December 6, 2018

Episode 23: Glenn Cooke: The Basic Rules of Purchasing Insurance: What, Why, When and How Much!

December 6, 2018

Welcome back to The Rational Reminder Podcast. Today we are joined by Glenn Cooke. Glenn is a fixture on the personal finance Canada sub-Reddit and spent many years as the President of Lifeinsurancecanada.com, which is an online platform for insurance information. Today, Glenn is the President of Insurance Squared where he works with market research departments at life insurance companies and shows life insurance agents how to generate leads online and sell non-face to face. Glenn has a very matter of fact, rational approach to insurance and that’s what we talk to him about in today’s episode. He shares with us about the mistakes he commonly sees in insurance, especially the fact that most people way under buy the amount of life insurance that they truly need. Glenn also describes permanent insurance, what it is, when it makes sense and what situations it is best suited for. We hear about when it’s important to use investments versus not and as long as consumers stick to those basic rules, it’s hard to go astray. So for an incredible interview, keep listening to hear more!

Key Points From This Episode:

Over the phone and online - why that approach worked so well for Glen. [0:02:24.0]
Understanding field underwriting. [0:03:17.0]
Why some people are hesitant buying insurance online and prefer in person. [0:06:27.0]
Most common questions people are asking when buying insurance. [0:07:27.0]
Mistakes people are making when buying life insurance. [0:07:56.0]
Justifying how much you need. [0:09:31.0]
How disability insurance ties in very closely to life insurance. [0:10:34.0]
Settling for group disability insurance through your employer. [0:13:23.0]
What is permanent life insurance and where would it make sense. [0:15:25.0]
Two general categories of permanent insurance. [0:19:30.0]
Glen’s views on critical illness insurance. [0:21:21.0]
Three ways you can use life insurance. [0:25:46.0]
Ways you can get money out of your insurance policy. [0:28:08.0]
Glen’s observation about financial literary in Canada. [0:32:05.0]

Read the Transcript:

So, you built an insurance practice in a, I would say a very unique way especially for the time period when you did it, where your model was strictly over the phone and online. Can you tell us a little bit about why you think that approach to insurance was so successful?

It's really, I think more so the industry than consumers. Though, consumers are still a bit reluctant to work in this fashion. 10 years ago, when I founded Life Insurance Canada.com, the industry was not used to doing, like they didn't like internet leads, people collecting names and phone numbers off the internet, they had a very bad reputation. The insurance companies did not want to sell insurance policies to somebody that you hadn't met in person. There was a lot of rules around that kind of stuff that I had to basically, I just was very, very compliant, I was very careful about the methodology and I had a process for everything that satisfied the insurance companies and eventually over time we got them to bend and let us work with clients just over the phone.

Because I guess the risk is that you get people that are in need of insurance, you have this bias set of applications potentially coming. Is that what the fear was of the industry?

Well, the way I heard it described to me by an underwriter was, "How do we know we're not insuring somebody's dog, Rover Brown? Because you didn't see them and you don't know them." And my response to that was there's a sense in the industry that your insurance agents are supposed to be doing what's called field underwriting. We're supposed to be looking at the people and judging them and thinking of determining if they're a good risk or not.

But in practice and this was one of the points I made to the insurance companies, most agents don't do that and if they do, do it, there's no training. I can't look at somebody and tell if they're sick or a good risk, I have no training in that. Instead, what I would do is I was very careful about always taking my clients through a very methodical approach on how to do the medical exam and the medical questionnaires so that the insurance companies had a very, very good overview of the clients. And in the end, I think the insurance companies actually prefer it that way because they get a better picture of the client when there's full disclosure instead of me trying to judge whether or not they smoke or not.

So what about from the perspective of the clients? Like there's that classic image of the insurance salesperson sitting at the kitchen table trying to jam you with a permanent policy and the way that you were operating was the opposite of that. Can you just talk a little bit about why?

