Whole Life Insurance

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Whole Life Insurance is a permanent life insurance product which provides a tax free death benefit that is guaranteed to pay out regardless of age (lifetime protection, never expires). It also has cash that accumulates inside of the policy on a tax deferred basis.

These policies are very flexible and can be customized to meet the client’s needs. Typically the death benefit starts at a specified amount (e.g. $250,000) and additional coverage is purchased automatically every year depending on policy dividend performance. This results in the death benefit increasing typically on an annual basis.

Whole life insurance policies have fixed, guaranteed premiums which means that the premiums do not increase or decrease for the duration of the policy. These policies can also be paid up (no premiums further required) after a certain amount of years of premiums being funded into the policy.

These policies are offered by most insurers in Canada, with each insurers policies having different advantages and disadvantages over the other.

Whole life insurance is a straight forward permanent life insurance solution used by all types of people – young and old and the rich and the poor.  

Whole life insurance is designed for those individuals who have a permanent life insurance need. This means that they will require insurance coverage at the time of death (regardless of age). Some of these needs include,

  1. Final expenses (funeral costs)
  2. Estate costs
    – Taxes at death
    – Probate fees
    – Capital gains from an investment portfolio, rental/secondary properties, cottage, shares of a business
  3. Leaving a legacy to family, charity, etc.
  4. Individuals seeking another form of tax deferred investment growth
  • Whole life insurance never expires – it is guaranteed to last a lifetime and pay out at your death regardless of age
  • Premiums are also guaranteed – they will never increase
  • There is cash that builds inside of the policy which consists of two separate amounts. There is cash that is guaranteed to accumulate every year and dividends that are paid on top of this amount
  • Policies are very customizable to meet your needs
  • The death benefit is tax free
  • Does not require much service once it has been put in place

When the beneficiary receives the policy benefit (e.g. $1,000,000 tax free) they can use the funds however they wish.

  • Pay off taxes owing to the government from an estate
  • Eliminate debt – pay off all or a portion of your mortgage, credit cards, line of credit or any other debt that you may have
  • Time off work – take time off work to spend with your family and friends, relax, travel, etc.
  • Children’s education – help fund a child’s post secondary education
  • Leave money to a charity or to a loved one as a legacy
  • Freedom – spend the money in any matter that you like

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