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FP Answers: Is whole life insurance a good investment? If so, in what circumstances?



If you have a large or complicated estate, it pays to take a look at insurance, experts say

By Julie Cazzin and Allan Norman

Q: “My wife and I are both 50 and have two kids. Our household income is about $200,000 a year, evenly split between my wife and I. I’d like to leave a large inheritance to my two kids. Is it ever a good idea to buy a whole life insurance policy as an investment vehicle? Why or why not? And if not, what would be a better option? — Alejandro

FP Answers: Whole life insurance can be a controversial product, but its two main features, tax-sheltered growth, and a tax-free death benefit, make it worth considering when you’re doing estate planning, or when looking for another tax shelter after maximizing your registered retirement savings plans (RRSPs) and tax-free savings accounts (TFSAs).

Integrating whole life insurance into a plan is unique to everyone and there are many different ways to leverage the value of a policy, but that’s a topic for a different article. Your questions here are whether whole life insurance is a good investment and what are the alternatives if you want to leave a large inheritance to your children?

In the accompanying table, I’ve summarized the projections of a $1-million, joint last-to-die, whole life policy with a monthly premium of $1,850. With your expressed interest in inheritance, focus on the figures in the death benefit column. Notice the longer you live, the lower the projected return.

At year 40, or when both you and your wife turn age 90, the whole life policy is projected to give you an average annual after-tax return of 4.8 percent. Keep in mind this is not guaranteed. The projected values and returns will be different, but the results shown are based on current rates.

By comparison, current five-year guaranteed investment certificates (GIC) rates are sitting at five per cent. Forgetting tax for a minute, investing the $1,850 monthly premium into a GIC over 40 years will grow to $2,755,651. If you factor in a marginal tax rate of 40 per cent, the GIC investment would only grow to $1,701,891, about $1 million less than insurance. Does that make whole life insurance a good investment?

Conservative, or GIC investors, may see insurance as a good investment while aggressive equity investors may not. Equity investors have the option of trying to enhance their returns on whole life by setting up a line of credit against the policy’s cash value once it reaches about $50,000, and investing the borrowed money into the stock market.

Sometimes, there isn’t an alternative to whole life for inheritance purposes, or it takes time to create an alternative. What insurance, term or whole life, excels at is providing an immediate estate value — or inheritance value — for your children. I don’t know of any alternatives that can do that.

You can create alternatives to whole life insurance if you have the time and the ability to save and invest money. These alternatives combine term insurance with investment and/or debt-reducing strategies. Term insurance is put in place to provide the immediate estate value and buy you time to grow your investments to the point where the insurance is no longer required.

Probably the best investment for estate planning purposes are tax-free savings accounts (TFSAs), which provide tax-free growth, avoid probate with a named beneficiary and pass to your children essentially tax free. The equity in your principal residence is another tremendous tax shelter that can be passed onto your kids minus any provincial probate fees.

There is always a risk when creating alternatives that by combining term and investing strategy you won’t save enough, you’ll spend your money yourselves, the markets may crash the day you die, you have a new spouse later in life and so forth. Insurance is called insurance for a reason.

Another alternative to consider is gifting money to your children before you die. You can add money to their registered retirement savings plans (RRSPs), TFSAs, registered education savings plans (RESPs), mortgages or simply take them on family vacations.

Decide what’s important to you about leaving money to your children when you die. What benefits would come to you and your children if you gifted them money earlier in their lives?

Whole life insurance can also be used as an investment vehicle to create and maintain an estate’s value. But I find that its tax advantages more often make it more useful once a large estate has been created through investing, multiple real estate holdings, corporate success, farming and other investments. If you have a large or complicated estate, it pays to take a look at insurance.

Allan Norman provides fee only certified financial planning services through Atlantis Financial Inc. Allan is also registered as an investment advisor with Aligned Capital Partners Inc. He can be reached at or This commentary is provided as a general source of information and is not intended to be personalized investment advice.

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    Investment regulator imposed $14M in enforcement penalties in latest fiscal year



    TORONTO — Canada’s investment product regulator says it imposed more than $14 million in fines and other financial enforcements in its last fiscal year.

    The Canadian Investment Regulatory Organization (CIRO) says the total also includes imposed costs and the forced return of ill-gotten profits.

    The regulator says it also ordered suspensions and permanent prohibitions in a significant proportion of proceedings against individuals.

    Enforcement efforts included a $2 million fine against Fortrade Canada for recommending a high-risk product to unsophisticated retail clients, and a $1.7 million fine and permanent ban on securities-related business against Paul Walker for a range of misconduct including soliciting more than $1.5 million in investments for an outside business activity.

    CIRO was created at the start of 2023 through a combination of the Investment Industry Regulatory Organization of Canada and the Mutual Fund Dealers Association of Canada.

    The new self-regulatory organization says it is focused on harmonizing its regulatory approach to create more consistency and timeliness with enforcement action.

    This report by The Canadian Press was first published July 16, 2024.