Yeah, absolutely. And curiously Ben as much as everybody's on the internet and get rid of the old insurance agent at the kitchen table and stuff, the vast majority of life insurance is still sold that way. And I think that's because the vast majority of consumers still want it that way. I think consumers do all their research online but when it comes right down they're still not quite ready to pull the trigger on actually purchasing insurance and they want to have somebody that they know and trust sitting at the kitchen table. So I was very much working a niche when we're doing this over the phone stuff. And what I would do that's different is I would just give them an education. There was no sales process or anything. I spent an hour with them on the phone, giving them a full rundown on how much insurance to buy and the various types, making some recommendations.

And I think the one big difference between what I do and what a traditional agent would do is I would never try and close them on the initial phone call so there's no pressure there. We would normally conclude with, "Tell you what, take the weekend to think about it, discuss it with your spouse and your family, do some more research based upon what we've talked and I'll call you back next Wednesday. And if you're ready, we'll do then start the paperwork." If you've got an insurance agent that's driven halfway across Toronto, seven o'clock at night and they're sitting at your kitchen table, there's a lot of pressure there. They do not want to spend that three hour round trip again going to your place. They want you to close right there, start the paperwork. So there just it's the over the phone bit there's a lot less natural pressure there I think.

But so few people I would guess are actually going on the internet looking for life insurance or am I just wrong on that assumption? Like most people that I talk to about life insurance is not kind of the top thing they want to do. So to do that on their own in their home I just don't see that being that likely although, the process you talk about is very appealing to talk to someone online that's not trying to sell you something it's very, very appealing but you've got to get to doing it.

Well, and you're correct again Cameron, this gets back to the idea that consumers still need to be sold life insurance. You've got to have an agent, an experienced agent for the most part, bring up the topics, suggests that we have a meeting and explain the options. They're still the people we worked with were very much a niche. They on their own had decided that they wanted to investigate life insurance, went on the internet and found us. But that is certainly not most people. I know the life insurance companies would love, I've actually had them tell me this, they would love to get rid of life insurance agents and just do it all over the internet. But again consumers are not ready, they won't buy life insurance of their own accord unless there's a life event that does that so it's still very much a niche. It's a growing niche and it's a fairly large niche but it's still a niche, it's still not the majority most people are still doing it the old school way.

So you've got this selection bias of people who are seeking out life insurance. So they've already done their own research when those types of people get to you. What's the most common question that they're asking?

They normally have actually done a lot of their research. I think it's like when you go in and buy a car, you know what kind of car you want. So they're more just looking for confirmation that their research is correct. I think that's a big thing, not a specific question so much as, "This is what I think it is, can you please confirm that, I want term or I want permanent and that's correct so that I don't end up with the poor life insurance policy."

So what's the most common mistake that you see that people make when it comes to life insurance?

In terms of the most common mistake, fire in a way it's not buying enough. And I hate to sound like an insurance salesman but the amount of insurance that people buy is it's almost never enough. I know there's a concern out there about being overinsured. Across thousands of clients, I have only ever seen two people that were overinsured in my opinion and the insurance companies were both reluctant to insure them. I had to make a case to that and the clients were very deliberately, they had their personal reasons for overinsuring so other than that 99.998% of the time, you're not overinsuring. So there's a fear there.

And I think the problem is because with most people that are buying their first term policy typically for family needs, middle income that kind of stuff, they tend to look at the wrong thing. They'll look at 500,000 or a million dollars of life insurance as a lump sum. But for most of us, we're actually replacing an income over the next 20 years if we die. So you need to just kind of rejig and say, "I need this much income for the next 20 years to get the kids out of the house." And the fact that it's a million dollars to do that is irrelevant. It's not the million dollars you're buying, you're buying $50,000 a year for 20 years. So as long as you're looking at the right thing and that's I think consumers don't a lot of the time, they'll just see the big number and say, "Well, that's a big number." But it's a big number upfront. But if you got to live off it for 20 or 25 years, it's a lot smaller number. So that's probably the biggest mistake is not buying enough.

