Skip to content

Safe Pacific Financial

How Business Owners can use Life Insurance to fund Major Purchases

When we talk about leveraging life insurance, we talk a lot about business owners and why this type of strategy is useful for them.

Today we’re going to provide an example of how one business owner that we worked with used this strategy to help fund three different projects in his life.

We’re going to cover how he used his Whole Life Insurance Policy to fund upgrades to his business, renovations to his new home, and his retirement.

When we’re talking about business owners holding this type of permanent insurance in their company, what they’re doing is growing their money inside of the policy and then they’re leveraging the value of the cash in their policy from the bank or the insurance company.

What they use this money for, will probably change over time, so you might be doing ABC in 5 years and then you might be doing DEF in 20 years.

Upgrading the Business

Our example is of a client who has multiple policies with us and he owns a machine shop.

He puts roughly 100 thousand a year into his various policies and has been doing this for a while now, he also already has a line of credit set up at the bank.

He has a manufacturing facility where they build specialized things out of metal, and he was able to use his policy to take out a loan to rebuild his entire shop.

What he was able to do is finance the whole thing himself without really asking anybody for permission, without getting a credit check, and without having to prove anything.

Because with these policies we do all the work upfront, it’s simple and easy when it comes time to access that money.

Renovations to a New Home

This business owner also moved a few years ago, and he moved into a nice, but older house and needed a couple hundred grand to complete the renovations.

Tt the time the Vancouver Real estate market had huge highs, so he had already leveraged himself about as much as any mortgage would give him to purchase the home.

So, there wasn’t any extra money for the renovations that he wanted so he said, “That’s fine, I have this insurance policy and I have a line-of-credit already set up” and he funded a couple hundred thousand dollars of renovations on the house.

Also, when you're lending against your insurance policy, you’re usually doing it through private or commercial banking, you’re not doing it at a teller level, your doing it at a higher level.

When you’re dealing with a different level of the bank, they have way more flexibility on how they give you the loans, how they structure them, and the amount you’re able to get.

Usually this means bigger numbers and that’s because with private or commercial banking they’re able to consider your entire picture.

They can see well these are your assets, you have this money in savings, you have this life insurance policy, but maybe you’re a business owner so you don’t have a huge income.

You could if you wanted to, but most business owners don’t have a giant T4 or T1 so traditional mortgage brokers or bankers won’t be able to get you a loan because you don’t claim enough.

Whereas if you're working with private or commercial bankers, they look at your whole picture and they see, obviously you could carry the debt.

Funding Retirement

The last thing our client was able to do was fund his Retirement.

He was an older guy, not very old, but he’s looking at retirement and when it comes around, he will have probably paid off all the loans he’s taken out against his policies.

He has a portfolio that’s going to generate his standard retirement savings and then he’s going to supplement his retirement by taking loans against his policy.

What’s even more beneficial is if these loans are done correctly they should be mostly tax free.

Contact Us

At Safe Pacific Financial, we specialize in helping Canadian business owners, incorporated professionals, and investors structure life insurance for maximum wealth protection, tax savings, and business growth.

If you would like to discuss whole life insurance or investments,  we’re happy to chat and see if we can be a good fit to work with you. Fill out our contact form and we will get back to you within 24 hours on business days.

Related Insights

Insurance
4 min read
Wealth and Legacy: A Deep Dive with Vince Cardella

In this episode of The Wealth Multiplier Podcast, host Laurent Munier of Safe Pacific Financial sits down with Vince Cardella, Principal of Strategic Wealth Planning...

Read More
Investing
16 min read
RRSPs for Canadian Business Owners, should you invest?

You have two main options: keep the funds inside the corporation or withdraw and invest personally. Today we’re going to go through these 2 scenarios...

Read More
Insurance
6 min read
Leveraging Your Whole Life Insurance Policy as Collateral for Loans in Canada

When it comes to building financial security and achieving your goals, creativity and strategy are essential. Today, we’re exploring a powerful tool that can open...

Read More
Infinite Banking
10 min read
The 6 Essential Principles of the Infinite Banking Concept Explained

Here’s what you aren’t understanding about Infinite Banking. Building anything of lasting value begins with a solid foundation—the basics. While Infinite Banking may seem like...

Read More
Insurance
13 min read
The Capital Dividend Account: A Comprehensive Guide for Business Owners

Why does it exist, and how does it work? Let’s break down the essentials of this game-changing tax provision called the CDA We at Safe...

Read More
News and Events
4 min read
Merry Christmas – Safe Pacific 2024 Highlights

We’ve been advising Canadians about life insurance and their personal finances for over a decade, almost 15 years now. But today’s video is a little...

Read More
News and Events
1 min read
Christmas Party 2024 Photo Gallery

Thanks to all who came out to celebrate the season at our annual Christmas Party. We hope you all enjoyed the festivities at The Vancouver...

Read More
Insurance
4 min read
Interview with the Head of Individual Insurance Business at Equitable Life: Martin Reeves

Equitable Life has long been a trusted name in the Canadian insurance landscape. Recently, we had the privilege of sitting down with Martin Reeves, Head...

Read More
Infinite Banking
6 min read
The Infinite Banking Strategy for Canadian Business Owners: How It Works and Why It’s Effective

Growth has rocketed especially since the federal government has been increasing taxes on everything – especially you and me, the greedy business owners who make...

Read More
Infinite Banking
6 min read
Top 5 Ways Infinite Banking Benefits Canadians

Now, this isn’t just some financial theory for us. I've been using this strategy personally and we’ve been setting it up for our clients for...

Read More
Investing
15 min read
Are TFSAs good for small business owners?

One of the main tax advantaged accounts you can use in Canada is the TFSA – Tax Free Savings Account. This is one of our...

Read More
Insurance
8 min read
Family Office vs. Multi-Family Office: Key Differences, Benefits, and Which is Right for You

Now obviously, every family office is going to be different from family to family, however there is an important distinction between a single-family office and...

Read More
A Logo
A Logo
A Logo
A Logo

Stay Connected

By submitting your email you confirm that you agree with our Terms and Conditions.

© 2025 Safe Pacific Financial Inc. All rights reserved.
Design by Takt