By city

Infinite Banking in Dollard-des-Ormeaux

Dollard-des-Ormeaux was built almost entirely in twenty years. A town built at once ages at once, and that raises a question few pages on this subject address.

The town built at once

Dollard-des-Ormeaux occupies the centre of Montreal's West Island, around Centennial Park and its artificial lake. Incorporated in 1960, it went from a few hundred residents to more than forty thousand in about twenty years, almost entirely in single-family houses built between 1965 and 1985.

A town built at once ages at once. An entire generation reaches retirement here within the same decade, in houses long since paid off, whose children have gone.

The house that is too big, and the cost it hides

This is the page's central point, and it is financial before it is sentimental.

A 1975 house designed for four or five people often holds two. It is paid off, so it feels free. It is not: municipal and school taxes, heating unused square footage, and maintaining a roof, windows and systems that all reach the end of their useful life at roughly the same time because they were all installed at the same time.

Total twelve months of those costs before any conversation about a premium. The figure often surprises, and it reduces available surplus far more than the budget suggested. A strategy that requires premiums maintained without interruption for decades is not sized against what you believe you spend.

What the shorter horizon changes

The arithmetic of a participating policy rewards time above every other variable. At sixty there is less of it than at thirty, and no amount of enthusiasm changes that.

The practical consequence is that the guaranteed column becomes the one that matters and the illustrated column becomes decoration. Ask in which year surrender value is projected to exceed cumulative premiums, then ask the same question using only the guaranteed values. On a short horizon the two answers can be decades apart, and the second is the one you will live in.

Dividends are not guaranteed. They are declared annually by the insurer's board based on the participating account's experience, and the scale can be revised downward. A reader with thirty years ahead absorbs a poor decade. A reader with twelve cannot.

Insurability, asked first

This is the constraint always mentioned too late. An application can be rated higher or declined on health grounds, and the likelihood of both rises with age. Build no plan that depends on a policy being accepted before it has been accepted, and be wary of any presentation that treats acceptance as a formality.

Quebec rules and where it does not fit

A designation naming a married or civil-union spouse is presumed irrevocable in Quebec unless declared otherwise, and an irrevocable designation can restrict the ability to request a loan or assign the policy as collateral. Exemption from seizure depends on the class of beneficiary and on the circumstances, is never absolute, and disappears if the policy is assigned as security for a loan.

A household without dependants, without a corporation, with a pension that continues at full value to a survivor and with no identifiable capital need is a poor candidate. That describes a real number of households in this city, and saying so is more useful than finding them a reason.

Nothing on this page is advice. No assessment has been made of anyone reading it, and the author is not a neutral party: he is licensed to sell the contracts this strategy uses and is paid a commission when one is placed. Ask for the illustration in French, which is your right under the Charter of the French Language, read the guaranteed column first, check the licence in the AMF register, and take the answers to an accountant and a notary of your own choosing.