How would you walk people through justifying how much they need?

Well, there's the long way and the short way. So I have a calculator it's called an just an income replacement calculator. So we make an assumption on if you pass away, we've from an insurance perspective we've lost your paycheck. So we determine how much of your paycheck we want to replace that your family needs to live on, we pick a timeframe 20 or 25 years and inflation and interest rate and with those four numbers you can figure out how much insurance you need to produce that income stream. So on one hand I would use the calculator but having done that calculation many, many thousands of times with most people's assumptions, using standard assumptions for interest and inflation and 60 or 80% of your paycheck, you almost always end up with between 10 and 15 times your gross income.

So if you want a long answer, it's a present value calculation of an income stream. But the short answer is that 10 to 15 times of your gross income almost always fits the bill for most people's assumptions.

Now that's really interesting. What about common mistakes with disability insurance?

Well, disability insurance actually ties in very closely to life insurance because again you're insuring your income. If you die and you lose your income as a result of death that's replaced with life insurance, disability insurance is the same thing except you don't die you become disabled. So the other difference of course is that you're the beneficiary of disability insurance because you're still alive. So it's much more immediate you're seeing, you're living off of your own paycheck.

The biggest thing with disability insurance in my opinion is to make sure you buy a platinum plan. With life insurance, a check for a million dollars is a check for a million dollars. They're all the same, they all cash the same. It doesn't matter if it's for Manulife or RBC, but with disability insurance the plans can be substantially different. And every instance I've seen of somebody who's become disabled in retrospect, they wanted the platinum gold standard plan. So that would be my baseline recommendation. Unlike with life insurance where we very much shop on price, with disability insurance you almost want to sort from most expensive to cheapest and then start deciding why you want to go with the cheaper plan, what benefits you're losing. So disability insurance is a bit of a sticker shock. It's not ever perceived as inexpensive but it is absolutely an important part of your, on the financial pyramid at the base of it one of the things you want to be looking at is insurance, protecting your paycheck and disability insurance is a big part of that.

Yeah. And as we tell clients the more expensive it is, it just reflects the risk, correct. The more expensive it is the more you can't not have it.

Well, absolutely. Well, I guess there's three reasons it's expensive. One is, because I don't think life insurance companies that I've ever seen are making a lot of money on disability insurance. It's a real tough market to make a living in. One is there's a lot of claims. Statistically I think the number is, it's... I don't recall the number it's very high, the percentage of people who become disabled before 65. So there's a lot of claims and somebody's got to pay for that. The other thing is with disability insurance, the reason it's the difference in prices are there's different features. Disability insurance tends to be more complex than life insurance.

There's conditions upon what qualifies you as a disabled, the conditions that got you disabled, under what conditions they'll pay, how much they'll pay, whether or not it's taxable or not taxable. So it's a little bit more complex and by going cheaper generally, you're cutting back on some of the more tangible things like the conditions under which you'll be paid out. So you normally want that as flexible and as all encompassing as you can possibly get. With disability insurance you don't want to end up being disabled and not able to work and a plan that doesn't cover you. That's the risk that we really want to make sure of when we're evaluating different types of policies.

I think a lot of people will settle for their group disability insurance through their employer. Do you think that's sensible for most people?

Well, I'd like to see it differently but in practice that's the way it happens. With group disability insurance you're normally required to take it as part of the plan. You're just, you got it. It is what it is. Individual plans that you'd buy through an individual broker typically are better policies. Premiums are guaranteed, the conditions under which they pay out are far better but the difficulty is if you're already paying for at work to actually buy another separate plan and you end up with double coverage, people just normally aren't willing to pay that. So technically yes, they should be buying an individual policy over the group stuff. But if you're forced to pay for the group stuff anyway, it's kind of like 80% of the way there and most people will just accept it.

Is it a bit cheaper though, to do a top-up plan? Like if I already have group because I have that, I have my own disability policy privately on top of my group. I thought there was some sort of price integration.

You can actually, you can carve out.