    The Canadian Press



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    Conditions on Simandou investment now satisfied



    LONDON, July 15, 2024–(BUSINESS WIRE)–All conditions have now been satisfied for Rio Tinto’s investment to develop the Simandou high-grade iron ore deposit in Guinea, including the completion of necessary Guinean and Chinese regulatory approvals. The transaction is expected to complete during the week of 15 July 2024.

    Along with the recent approval by the Board of Simfer1, this allows Simfer to invest in and fund its share of co-developed rail and port infrastructure being progressed in partnership with Winning Consortium Simandou2 (WCS), Baowu and the Republic of Guinea.

    More than 600 kilometres of new multi-use trans-Guinean railway together with port facilities will allow the export of up to 120 million tonnes per year of mined iron ore by Simfer and WCS from their respective Simandou mining concessions in the southeast of the country3. Together, this will be the largest greenfield integrated mine and infrastructure investment in Africa.

    Rio Tinto Executive Committee lead for Guinea and Copper Chief Executive Bold Baatar said: “We thank the Government of Guinea, Chinalco, Baowu and WCS for their partnership in reaching this milestone towards developing the world class Simandou project.

    “Simandou will deliver a significant new source of high-grade iron ore that will strengthen Rio Tinto’s portfolio for the decarbonisation of the steel industry, along with trans-Guinean rail and port infrastructure that can make a significant contribution to the country’s economic development.”

    Under the terms of the transaction, Simfer will acquire a participation in the WCS project companies constructing rail and port infrastructure, commit to perform a portion of the construction works itself and commit to funding its share of the overall co-developed infrastructure cost, in an aggregate amount of approximately $6.5 billion (Rio Tinto share approximately $3.5 billion)4.

    Chalco Iron Ore Holdings Ltd (CIOH) has now paid its share of capital expenditures incurred or required by Simfer to progress critical works up to completion. A first payment of approximately $410 million, for expenditures until the end of 2023, was made on 28 June 2024, and a second payment of approximately $575 million, for 2024 expenditures, was made on 11 July 2024. These amounts settle all expenditures incurred up to date.

    The co-developed infrastructure capacity and associated cost will be shared equally between Simfer, which will develop, own and operate a 60 million tonne per year5 mine in blocks 3 and 4 of the Simandou Project, and WCS, which is developing blocks 1 and 2.

    Under the co-development arrangement, Simfer and WCS will deliver separate infrastructure scopes to leverage expertise. Simfer will construct the approximately 70 kilometre Simfer spur rail line and a 60 million tonne per year transhipment vessel (TSV) port, while WCS will construct the dual track approximately 536 kilometre main rail line, the approximately 16 kilometre WCS spur rail line and a 60 million tonne per year barge port.

    Once complete, all co-developed infrastructure and rolling stock will be transferred to and operated by the Compagnie du Transguinéen (CTG) joint venture, in which Simfer and WCS each hold a 42.5% equity stake and the Guinean State a 15% equity stake6.

    First production from the Simfer mine is expected in 2025, ramping up over 30 months to an annualised capacity of 60 million tonnes per year5 (27 million tonnes Rio Tinto share). The mine will initially deliver a single fines product before transitioning to a dual fines product of blast furnace and direct reduction ready ore.

    Simfer’s capital funding requirement for the Simandou project as a whole is estimated to be approximately $11.6 billion, of which Rio Tinto’s share is approximately $6.2 billion, broken down as follows.

    US dollars in billions (nominal terms) Simfer


      Rio Tinto
    Mine and TSVs, owned and operated by Simfer
    Development of an initial 60Mt/a mine at Simandou South (blocks 3 & 4), to be constructed by Simfer $5.1 $2.7
    Co-developed infrastructure, owned and operated by CTG once complete
    Simfer scope (funded 100% by Simfer during construction)

    Rail: a 70 km rail-spur from Simfer mine to the mainline, including rolling stock
    Port: construction of a 60Mt/a TSV port

    $3.5 $1.9
    WCS scope (funded 34% by Simfer during construction)

    Port and rail infrastructure including an approximately 552 km trans-Guinean heavy haul rail system, comprised of a 536 km mainline and a 16 km WCS rail spur

    $3.0 $1.6
    Total capital expenditure (nominal terms) $11.6 $6.27

    Rio Tinto’s share of expected capital investment remaining to be spent from 1 January 2024 is to be $5.7 billion. Rio Tinto’s expected funding requirements for 2024 and 2025 are included in its share of capital investment guidance for this period, with project funding expected to extend beyond this timeframe.

    Further details on the Simandou project can be found in the 2023 Investor Seminar presentation at

    As Chinalco, Baowu, China Rail Construction Corporation and China Harbour Engineering Company are Chinese state-owned entities, and given Chinalco indirectly holds 11.2% of shares in the Rio Tinto Group, they, and WCS, may be considered to be associates of a related party of Rio Tinto for the purpose of the UK Listing Rules. Rio Tinto’s funding commitment pursuant to the infrastructure co-development arrangement (Rio Tinto share $3.5bn) is a smaller related party transaction for the purposes of Listing Rule 11.1.10R and this announcement is, therefore, made in accordance with Listing Rule 11.1.10R(2)(c).

