The following is an example illustration supplied to me by a certified financial planner who represents one of the 35 insurance companies that offer Insurance s. Don't get hung up by the numbers, because every illustration is unique, relative to variables such as age, gender, smoking status, interest rates, etc. The purpose of this example is just to show the effect of the TAX-DEFERRED income that can be generated from these plans. Your financial planner can generate a personalized illustration for you:

EXAMPLE: This illustration assumes you deposit $13,500 annually into the plan for 18 years and then start to take a TAX.. FREE bank loan starting in the 24th year. The lending institution would extend annual TAX..FREE loans to you of $78,905 adjusted annually for a 2% cost of living adjustment for the next 31 years.

By contrast, if you attempted the same thing with an RRSP, depositing $13,500 for 18 years and then took the same level of after"tax income starting in the 24th year, you would exhaust your RRSP in as little as 9 years.

That's the , impact of TAX-DEFERRED income in retirement. Plus with the Insurance, since you had no taxable income, you still qualify for the maximum Old Age Security payments. Now if we examine what would happen if we used a non tax, sheltered investment, the effect is even more staggering. Using the exact same assumptions of deposits, rate of return and income at retirement, a fully taxed investment would be exhausted in slightly less than 5 years. That's because it does not enjoy the tax-sheltered growth of either an Insurance or an RRSP.