as they plan to protect their business.
May. 16, 2025 15 min read
George, 52, and Derek, 38, have lived in the same neighborhood for more than a decade.
At a Canada Day barbecue a few years ago, they discovered they were both entrepreneurs at heart and shared a passion for landscaping.
Their conversation started when they both began critiquing another neighbour’s lawn. George confessed, “One of my first summer jobs was mowing lawns”. Derek replied, “No kidding, me too”. They both noted they really loved working outdoors. Derek said, “It’s too bad my career doesn’t give me that opportunity.”
George mentioned that his dad had owned his own business, but that he’d never had the courage to make the leap himself. Derek added that he felt like his present job wasn’t fulfilling enough, and that he’d welcome a change.
A few weeks after their conversation, they started investigating if there were any opportunities to purchase a small business. They discovered a landscaping company up for sale and they each invested the same amount of money, becoming equal partners.
As part of their new venture they decided to purchase insurance for their business. George and Derek are making sure that if either of them dies before they retire, their financial priority is to ensure the necessary funds are available to buy out the deceased business partner’s share of the company.
In addition, they both have families and want to help take care of them financially.
George noted with some concern,
Derek added, “Right now my spouse is at home taking care of our 2 small children, so their financial security is really important to me.”
After a needs analysis, George and Derek’s advisor recommends they each purchase a Canada Life My Term™ life insurance policy along with a a 15-year Business Growth Protection additional benefit, which they can exercise as the value of the business increases over time. This means they can increase coverage with no medical or lifestyle evidence.
For George: A Canada Life My Term life insurance policy with a coverage length of 18 years for $1 million with a $500,000, 15-year Business Growth Protection additional benefit. For Derek: Canada Life My Term life insurance policy with a coverage length of 32 years for $1 million with a $500,000, 15-year Business Growth Protection Rider.
With typical term life insurance, the advisor may have suggested a term 20 policy for both George and Derek.
For George, this would have meant paying higher premiums for a longer term than is required.
For Derek, at age 38, and still in need of insurance in 20 years, he may have had to let the Term 20 renew at a higher premium or cancel it and apply for a new Term 10 policy. Then he would need to again provide evidence of insurability and answer medical questions.
Canada Life My Term provides the business partners with a flexible solution that is designed to help meet both of their needs.
Further, if they need to extend their coverage after the end of their terms, they can take advantage of Canada Life’s yearly renewable term (YRT) structure which significantly lowers the initial renewal cost.
How do George and Derek feel knowing their families and their business is now protected? George says, “When you’re running a business, there are enough things to worry about.” Derek adds,
The above example is for illustrative purposes only. Situations will vary according to specific circumstances.
The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.