Episode: 3198
Title: HPR3198: Income Life insurance and then Chopin
Source: https://hub.hackerpublicradio.org/ccdn.php?filename=/eps/hpr3198/hpr3198.mp3
Transcribed: 2025-10-24 18:40:01

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This is Hacker Public Radio Episode 3198 for Wednesday 4 November 2020. Today's show is entitled,
Income Life Insurance and then Shopan. It is hosted by Paul Quirk
and is about 23 minutes long
and carries a clean flag. The summary is,
I talk about my thoughts on income life insurance
and then we listen to some Shopan.
This episode of HPR is brought to you by archive.org.
Support universal access to all knowledge
by heading over to archive.org forward slash donate.
Music
Good day, good listener of Hacker Public Radio
and welcome to the Paul Quirk Show.
I have been told that Hacker Public Radio needs more shows
and so my show here needs a name and the Paul Quirk Show is as good a name as any.
Think of it like the Dave Ramsey Show,
except my shows don't have religion and are licensed under the Creative Commons.
In this episode, I'm going to talk about my thoughts on income and life insurance coverage.
No, I'm not going to sell it, quite the opposite actually.
But before that, I'd like to encourage you to also contribute a show.
You see, I really enjoy listening to podcasts and podcasts can come to exist for one of two reasons.
One is that they are vehicles for products to be advertised so that a podcaster can earn an income.
I have nothing against this and enjoy a number of podcasts that use this model.
However, I prefer the alternative that someone who is passionate about a hobby or interest
wants to share it with others.
I've come to enjoy each and every podcast on Hacker Public Radio,
whether it be about restoring die-cast cars or even your take on politics in your part of the world.
I personally find the concept of recording and publishing my own podcasts here at Hacker Public Radio
to be a fulfilling and rewarding hobby.
It takes me back to the days when I was a kid with a Commodore VIC-20
and would record my own shows onto cassette tapes on my tape recorder to trade with my friends.
Did any of you do that when you were young?
It's just as fun today, ensure beats watching ad-driven, manipulative television programming.
When I listen to an episode of HPR, it takes me back to that time when me and my friends
were making shows for each other to listen to, talking about whatever we felt like
and so I consider everyone who contributes to Hacker Public Radio to be my friend.
And I'd like more people to be a part of that.
Now before I go on, I want to make it clear that I am not a financial advisor.
I was offered the job as one at Investors Group a long time ago,
but I turned it down right before I fired them from managing my finances.
I'm just an electrician who, after learning how easy it really is,
figured out the importance of taking control of my finances
because if I let someone else do it for me, they won't be looking out for my best interests necessarily.
Now I encourage everyone to take control of their own finances.
It's probably more important than brushing your teeth, eating a healthy diet
and getting enough sleep because if your own personal financial health is in order,
then things like brushing your teeth, eating a healthy diet
and getting enough sleep become a lot easier.
What I'm going to describe in this podcast are my own thoughts and ideas
which are informed from the thoughts and ideas of others.
But not to the point that you should take what I'm saying as personal investment advice.
Your situation could be different from mine,
and some of the things I'm going to discuss may or may not be beneficial for your own situation.
On the other hand, I know that everyone listening to hacker public radio
are probably at least as smart as me, and I might be preaching to the choir.
But there was a time in my own life where these ideas were foreign to me.
My reason for discussing this is because the concepts I'm about to talk about
often get overlooked or drowned out in our culture of conspicuous consumption
and mass advertising, and a lot of people are running into financial difficulties in our culture today.
And so I feel it's important to share ideas like this and to keep them alive
because even though these ideas are counter to the current culture where I live,
they have worked for a good many people for a very long time.
I'm aware that some listeners of hacker public radio live in countries
where these ideas are commonplace, but mine is a culture where concepts like
savings and personal finance have become controversial, almost taboo,
especially in light of movements like we are the 99% and the Occupy movement
in this day and age of radicalization.
So I should warn you that some might feel that this episode might get a bit political
because often discussions of finance tend towards politics,
and we are often discouraged to discuss such things,
but as you will probably figure out, I don't align with any particular political party,
which means I'll probably tick everyone off at one point or another.
To be clear, I believe we can have open discussions about these things
as long as we're respectful to people and are careful to only criticize ideas.
So I was in a Zoom meeting the other day.
This isn't something I normally use.
Given that I tend to favor open source, federated solutions like next cloud chat,
but since I could install an unofficial repack of the devian package provided by Zoom.us
and the source code for the snap was available at GitHub,
plus the fact that I didn't need to register with Zoom to have this meeting,
I was okay with it.
