By city

Infinite Banking in New Westminster

Nearly every explanation of this strategy assumes you own a house. A large share of households in New Westminster do not, and that changes the analysis in both directions.

The Royal City

New Westminster was the first capital of the colony, named by Queen Victoria, and still holds the oldest street grid in the province. Columbia Street runs along the Fraser below the escarpment, the Quay and the old rail bridge sit at the water, Sapperton climbs east toward Royal Columbian Hospital, and Queen's Park keeps the heritage houses that survived the fire of 1898.

What matters financially is tenure. New Westminster has one of the higher proportions of renter households in the region, in a mix of older low-rise stock and newer towers, and almost nothing written about this subject is addressed to them.

What renting actually changes

This is the page's central point, and it cuts both ways rather than one.

In favour of paying attention: a renting household has no forced savings. A mortgage, whatever else it is, moves money into an asset every month whether the household feels disciplined or not. A renter has no such mechanism, and the whole of their long-term position depends on deliberate saving. A structure that requires a fixed payment on a schedule addresses a real gap that homeowners do not have.

Against: a renting household usually has less margin and less security of tenure. Rent rises, a building is sold, a fixed-term tenancy ends, and the household moves on someone else's timetable. Committing to premiums for thirty years while your housing cost is outside your control is a different risk from committing while carrying a fixed-rate mortgage on a home you will not leave.

Both are true. Which dominates depends on the security of your income and your reserve, not on which argument was made to you more forcefully.

The order for a renting household

An emergency reserve comes first and it should be larger, not smaller, than a homeowner's. A renter facing a move needs first month, last month, a deposit and moving costs available at short notice, and that money must not be inside a thirty-year contract.

Then unused registered room. A TFSA is liquid, its growth is not taxed, and withdrawals do not create a taxable event or a contract obligation. For a household whose housing situation could change in three years, that flexibility is worth a great deal, and it costs nothing to keep.

Only after those does a long-dated premium make sense. Cash surrender value stays below cumulative premiums for many years, commonly more than a decade, so an early exit is a loss, and a forced move is a common cause of one.

If you intend to buy

Say so at the start, because it changes the answer completely. Money committed to premiums is money not available for a down payment, and cash value in the early years is worth less than what was paid in. A household saving for a purchase in the next five to seven years is generally better served by liquid savings and the registered accounts designed for that purpose. A practitioner who does not ask whether you plan to buy has not asked the question that matters most to a renter.

British Columbia rules and where it does not fit

Insurance in British Columbia is regulated by the Insurance Council of British Columbia, and a professional here holds a Life Insurance Agent licence. Verify it in the Council's public register and ask how the person is paid. British Columbia has no title protection statute of the kind Ontario, Quebec and New Brunswick have enacted.

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 household carrying high-interest consumer debt should deal with that first. 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. Say at the outset that you rent. It should change what you are shown, and if it does not, that is worth noticing.

One closing word on the death benefit need, which a renting household genuinely has and which gets forgotten because there is no mortgage to clear. If people depend on your income, they will have to keep paying rent without you, and rent never ends whereas a mortgage eventually does. The need is real, it can be costed, and term insurance answers it at a fraction of the cost of permanent.