Again, it gets complicated. You can add on layers and stuff like that. It gets a bit complicated but in my experience I've found that again people just won't buy a second layer of coverage with long-term disability. So it's like I said, I think you're kind of if you're making up numbers, you're 80% of the way there with long-term disability insurance. I think long-term disability group plans, the workplace coverage are mildly better than they were years ago. I actually worked in the industry doing pricing of workplace benefits long time ago. And at that point the benefit plans were, they would do stuff like stop paying after two years. You become disabled they give you a check for two years. I haven't seen many of those plans around anymore. So the big problems with workplace benefits, I think had mostly gone away. But if yeah, if you've got a workplace plan where if you become disabled it only pays for two years or five years that is absolutely something you need to go out and get a rapper individual policy plan. Or if you don't have enough that might be another reason you'd get it as well.

Another type of insurance is permanent life insurance. How do you describe what it is in simple terms? And can you talk about situations where permanent insurance might make sense?

So the way I described this is... Because this is actually true, there's only one type of life insurance. The type of life insurance where you buy a million dollars of coverage and you die and I show up with a check for a million dollars. So in terms of the benefit that you're getting, the product that you're purchasing, all the different types of insurance are the same. So it's not the insurance that differentiates when they say there's different types. What differentiates the different types is how you pay the premiums over long periods of time. So it's not one type better than the other, it's how long do you want the insurance for? And if you only want it for a defined period of time after which time you don't want life insurance anymore then that would be a term policy. That's the cheapest way to solve that need.

However, if you want life insurance over the long-term, until you pass away no matter what age that is, might be age 95 then the cheapest way to solve that problem is permanent life insurance. Permanent life insurance being just simply a policy that has premiums that are level for life. So do you want to pay cheap now and no insurance later? Or do you want more expensive now but level premiums for life? It's the same insurance, you just need to kind of drill down and say, "How long do I want the insurance?" And that dictates whether or not you want permanent or not.

Can you give some examples of when somebody might want to have coverage for their whole entire life?

Yeah. Oh, There's a whole bunch of reasons. And I know some of this stuff kind of gets pooh-poohed in certain places but there are absolutely reasons why you would look at buying permanent insurance. I'll give you actually my personal example to start with, I grew up fairly... I'm not sure what the word is, we grew up below the poverty line and I just have a personal desire to leave an estate. So even though I make a good living but I'm self-employed there's some possibility, some risk that I might end up completely flat broke when I die and I'm prepared to pay money to guarantee there's an estate there for my kids. And how do I guarantee it? Life insurance guarantees it. That's one example. Some people just want to have 50 or 100 thousand dollars to leave behind to the grandkids and to bury them. That's a reasonable need. And it's typically the cheapest way to do that.

If you look at dollar for dollar, life insurance when you die is cheaper than trying to save it up yourself, either as good of a as you folks are and investing, the life insurance companies are often better than that. And another example would be, and this is very I think common North of the GTA is a, and this is an example of a permanent need. One of the permanent needs would be tax implications upon your death. Always going to be there, you always got to pay the tax man. So if you've got any sort of capital gains or tax implications upon your death, the cheapest way to pay that tax bill is by buying life insurance. Again, it's going to be cheaper to pay the insurance premiums than to actually try and save that amount of money up when you pass away.

And an example of that would be grandma and grandpa bought a cottage back in forever ago, 1950s or 60s or so for $28. And then that's kind of been in the family for the last 50 years and they want to pass that down. Well, when they both pass away, there's some tax implication there, there's some taxes that have to be paid. And I've been told that the biggest reason behind the sale of cottages in the Muskoka area, which is North of Toronto is because it's tried to pass down from one generation to the next and they don't have the money to pay the taxes. So maybe the money's there, maybe it's not but if grandma and grandpa wanted to make sure that the cottage passes down to the kids, you need to buy some permanent life insurance. It's the cheapest solution to that, problem is when they pass away the government says, "I need $200,000." You pay it, just hand over the life insurance benefits and you get to keep the cottage in the family.

