choices that reflect your current financial priorities and long-term goals. At the core of this is the rental cash damming strategy itself. By optimizing your cash flow for maximum tax efficiency, you unlock a source of capital that wouldn’t otherwise exist — a refund that can be used strategically to generate even greater financial gains. Whether it’s paying off debt, investing for the future, or building long-term insurance value, that refund becomes a tool, not just a rebate. There’s no one-size-fits-all answer here. The best approach is the one that aligns with your goals, your cash flow, and the kind of financial life you’re trying to build.

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    The 3-Bucket Plan: Organize Your Money for Today, Tomorrow, and the Long Haul

    ByStan S.

    Most financial stress comes from one thing: not knowing if you’re doing it right. You’re juggling conflicting goals: saving for a house, preparing for emergencies, investing for retirement. But with no clear structure, decisions become reactive. That’s where the 3-Bucket Plan comes in—a dead-simple framework to bring order to your finances and peace of mind to your planning. One Strategy, Three Timelines At its core, the 3-Bucket Plan divides your savings into three distinct timeframes: Now, Soon, and Later. Each bucket has a role to play—and when they’re all working together, your financial life runs smoother. Let’s break it down. Bucket 1: The Now Bucket This is your financial airbag. It cushions the bumps—job loss, car repairs, a slow business month. Anything unexpected that life throws at you in the next 12 to 24 months lands here. You’re not aiming for growth—you’re aiming for sleep-at-night money. That means high-interest savings, short-term GICs, or even a boring chequing account if it gets the job done. The goal isn’t to get rich here—it’s to avoid going into debt when something goes sideways. Bucket 2: The Soon Bucket This is where many people stall out.  You’ve got meaningful goals on the horizon—maybe a home upgrade, a career break, or launching a business. But the timing is tricky: too far out for a regular savings account, too soon to take big investment risks. That’s where a dedicated mid-term bucket comes in. It acts as a financial runway—giving your money room to grow, while keeping volatility in check. The focus here is balance: enough return to stay ahead of inflation, with enough stability to preserve your capital when you need it. A well-structured mix might include conservative ETFs, dividend stocks, or short- to mid-term bonds. Done right, this bucket builds momentum and funds your next move—without betting the house to get there. Bucket 3: The Later Bucket This is your long game—retirement, legacy, or true financial independence. Money you won’t touch for at least 10 years lives here. Because time is on your side, this bucket gets the growth mandate. Think equity-heavy portfolios, global diversification, corporate-class investments if you’re incorporated. Your RRSPs, TFSAs (used for investing), and pensions belong here. Ironically, this is often the most neglected bucket for Canadians under 40. Why? Because “later” always feels like it can wait. But the math says otherwise. The earlier you fill this bucket, the less you’ll need to put in later. Why It Works The 3-Bucket Plan doesn’t give you more money. It gives your money more clarity. Instead of agonizing over whether to save, spend, or invest—you just ask: Which bucket does this belong to? This reduces decision fatigue, helps you avoid costly mistakes (like pulling retirement funds to cover a car repair), and gives you confidence that your money is aligned with your life’s real timelines. How to Start You don’t need fancy spreadsheets. Just three steps: Categorize what you’ve got. Look at every dollar you’ve saved and assign it to one of the three timelines. Check for mismatches. Is your emergency fund in volatile stocks? Is your retirement money sitting in a chequing account? Time to realign. Automate your contributions. Set up monthly transfers into each bucket based on your goals and income. Small, consistent actions beat big, inconsistent ones. Final Word Good financial plans don’t require genius. They require structure. The 3-Bucket Plan doesn’t just help you save—it helps you think. It turns scattered decisions into a system. One that keeps you grounded today, gives you freedom tomorrow, and builds real wealth for the years ahead. Simple, flexible, and wildly effective. That’s how you win.

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  • 5 Mortgage Myths That Could Be Holding You Back

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    ByStan S.

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  • Free Vancouver and Lower Mainland Events in July

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Gulf of Georgia Cannery – admission to the historic site in Steveston Village is free this summer. Fort Langley – admission to the national historic site is free for Canadians this summer. Shipyard Pals – free walking tours happen today in North Vancouver’s Shipyards District. They are hosted by MONOVA (a.k.a. the Museum of North Vancouver). Lower Mainland Parks – on days with good weather, and it’s not too hot, many of the region’s top parks are best places to be. Other great areas to enjoy include Best

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