How Whole Life Creates the Perfect Volatility Buffer for Your Portfolio
What This Covers
This session dives into how Whole Life Insurance can be used as a “volatility buffer”, a financial safety net, during market downturns, particularly in retirement. Real estate and stock market examples are used to highlight risk, while a simulated case study with Truth Concepts calculators shows how tapping policy cash values at key moments preserves long-term income.
Why Clients Use It
To avoid selling assets at a loss during market crashes
To ensure consistent retirement income regardless of market volatility
To fund policies in retirement using flexible income streams like CPP, OAS, or family repayments
To build resilience into their portfolio by controlling the timing of withdrawals
Key Insights by Timestamp
(00:00–05:30) Real Estate ≠ Risk-Free
Personal story: two investment properties in Alberta that lost significant value
Highlights how even well-understood investments like real estate are subject to volatility
Emphasizes missed opportunity: if those funds had gone into Whole Life, the capital would have been intact
(06:00–07:00) Lessons from Experience
Mentions mentorship and past coaching sessions (like Bob Shields):
“Don’t be an idiot like Bob—learn from our mistakes.”
(07:00–11:00) Introducing the Volatility Buffer Concept
Imagine needing cash during a market crash (e.g. stock or real estate)
If instead you draw from a Whole Life policy, your investments have time to recover
Demonstrated using a scenario:
$1M market account
25-year retirement
Shows how small market losses during withdrawal years drastically shorten your retirement income
(11:30–16:00) Strategic Use of Whole Life During Loss Years
When using policy loans instead of selling assets in bad years:
You extend retirement income by several years
Avoid the “double pain” of asset loss + withdrawals
Removes pressure to time markets or sell low
(16:00–22:00) Real-Life Examples & Lessons from Nelson
Special assessments and rental vacancies are real risks
Nelson’s mindset:
Use the policy when times are bad; replenish when times are good.Builds financial stability and protects from the unexpected
(23:00–29:30) Retirement Income Planning: Stacking the Buckets
CPP + OAS only provide ~$35K/year (combined for two people)
Add rental income, private lending, car repayments from kids, etc.
Every income stream reduces pressure on market-based withdrawals
Policy can fill the gap when other income is low
(31:00–34:00) Think Creatively About Income Streams
Turo (renting out cars), Airbnb, paddleboard rentals, e-commerce
Unlock hidden cash flow potential from assets already owned
The key: multiple buckets = financial control
(36:00–38:30) Keep Paying Premiums As Long As Possible
Fund premiums in retirement using government benefits
Dan’s example: $3,750 premium = $20K in cash value
Nelson’s wisdom:
Ask “how long can I pay premium?” not “when should I stop?”Creates options, builds future value, and keeps your system strong
Core Message
Using a Whole Life policy as a strategic buffer, especially during market downturns, preserves your wealth, smooths out income volatility, and unlocks creative ways to fund retirement. It’s not just about insurance; it’s about gaining control over when and where you access capital.