    1 Approval has been granted by the Board of Simfer Jersey Limited, a joint venture between the Rio Tinto Group (53%) and Chalco Iron Ore Holdings Ltd (CIOH) (47%), a Chinalco-led joint venture of leading Chinese SOEs (Chinalco (75%), Baowu (20%), China Rail Construction Corporation (2.5%) and China Harbour Engineering Company (2.5%)). Simfer Infraco Guinée S.A.U. will deliver Simfer Jersey’s scope of the co-developed rail and port infrastructure, and is, on the date of this notice, a wholly-owned indirect subsidiary of Simfer Jersey Limited, but will be co-owned by the Guinean State (15%) after closing of the co-development arrangements. Simfer S.A. is the holder of the mining concession covering Simandou Blocks 3 & 4, and is owned by the Guinean State (15%) and Simfer Jersey Limited (85%).
    2 WCS is the holder of Simandou North Blocks 1 & 2 (with the Government of Guinea holding a 15% interest in the mining vehicle and WCS holding 85%) and associated infrastructure. WCS was originally held by WCS Holdings, a consortium of Singaporean company, Winning International Group (50%) and Weiqiao Aluminium (part of the China Hongqiao Group) (50%). On 19 June 2024, Baowu Resources completed the acquisition of a 49% share of WCS mine and infrastructure projects with WCS Holdings holding the remaining 51%. In the case of the mine, Baowu also has an option to increase to 51% during operations. After Closing, Simfer will hold 34% of the shares in the WCS infrastructure entities during construction with WCS holding the remaining 66%.
    3 WCS holds the mining concession for Blocks 1 and 2, while Simfer S.A. holds the mining concession for blocks 3 and 4. Simfer and WCS will independently develop their mines.
    4 A true-up mechanism will apply between Simfer and WCS to equalise most of their costs of constructing the co-developed rail and port infrastructure. The figures shown here are pre-equalisation.
    5 The estimated annualised capacity of approximately 60 million dry tonnes per annum iron ore for the Simandou life of mine schedule was previously reported in a release to the Australian Securities Exchange dated 6 December 2023 titled “Simandou iron ore project update“. Rio Tinto confirms that all material assumptions underpinning that production target continue to apply and have not materially changed.
    6 Ownership of the rail and port infrastructure will transfer from CTG to the Guinean State after a 35 year Operations Period, with Simfer retaining access rights on a non-discriminatory basis and at least equivalent to all Third Party Users.
    7 By the end of 2023, Rio Tinto spent $0.5 billion (Rio Tinto share) to progress critical path works. Rio Tinto’s share of expected capital investment remaining to be spent from 1 January 2024 was $5.7 billion.

    This announcement is authorised for release to the market by Andy Hodges, Rio Tinto’s Group Company Secretary.

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    BlackRock Pulls Ad Featuring Trump Rally Shooter Thomas Matthew Crooks



    A screengrab of Thomas Crooks from the BlackRock ad that aired in 2022.

    Thomas Matthew Crooks, the 20-year-old who shot at former president Donald Trump at a rally in Pennsylvania, had briefly appeared in a 2022 advertisement for BlackRock Inc, the world’s largest money manager.

    The ad, filmed at the Bethel Park High School in Pennsylvania, featured Crooks and several other unpaid students in the background, said the investment giant in a statement. Crooks graduated from the school in 2022.

    BlackRock said it has pulled the ad but the video will be available to authorities. The ad, however, is being widely shared by social media users.

    “The assassination attempt on former President Trump is abhorrent. We’re thankful former President Trump wasn’t seriously injured, and thinking about all the innocent bystanders and victims of this awful act, especially the person who was killed,” the company added in its statement.

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    BlackRock, whose earnings figures are expected today, has faced scrutiny after shooting incidents since some of its index funds own shares in gunmakers.

    Trump Assassination Attempt

    Trump survived an assassination attempt on Saturday after a gunman opened fire at him at a rally in Pennsylvania ahead of the Presidential elections. The attack left him with a bloodied face as the former president said the bullet pierced his “upper part of right ear”.

    Latest and Breaking News on NDTV

    A bystander died in the attack while shielding his family and Crooks – a registered Republican – was shot dead by a Secret Service sniper.

    Trump, whose Republican candidature will be finalised today, shared a message of unity after the attack and said Americans must not allow “evil to win”. “It was God alone who prevented the unthinkable from happening,” he said on social media.

    Biden, too, appealed to the nation to “lower the political temperature” in a rare Oval Office address. “Politics must never be a literal battlefield, God forbid a killing field,” he said.

    The US markets are expecting Trump trades to gain momentum after the attack. It has already been pinning hopes for the return of Republicans, especially after Biden’s poor performance in last month’s debate. Those trades are likely to take deeper hold as the attack sparks a wave of sympathy and support for Trump.


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