Yeah. I've seen that play out with real people. And the kind of like you said, the situation is often that the cash is there but maybe one sibling has the cash and the other doesn't and the sibling with the cash doesn't want to pay the tax bill. Yeah, it can get interesting.

Yes. And the life insurance just fixes all that.

Yeah, exactly. Once someone makes a decision, so say they've decided, "Okay, I do want permanent coverage for one of the reasons that you've described." What are your thoughts on the type of permanent coverage that people should buy? Like whole life, participating, level UL?

Well, there's two general categories of permanent insurance in my opinion, these days on the marketplace and then each one has kind of a subcategory. So there's whole life which is level premiums for life with what's called the cash value, if you canceled there's some money back. The second type of policy is or category is universal life which is more of an insurance policy with an investment on the side that you can use or not. And within each of both the whole life and the universal life, there's guaranteed and nonguaranteed versions. So with the whole life if you ever see the word participating or dividends, those are typically nonguaranteed policies where different attributes of the policy can change. Sometimes it's the premium, sometimes it's the face amount. And then there's a fully guaranteed type of whole life and the same thing with universal life, there are some aspects that are nonguaranteed or you can buy and structure a universal life policy so that's fully guaranteed.

My recommendation normally for most people unless there's a compelling reason not to do this is to head towards the guaranteed version. If you're just looking for the cheapest way to get life insurance when you die, you want level premiums, everything fully guaranteed. We don't want any surprises 40 years from now when we're now 75 years old and something's gone sideways and now we're too old to fix it because what are you going to do with life insurance at 75? So whole life, universal life I shop it out normally and see which one's cheapest and compare those because those things do change over time in the marketplace. But one of those two, and I'm very a big believer unless I'm told otherwise by the client to lock everything in and get a fully guaranteed.

Interesting. Another type of insurance is critical illness insurance. I've seen a number of clients actually be paid on this. And I see a number have policies with return to premium which after I believe 15 years they've gotten large checks back. What's your take on critical illness? And should people think about it more often?

Mildly changed my views on this. I used to be fairly avidly against it. We're not in the US if you get cancer you're not going to get a rack up a half a million dollar hospital bill or something like that. So generally speaking I guess if you compare it with life insurance that's an urgent need. Disability insurance is absolutely an urgent need. You got to have that stuff looked after immediately. And then if you're so compelled you might look at critical illness insurance. Now what critical illness insurance does is, is there's about 25 or 28 different critical illnesses, they call them covered conditions. If you develop one of them they just give you a check. So it's structured not unlike life insurance except you have to live for the critical illness.

The reasons you would buy this are, and again these are less compelling. So if you have an emergency fund you can argue that you don't necessarily need critical illness. Critical illness is really handy if you don't have an emergency fund and if you develop one of those covered conditions, have a heart attack or cancer or something. You're going to be off work for six months. So there's six months of lost income. And this is something I think a lot of people miss your spouse is going to be off work for six months too, because somebody's got to drive you back and forth to the hospital, look after your chemo treatments and all that kind of stuff. So really, if you're going to look at critical illness insurance, putting aside the stuff like go to the United States and stuff. If you're planning on staying in Canada you should look at six months to a year of your income plus six months to a year of your partner's income and both of you should have that level of coverage.

Now I'm also a believer. I've got a curious instance of critical illness insurance in our family. My daughter went to school in the United States and I had to co-sign a huge loan six-figure loan to get her through school because it's very expensive down there. And because I'm in the insurance business I was concerned what if she dies or develops a critical illness insurance or becomes disabled. As a student she didn't have any money for, to justify long-term disability insurance. You need to have an income for disability insurance. So it was kind of a replacement for a disability insurance, we purchased a critical illness insurance policy on her and about a year into her schooling she developed just some mild skin cancer and the check paid out. We had 100,000 of coverage and most policies have two layers of coverage.

