By city

Infinite Banking in Saint-Jérôme

Saint-Jerome is the gateway to the Laurentians, and a substantial share of income here follows construction and the tourist season. Uneven income is the profile this strategy handles worst, and it deserves the mechanism rather than a warning.

The gateway north

Saint-Jerome sits on the Riviere du Nord at the foot of the Laurentians, with the Saint-Jerome cathedral above the old centre. The P'tit Train du Nord linear park begins here and runs more than two hundred kilometres north toward Mont-Laurier along the former railway, the same line Cure Labelle had built to open the region to settlement.

What matters financially is the shape of the income. A substantial share of employment here follows construction, the trades, transport and the Laurentian tourist season. These are decent incomes, sometimes very good ones, but uneven from month to month and year to year.

The mechanism, not the warning

Telling a seasonal worker to be careful accomplishes nothing. Here is what actually happens when a premium meets a bad year.

If the contract draws an automatic premium loan against cash value to keep the policy in force, that is a real loan with real interest owed to the insurer, not a courtesy. It grows quietly, capitalised interest compounds at the policy anniversary, and two or three difficult seasons in sequence can leave a policy carrying a balance nobody consciously took.

A lapse with an outstanding loan and an accumulated gain is a taxable disposition, and it arrives in the year the income had already stopped. That is the sequence which does the most damage, and it never begins with a decision: it begins with a premium sized against a good year.

The answer fits in one sentence. Size the base premium against your worst plausible year, the one with the short season, and put strong-year capacity into paid-up additions. In most contracts the base premium is the binding obligation and additional deposits are the flexible part. Ask specifically how the contract treats a skipped additional deposit versus a skipped base premium, because the answers differ, and that difference is the one that concerns you most.

The self-employed tradesperson and the subcontractor

Many trades here are practised through self-employment or by contract. Two consequences are worth stating.

First, there is generally neither a pension nor group insurance. The retirement argument therefore applies more fully than it does to a public sector employee, and so does the death benefit need, because no employer is covering it.

Second, self-employment income varies more than a salary and is verified differently. Bring three years of returns rather than one good year, and average the three before discussing a premium. A practitioner willing to work from that figure is assessing your situation.

The two 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 an emergency reserve, or carrying high-interest consumer debt, should deal with those first, and a seasonal worker needs a larger emergency reserve than a salaried employee, not a smaller one. Cash surrender value is typically below cumulative premiums for many years and commonly for more than a decade, so an early exit is a loss.

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.