This meeting was with an insurance agent from an income life insurance company
purporting to be affiliated with my union.
Even though my union local uses a completely different insurance company,
not affiliated with this income life company for my benefits,
this set off the first red flag for me.
What they were advertising to me were, quote, permanent benefits
as opposed to, quote, temporary benefits provided to me by my union.
So if I were ever foolish enough to leave my union,
I would no longer enjoy my benefits, which should not come as a surprise to anyone.
The agent suggested that my benefits may end if I get laid off or after retirement,
even though I knew this was not the case, which was another big red flag.
I was prepared with details about my coverage provided to me by my union,
which is more than adequate for me and my family.
Nevertheless, the agent did her best to make my regular life
and accident insurance coverage out to be inadequate,
and their insurance product would make up for that.
The agent, who was a wonderful person to have a conversation with,
spent some time going over their no-cost will service,
which is actually just a basic boilerplate template web service,
much like many other free will services available on the web at sites like lawdipo.ca.
Please note that I do not endorse lawdipo.ca.
I actually prefer talking to a lawyer for things like my will.
I mention it here simply as an example to illustrate my point.
They also went over there, Family Information Guide,
which is a document where one can fill in the blanks
to provide information like the location of my last will and testament,
estate information, financial institution information,
and other relevant personal information that someone would need
in the event of my death.
This is thoughtful, but not something I overlooked.
Since selling fear is their main marketing tactic,
they also threw in a McGruff Safe Kids ID Kit
in the agent went over that very thoroughly,
even though I indicated to her at the onset that my child was 21 years old
and we had no need for such a kit,
which I feel only serves to induce unnecessary fear
that leads to parents driving their kids to blocks to take them to school,
helping to drive up obesity and depression rates,
which are now epidemic in my culture.
Let our kids go outside and walk to school.
Have them make friends to walk to school with.
Their world will become a much better place.
Previers of fear always set off a red flag for me.
I don't blame the agent as she had been trained to follow a script
based on concepts found to have worked by her employer.
So now I should explain my problem with additional insurance.
The cost of the coverage they were selling me amounts to roughly $33 per week.
Now, this doesn't sound like much,
but consider that there are 52 weeks in a year,
so that adds up to $1,716 per year.
Suppose I live for another 30 years.
This will amount to a total of $51,480 over my life.
This is how much I would have if I just put $33 per week into a cookie jar for 30 years.
Now, the difference between putting $33 a week into a cookie jar
versus giving it to an income life insurance company
is that there are no terms and conditions on the money I put in the cookie jar.
Before I give even a dollar to this income life insurance company,
I would be required to sign a multi-page document,
likely in small print, agreeing to terms and conditions.
The purpose of this contract is to allow them to keep my money
and never have to pay it back to me except under very strict conditions.
For example, if I committed suicide, they would not need to pay out.
What if I was murdered, but it was made out to look like a suicide?
What if I had an accident at work or home that looked like a suicide, but really wasn't?
Mistakes like that happen all the time.
What if I am suffering intolerably and wish to end my life with dignity?
This is not a right I would want to sign away.
In short, by signing their document, I am agreeing to just give this income life insurance company my money
and am agreeing that they may never need to pay that money back.
I could have a pre-existing medical condition that I am unaware of
that could make me ineligible and this is a surprise that bites many people later in life.
Even under regular non-life ending conditions, their benefits are made to coordinate with the benefits I already have.
So that means the coverage I already have gets used first.
Now, it's not a bad idea to have a backup plan, but I'm a do it yourselfer.
Allow me to explain how I can do with my money the exact same thing
an income life insurance company will do with my money to make it grow, but purely for my own benefit.
Now, as I said, on the surface, that $33 per week doesn't seem like much, but as I already pointed out, it can really add up.
It can also grow, thanks to the magic of compound interest.
That magic happens when you realize you can make interest on interest.
If you do an internet search for a compound interest calculator, there are plenty to choose from, and they all do pretty much the same thing.
So, let's suppose I invested $33 per week in an investment that will earn 5%.
We will compound that interest annually for 30 years.
Most compound interest calculators do not resolve to a weekly level, so we'll go with 12 equal monthly payments of $143, which is what $33 per week would work out to.
After 30 years, that works out to $114,000 in $9.06, which is more than double what it would be if I just left it in a cookie jar.
It can get better than that.
