# Using Whole Par insurance to protect left over rsp



## switch01 (9 mo ago)

Our advisor for 25+yrs is wanting us to take on Whole/Par insurance. Her reasoning, we will die with too much money in our rsp based on our project spending in retirement. I suggested we raise our projected spending. 
From what I have searched out she may be making some good money off this if we purchase whole/par insurance. 20k a year or the whole/par insurance. Also she refuses to call it life insurance and states it is a way to compensate the tax grab when the last one dies. 
Any advice or further questions are welcome.

SS


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## Beaver101 (Nov 14, 2011)

^ Do you have kids and if so, how destitute are your kids after leaving your inheritance for them? That is what that advisor(of some sorts) should be asking you first. Is this part of the financial plan she did for you or is it to fill in her commissions schedule or maybe pay for the office's rent?


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## cainvest (May 1, 2013)

switch01 said:


> Our advisor for 25+yrs is wanting us to take on Whole/Par insurance. Her reasoning, we will die with too much money in our rsp based on our project spending in retirement. I suggested we raise our projected spending.


Too much money is a good problem ... I agree, increase your withdrawal.

BTW, this doesn't mean you have to spend it all ... toss the extra into a TFSA (tax benefit for last spouse) who can then give money out to whoever at any time.

Edit: If your advisor doesn't like you increasing your spending I would suggest "mentioning" it might be time for a new advisor ... see if that changes her tune.


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## switch01 (9 mo ago)

Yes, we have children (adults with good jobs) and they will not be destitute. She was more interested in selling the narrative "keep the money from the tax man".


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## Beaver101 (Nov 14, 2011)

^ Figures. cainvest's Edit above is a good suggestion.


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## switch01 (9 mo ago)

Thanks for all your replies, very helpful. Just to add on more thing. She states the money (20k per year) would be taken from my tfsa so we wouldn't notice an impact on our current income. This is the 3rd year in a row she has tried this....tiring.


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## off.by.10 (Mar 16, 2014)

switch01 said:


> She states the money (20k per year) would be taken from my tfsa so we wouldn't notice an impact on our current income.


So how does taking money out of your TFSA help with too much money in your RRSP? This is more and more sounding like she wants to line her pockets with more of that excess money.


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## cainvest (May 1, 2013)

switch01 said:


> Thanks for all your replies, very helpful. Just to add on more thing. She states the money (20k per year) would be taken from my tfsa so we wouldn't notice an impact on our current income. This is the 3rd year in a row she has tried this....tiring.


Always difficult to see issues without the big picture BUT something does seems off here. Maybe it's in your best interest to get a second opinion from another financial advisor.


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## switch01 (9 mo ago)

Not sure what else to add. Could someone outline when someone would purchase par/whole insurance. 
My life is not complicated. Two adult children with good jobs, wife/me 55yrs old and paid off house. Plan to retire in 2 years.
1.2mill in rsp/tfsa, db pension for me. Spreadsheet from advisor says with 90k a year spending we will have 440k tax liability when the last one dies age 90. Again I say couldn't I just raise our spending and share the money with the kids during retirement.


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## ian (Jun 18, 2016)

switch01 said:


> Not sure what else to add. Could someone outline when someone would purchase par/whole insurance.
> My life is not complicated. Two adult children with good jobs, wife/me 55yrs old and paid off house. Plan to retire in 2 years.
> 1.2mill in rsp/tfsa, db pension for me. Spreadsheet from advisor says with 90k a year spending we will have 440k tax liability when the last one dies age 90. Again I say couldn't I just raise our spending and share the money with the kids during retirement.


Why not engage a tax professional, a CPA with a tax specialty,to review your situation and establish a go forward plan for you? 

We did this a number of years ago. We plan to do it again for a refresh when we have to deal with RSP’s and LIRA.

Make your decision on the numbers. Your investment advisor, IMHO, is trading on fear and uncertainty.

Has your advisor given you any go forward hard numbers that compare increasing withdrawals to the Big Bang theory at the end from a tax liability/avoidance perspective???


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## switch01 (9 mo ago)

Each time I bring up increasing the withdrawls, inheritance for the children comes out. The childern (adults) will be fine even if we spend it all. The house is their's to cash in; currently worth 700k


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## OptsyEagle (Nov 29, 2009)

It shouldn't take more then 3 "no's" to get your financial advisor to finally hear your decision. It is obvious she is working for herself, not you, don't you think?

There are many reasons why a person buys permanent life insurance. The reason she suggests can be overwhelmingly appreciated by many people, but from my experience, not the majority, and that of course means, not everyone. When you consider the fact that the taxes all still get paid, no matter what you do, which is usually the thrust of the problem these agents argue, you can clearly see that all life insurance does, and ever can do, is create MORE money for survivors, when someone dies. When those survivors are people you care deeply for AND will have financial difficulties when/if you die, then the money you spend on insurance is money well spent. 

In your case, it does not appear to me that is an issue. Personally l almost always give salespeople the benefit of at least 2 no's. I was in sales myself and although I found many people say no initially, they are many times making that decision on preconceived, incomplete and/or erroneous information. I then would skirt around that first no, give a few more important reasons for my suggestion and then listen to their reply. After the 2nd no, which usually comes where I feel I have heard their true feelings and opinions, I thank them for their time and go find a more suitable prospect for my idea. Your salesperson, is of the different class. She thinks the whole world must do and think the way she does and will probably continue to ack like a Pitbull, until everyone does. They make great salespeople for the companies they work for but are some of the most annoying humans on the planet for the customers of those same companies.