They have the main coverage amount of, let's say the $100,000 for most of the covered conditions. And then some of the milder cancers that are less likely to kill you there's normally a smaller amount of payout that they'll do. So we were with Manulife, they gave us for the mild skin cancer. I think it was stage T1a or something like that. They gave her a check for $25,000. So yeah, like you said Cameron, I've actually seen it pay out right within the family.

Is that what caused you to change your mind?

No, as I said, because I tend to look at this always financially where's the risk? In particular, where's the loss? So I've just kind of come to the conclusion that the loss is your income. What I don't like with critical illness sales in the insurance industry it's often well, it's almost never sold based upon loss. So if you develop cancer where's the loss? And the answer is you've lost six months of your income but that's a really boring way to convince somebody to buy a critical illness policy. It's much sexier to say and much more exciting to say, "Well, listen Ben if you get cancer, you're going to get a check for a $100,000 and you can go to the Mayo Clinic in the United States and you can take a last trip to Disney World with your family. That's not insurance. There's no loss there, you're creating wealth. That's not insurance.

But it's a much sexier way to do it. And I have a bit of a visceral reaction to those kinds of sales techniques. Even though as I said just saying, "Well, you're losing income for six months." Isn't very attractive or motivational way to sell critical illness insurance. That's where was my realization is that there's actually a loss there instead of talking about Disney vacations and trips to the United States.

Right, interesting. Yeah, because last time we spoke which was about critical illness which was probably two years ago you were very much against it so that is interesting to hear your perspectives changed a bit. I think one of the other types of insurance that are sold probably inappropriately a lot of the time is permanent insurance. So we've talked about some of the cases where you might need that but I think it's often sold as an investment. Do you think it's sensible for people to think about permanent insurance as an asset class? Or is it just protection?

No, absolutely not. There's kind of three ways you can use life insurance but they're not always appropriate for everybody. So the first and most important way for most people would be using it for insurance loss of your income. You lose your income when you die, you get a replacement paycheck through the use of life insurance. But life insurance as an asset class or an investment is absolutely, I think it might even be overlooked far too frequently as an asset class or an investment but for the right kind of people. So the real kind of the rule of thumb is before you want to start looking at life insurance as an asset class or as an investment you need to say a few things kind of rules of thumb, your RSPs and TFSAs need to be fully maxed out and perhaps a different way to say it is you need to have enough money saved for retirement already done so that you're not going to outspend yourself.

And then once you get above that point and you've got more money beyond there, now absolutely using life insurance as an asset class and the tax benefits of a life insurance policy are absolutely something you should be looking at. In fact, if you're in that situation and you haven't looked at life insurance I think you're missing out. It shouldn't be your whole or even necessarily a primary part of your investments beyond that point but the industry throws around 15 to 20%, I throw around 10 to 15%. You should be looking at that kind of thing. So in terms of using it as an asset class, what you're basically saying is I'm going to buy an insurance policy, I'm going to put these premiums into a policy that's going to give me a million dollar death benefit when I die.

That is when you die that's a million dollars in return capital. That's when you actually see the benefit of the investment as an asset class. It's fully guaranteed because it's coming from an insurance company. So it's kind of gets into those things, the performance in terms of interest rates if you look at the returns are often better than the more guaranteed types of things. So it fits in very well there as an asset class. But the drawback is, is that this stuff is not liquid and it's not very flexible once you're in, you're in which is why you don't want to be using this, any money going into an insurance policy that you might ever need. This is above and beyond.

Talk a little bit more about that because I think that when permanent insurance is sold, it's often sold on the basis of eventually you'll be able to take some money out, you'll be able to take a loan against the policy. Can you talk about the ways that you can get money out and why they're not that great?

