Universal Life Insurance

Universal Life insurance is a type of life insurance that combines permanent insurance with a potentially high-earning tax-advantaged investment component if well-funded.

Universal life policy is more flexibility than whole life and term life insurance in terms of timing and amount of premiums, face amount and life/lives insured. You can increase, decrease or even suspend premiums, as long as your account value can support the mortality and expense deductions. You can choose to pay an amount that is higher than the minimum premium when the policy is first issued, to take advantage of the tax-sheltered growth that can happen in the UL policy and to build up the policy’s cash value. You can also deposit lump-sum premiums at any the time subject to the minimum and the maximum amount specified in the policy.

Universal Life insurance is not for everyone, but it’s an excellent tool to build wealth over the long term. If you want your life insurance policy to help you save and invest money, as well as provide opportunities for tax-sheltered growth, or just want a flexible life insurance policy that you can make changes to, then Universal Life insurance might be for you.

You may also consider a Universal Life policy if you have already maxed out your RRSPs and TFSA, especially if you have a high marginal tax rate, universal life may be a fit for you. From a tax-efficient standpoint, the savings component allows for tax-deferred investment growth that can be used in many ways while you are still alive such as supplementing retirement income, building assets for your children or helping to cover the costs associated with a disability, critical illness or long term care. Upon your death, your beneficiary will receive a tax-free death benefit. This money can be used to help secure the future of your loved ones or help with any taxes associated with your estate.

Universal Life insurance products are complex and maybe difficult for you to understand. You need to actively monitor the performance of the investment account, and make adjustments to the policy investments as needs change. Policy performance is sensitive to changes in investment performance.

If you are looking for life insurance protection with a built-in savings component, then a Universal Life insurance policy may be right for you. By combining protection with savings, Universal Life insurance provides lifetimes protection. As participating Whole Life, you can customize your Universal Life policy to meet your needs.

If you are looking to have more information about Universal Life and how it can work for you, please contact us and one of our advisors will be happy to assist you.