Universal Life Insurance Canada

Universal Life Insurance Universal life insurance is a hybrid product that builds up a cash value very quickly, and has both a conventional term policy along with cash values and investments. It is also less rigid compared to whole life insurance.

The premiums and death benefit (i.e. face value) of universal life insurance are flexible, and you can adjust them (within policy limits) depending on your current situation. It is important to note that the flexibility of a universal life policy is dependent on the insurance company and the plan type. One common requirement to all universal plans is that a minimum face value is required.

The savings and investment is segregated from the term policy, and occur on a tax-deferred basis. Payments are made by deposits (usually monthly or annually), and any excess after the premium is paid is applied to a saving account, which is made up of an investment mix which you choose, depending on your situation and possibly the advice of an advisor.

More points to consider about universal life are:

  1. A universal life policy will have its cash value tied to shorter-term interest rates as compared to whole life policy.
  2. The rate of return on a universal insurance policy has the potential to be greater than that from a whole life policy.
  3. The cash value grows faster than a whole life policy.
  4. There are greater risks involved when you combine your policy with investments.

We highly recommend calling one of our brokers if you are considering purchasing universal life insurance.


Couples Self-Employed Have Children? Homeowners Estate Planning Follow Us at Twitter