Sure. So if you look at the type of investments that you folks would work on even say, an index fund or something like that. You put your money into a mutual fund or an RSP or something like that and it's growing. You can get that same type of investment inside say, a universal life policy. In fact, a lot of the very common types of mutual funds are actually specifically tracked inside some companies' universal life policies. So if you've got a fund you like, MacKenzie or whatever it is you could probably find that exact policy, exact fund within the confines of universal life insurance policy. But the first problem is, is that the management fees inside a universal policy are almost always far higher than they would get outside of a universal life policy. So if you can get it outside of the universal life policy it's just you're going to have more money because there's less fees. That's one of the big drawbacks to universal life policies.

The other thing that happens and particularly if it's being missold that nobody ever does a comparison, they just show you the benefits of investing in universal life policy. If they stopped and said, "Yeah, but what if we put this money in an RSP or TFSA, how would it look?" And the answer is it'll look a lot better inside a TFSA or an RSP. So again, that gets back to what we discussed earlier. That's a good rule of thumb if you haven't maxed out your RSPs and TFSAs, you're almost always going to be better off doing it inside there before you put money into a universal life plan. However, the benefit inside of universal life plan is, the growth is tax-sheltered. So it's not dissimilar to an RSP if you put the money in, if you put 100 bucks and it earned 6%, you got six dollars at the end of the year in growth. That growth is not taxed until you take it out in most cases.

So again, that's not ideal there's tax implications there, but there's two ways you can get that money out of the plan. One is die because when that investment comes out is paid out as a death benefit there's no taxes on it. So again, if you're using it as an asset class it's very tax advantaged, okay. Because you've got all that growth, you've never paid taxes on it and comes out as a death benefit, very tax advantage. And the other thing that they've been doing for about 20 years or so was called, something called insured retirement plan. There's variations on this. But again, the purpose is to get the money out of the plan without paying taxes. And what they do is you invest money inside of universal life plan, let it grow on a tax-sheltered basis. And then when you retire rather than taking the money out of the policy which will cause... You'll end up paying taxes at that point, you go down to the bank and take out a loan using the investment as collateral.

And of course the loan there's no taxes on it because it's a loan, when you die the death benefit pays off the loan. So just some tax shenanigans going on there. Again, that kind of stuff that's called insured retirement. If you've got your retirement fully looked after, you've got more money than you need to spend that type of plan is extremely advantageous. It's really something that I think a lot of people that are in that situation looking at but again if you're still maxing out your RSPs and TFSAs is not something you should be looking at, okay. So it just depends on your environment.

That's exactly the way that we always look at it, it's like well, it's what you said. If you have everything done, if you have all of your liquidity needs for retirement done and funded then in excess of that permanent insurance starts to become really interesting for the tax benefits especially as a piece of your fixed-income in your portfolio. We're getting to the, about the time limit of how long we'd like to keep these episodes Glenn, is there anything else that you think would be important for our listeners to think about in terms of insurance?

No. Well, I could talk for days but I think we've done a good coverage. We've talked about term versus permanent, when it's important to use investments versus not and as long as consumers kind of stick to those basic rules it's hard to go astray.

I'm just curious about how much time you spend on the Subreddit on Personal Finance Canada. You have a lot of activity there I know. Based on your time there, what's your observation about financial literacy in Canada?

People that are on Reddit, particularly in that Subreddit? Actually let me just back up a second because you can ID people's age by use of the word Reddit. And I maintain if you're... If you simply keeping in mind Reddit's one of the five most popular websites in the world. It is freaking huge. But if you say, "Have you ever heard of Reddit?" Everybody under 40 has heard it and everybody over 40 has never heard of Reddit. So if you heard of Reddit and you're over 40 the answer is probably no. So it's a very big website.

Well, you'll be glad to know I'm well under 40 then I guess, right?

Yes, me too. So it's really a microcosm. The people that are on that Subreddit are very financially literate, very financially astute. Most of the stuff we've discussed it today, they're already very familiar with. So I don't think it represents what most Canadians are looking like. I think most Canadians have the same problems we had 20, 30 years ago in the industry. You just got to be careful you're buying the right type of insurance and the right amount and the Subreddit, Personal Finance Canada on Reddit I don't think reflects that, they're very knowledgeable in generally speaking.