If the interest is compounded monthly, the amount after 30 years goes up to $119,000 in $12.98.
If your money made 1% more, the amount at 6% over 30 years will come to $143,645.75.
At 7%, we're closing in at nearly $175,000, so depending on the interest rates, I could have my own policy that pays out more than I would get with an income life insurance company without any of their conditions.
Now at this point, I'm certain that some of you are thinking I'm out to lunch on those interest rates because nobody is going to give you 5% on $33.
I am aware that many financial institutions and even my own credit union requires a minimum amount of $5,000 before they can move it into things like index funds.
This goes back to the cookie jar fund.
I think if I didn't have at least $5,000 to my name to invest in my future, I'm just going to put that $33 per week into a savings account.
Even if that savings account earns little to no interest, I know that after three short years, I'm going to have enough.
Now some people might think that three years is an awful long time, but I suggest thinking back to something that happened in your life three years ago, and you will see that in hindsight,
three years really isn't not that long at all.
And if some big expense were to come up during that time, at least you'll have some savings to cover that expense which could turn a potential financial disaster where you could lose everything into just a minor nuisance.
Now here's the other issue that can be easy to overlook.
What if you suddenly don't have money to pay them there $33 per week?
Suppose that after 10 years, we're all in a big recession and that I don't have $33 per week to spare because I need to pay my bills.
I'm pretty sure if I missed a payment or two, there would be no policy anymore.
Now suppose I had been putting $33 a week into an investment that earned 5% interest compounded annually.
If I could no longer contribute to that investment, I don't lose it.
The money will continue to grow for the next 20 years so that 20 years after I stop paying into it, I will still have made around $57,000 which means I can make more investing the money over 10 years and then not contribute any more for the next 20 than I would simply just putting the money into a cookie jar for 30 years, which really illustrates the power of compound interest.
On top of that, I have another option. If times are really tough, I still have access to that money after 10 years, at which point could be worth around $21,000.
That might just be enough money to get me out of a tight financial position during bad times and let me keep my house until things get better.
The thing is saving the money myself gives me unlimited options and I'm not bound to the terms and conditions of an income life insurance company where I might need to be injured or killed to maybe get some of my money back.
There is one other thing to consider. Suppose I put that $33 per week into an RRSP.
I claim those RRSP contributions at tax time reducing my income tax burden.
I'm fairly certain I wouldn't be allowed to deduct my payments to an income life company.
This can be an important consideration because it may make the difference between owing the Canada revenue agency money and getting money back from them next spring.
Reinvesting that money is an excellent strategy to help that investment grow even more.
Now don't get me wrong, I'm not entirely against insurance. I completely understand the value of insurance as part of an overall strategy for young people starting out in life, starting a new family with little to no equity to invest in the first place.
Also, it's unlikely anyone is going to be making very much interest at all on anything less than $5,000, so it may take a couple of years or longer to save up enough money to make worthwhile investments.
However, we need to bear in mind that there is no mechanism inherent to the insurance industry to keep us from being overinsured.
It's a business model designed to extract as much money as possible while delivering very little in return.
And so I believe we are wise to wean ourselves off of insurance as we get older and as we turn to investments of our own making to provide us with the financial security that we may need.
Such a decision could lead to making dreams like an early retirement, enjoying time off between jobs without financial pressures or pursuing a career in the arts reality, which are definitely not things any insurance company would be willing to do for you.
And now here we are towards the end of the show and as is customary with my podcasts, I'm going to interject a little bit of creative comments music.
And once again, we're going to listen to one of my favorite composers, Frederick Chopin.
This is Chopin Grand Vals Briliante in E flat major, opera 18.
Frederick Chopin composed this waltz.
It's also known as Grand Vals Briliante in 1833.
It was published on the following year, being his first published waltz solo piano, although he had previously written a number of waltzes that were either destroyed or published post humanistly.
The title Grand Vals Briliante was also given by Chopin to his waltzes opera 34, though in practice it is usually used in reference to opera 18.
Many composers, including Stravinsky and Britain, have created orchestrations of this piece.
And so please enjoy this.
Thank you very much.
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Well, that's it for this episode of the Paul Quirk Show here on HPR.
I hope you enjoyed it, and if you haven't recorded a show for HPR yet, I encourage you to do so.
I'm going to try to keep on making shows.
If you want to get in touch with me, you can find me on the Fediverse at palatcloud.pquirk.com.
Until next time, this is Paul Quirk, signing off from Hacker Public Radio.
Please remember to drive safe and have fun.
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