Do yourself a favour and get a new advisor...or go it alone, whatever works best for you. You should by now have all the evidence you need to confirm the suspicion you must have already of had, about who her true allegiance is to.


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## Beaver101 (Nov 14, 2011)

OptsyEagle said:


> It shouldn't take more then 3 "no's" to get your financial advisor to finally hear your decision. It is obvious she is working for herself, not you, don't you think?
> 
> There are many reasons why a person buys permanent life insurance. The reason she suggests can be overwhelmingly appreciated by many people, but from my experience, not the majority, and that of course means, not everyone. When you consider the fact that the taxes all still get paid, no matter what you do, which is usually the thrust of the problem these agents argue, you can clearly see that all life insurance does, and ever can do, is create MORE money for survivors, when someone dies. When those survivors are people you care deeply for AND will have financial difficulties when/if you die, then the money you spend on insurance is money well spent.
> 
> ...


 ... for a change, thank you for your honest feedbacks *in bold* there. I'm shocked.

Btw, you should mention that 95% in sales there are like pitbulls. You would be very very very lucky to find that 5% working for your interest(s).


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## OptsyEagle (Nov 29, 2009)

The main reason you are lucky to find maybe 5% that might work in your interest is because the companies, the other 95% worked for, either fired them or adjusted their incomes to a level where they would leave on their own. Unfortuneately, we are left with perhaps 5% and the ones that replaced them are usually a lot more aggressive and less concerned about ethics, then the ones that were fired or left. That is one of the main reasons why these sales behaviours are so prevalent, in my opinion.

As I have said, there are a few good ones but they are getting harder and harder to find. I will also point out that many times we can end up bringing on this frustration to ourselves. For example, many people will do what may seem natural and shop around for the best financial advisor. Nothing wrong with that so far. They will interview 3 or 4 advisors and then take the one that appears to be giving them the best offering or seems to be the best fit. The problem with that method is they forget that the bad ones tend to not have any ethical issue with lying or stretching the truth or leaving out the bad stuff, etc., and the honest ones tend to give all the bad with the good, for any account, investment or product. What happens then is the dishonest person tends to appear, to that customer during these interviews, to be the better option. Add to that the fact that a friendly trusting personality or someone with similar interests or even a referral from a friend, tells you little about their true nature, and more often then not, the customer will end up not doing business with the more honest salesperson, feeling that less honest and very friendly one would be a better fit, offering a better deal...and that is probably the main reason we find so many of them in the world.

Anyway, it is what it is. No surprise more and more people are going DIY.


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## Retired Peasant (Apr 22, 2013)

For 25 years you have been with this advisor? If you care to share, tell us what she has you invested in, inside your RSP and TFSA. I would bet she's been lining her pockets with fees for years.


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## Spudd (Oct 11, 2011)

The advisor will earn $$$ for you buying this insurance. She will also earn more $$ the more money you have invested with her. It's not in her interest for you to enjoy life by spending your own hard-earned money. The more you leave with her "for the children" the more she takes home to enjoy her own life. It's slimy.


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## ian (Jun 18, 2016)

It sounds to me like you need a complete review of your financial and tax positions. Complaining about it will not help...you need to action it and move forward. We did this ten years or so prior to early retirement. So glad that we did.

From my perspective these are 2 different activities.

The first would be a solid tax plan by a tax professional. It would lay out your best tax avoidance strategy going forward. Big bang or realize more income or a combo of both. These will be hard numbers. This may not be complicated or expensive. Perhaps only a few hours of billable assuming you have all the required financial information organized. Focus on the benefit as well as the cost.

The second would be to review your investment advisor strategy. Cost and return based on your service requirements.

Whatever you do, DO NOT let some life insurance salesman or your current advisor dazzle you with unsubstantiated numbers or statements or tax horror stories.

You can make this decision based on emotion, a sales pitch and gut feel. OR....you make it based on the hard numbers from a well thought out go forward tax plan.

Frankly, I am somewhat surprised that your long term financial advisor has not previously recommended a tax planning exercise. Perhaps you are long overdue for a change.


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## switch01 (9 mo ago)

Thanks for sharing all the info above. I have decided to stay away from the Par insurance and have set up an appointment with someone in the tax field.


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## james4beach (Nov 15, 2012)

OptsyEagle said:


> They make great salespeople for the companies they work for but are some of the most annoying humans on the planet for the customers of those same companies.


A person should assume every salesperson is an adversary, not a friend.

The same must be done for "advisors" who work with mutual funds, as they almost always get sales incentives/fees and are nothing more than salespeople.

I think the ones that give people the most trouble as those salespeople who masquerade as experts, professionals, or scientists. This happens frequently in the finance field and on Wall Street, like with hedge funds. Having worked with some of these people directly I have seen the lengths they will go to, to convince and deceive others, just to take their money.

In finance, they lie about facts and figures, spin stories, and really say anything to get what they want. They will outright lie without breaking a sweat and smile pleasantly. They will say the most ridiculous and outlandish things without any fear of making a fool of themselves. They are shameless.

The poor people who are unprepared (and fail to put their guard up) are just sitting ducks. Never trust a salesperson.


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