Do I need permanent life insurance?
Only if there is a need that does not end. Term insurance covers a defined period for a fraction of the cost and pays nothing if the insured survives it. Permanent coverage suits an obligation that persists until death, and that test comes before any discussion of accumulated value.
What kind of answer this is
- Claim type: Professional judgment
- Jurisdiction: Canada wide
The distinction between the two products is a contract fact. Deciding which need a household actually has is professional judgment applied to that household.
How it works
if one is missing the answer is no
Four things required before anything else
- 01Durable surplus cash flow, in an ordinary year
- 02A horizon measured in decades rather than years
- 03A place in the household's wider position
- 04A clear purpose for the contract itself
A need with an end date is a term need: a mortgage, dependent children, an obligation that closes. A need without one is permanent: a tax liability arising on the final return, a shareholder agreement, a dependant with a lifelong disability, an estate the family intends to hold together.
The cost or the catch
the cycle a contract is used through
Funding, drawing and repaying
- Premium funds the contract on the agreed schedule
- Value accumulates under the terms of the contract
- The insurer advances against the cash value
- Interest accrues to the insurer while a balance stands
- Repayment restores the capacity that was used
A permanent contract bought without a permanent need has been bought for the wrong reason, and the cost of that mistake is paid in the early years where the pricing sits. Writing the obligation and its end date down first is what prevents it.
How to decide
Listing the household's obligations and writing an end date, or its absence, beside each one is an exercise that takes an evening and answers the question better than any sales pitch. An obligation with no end date calls for coverage with no end date, and an obligation that closes in ten or twenty years calls for coverage that closes with it.
Where this answer may not apply
- Corporate ownership, buy and sell agreements and estate structures change the analysis, and the tax consequences of the need itself belong to a CPA or to counsel.
- Sizing and structuring coverage is a separate exercise from deciding whether a permanent need exists at all.
- Health and age decide what is available, whatever the analysis concludes is wanted.
What to verify in your own contract
- The obligation the coverage is meant to meet, written down with the date it ends.
- The cost of term coverage for exactly that period, priced before anything else is considered.
- Whether any group coverage ends at retirement or on leaving the employer.
- Whether a term contract already held carries a conversion privilege, and when it expires.
Continue to the full explanation
Continue to the next question in this stage.
Accountability and disclosure
- Written by
- Jose Salloum
- Professional capacity
- Financial security advisor, Canadian Wealth Creation Centre Inc., operating as IBC Financial
- Reviewed by
- Insurance and contract education tier, reviewed under a licensed insurance professional's own authority
- Jurisdiction
- Canada wide
- Last reviewed
- 2026-08-31
- Version
- 1.0
- Compensation disclosure
- Canadian Wealth Creation Centre Inc., operating as IBC Financial, may receive insurer paid compensation if a policy is purchased. It takes the form of first year compensation followed by renewal compensation, and the amount varies by insurer, product, age, premium, contract design, riders and the arrangement with the managing general agency. No single figure would describe every contract honestly, and none is published here.
- Report a correction
- Info@ibcfinancial.com. Write without a policy number, medical information or account details.
About the author
Jose Salloum is a Financial Security Advisor (conseiller en sécurité financière) certified by the Autorité des marchés financiers in Quebec, a Life and Accident & Sickness Insurance Agent licensed by the Financial Services Regulatory Authority of Ontario, and a Life Insurance Agent licensed by the Insurance Council of British Columbia. Licensed since 2001.
He has practised The Infinite Banking Concept® since 2015 and founded Canadian Wealth Creation Centre Inc., which operates as IBC Financial, in 2016. He holds the Infinite Banking Concepts® Authorized Practitioner certification from the Nelson Nash Institute. That is a private certification rather than a regulatory licence.
IBC Financial is the education platform of Canadian Wealth Creation Centre Inc. This page is general education and not advice on any individual file.
Last reviewed 2026-08-31. By Jose Salloum, Financial Security Advisor.