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Universal Life Insurance

What is Universal Life Insurance?

Universal Life Insurance is a flexible life insurance plan that offers you two important benefits :

1. Savings (often tax-deferred)
2. Insurance for the long-term – usually lifetime coverage

You determine the blend you want of investment and insurance protection. When you make deposits beyond your prescribed insurance premiums, these funds can be invested and will earn interest. Your investment portion will grow – and tax on your investment will be deferred.

When the value of your policy builds, you can withdraw funds or take out loans against the your account. Like other loans, you will incur interest.

With universal life, you can maintain your level of coverage or you can opt to increase it over time. Or you can choose a combination of level and increasing value of life insurance.

On payout, there are no tax implications for your beneficiaries.

When Should You Buy Universal Life Insurance?

Universal life insurance is an important building block of your long-term wealth strategy. This insurance is designed to protect you and your loved ones and help you build your portfolio throughout your life. Universal life insurance is a popular choice for people who :

Have no more room for RRSP contributions.
People who want to augment their estate for children and grandchildren.
Entrepreneurs and businesses who want to protect their business’s value.

Advantages of Universal Life Insurance

Universal life insurance offers a unique blend of insurance and tax protection for you now and to your beneficiaries in the future. You have security and opportunity built into one policy. Other advantages include :

When paid out on death, the policy usually provides tax-free inheritance for your beneficiaries.
Under current federal tax law, investment growth is tax-deferred – an income tax savings for you now.
Universal Life insurance is flexible – you decide the blend of life insurance and premium payments.

What Universal Life Insurance Does For You

Universal life insurance is an investment vehicle for you as well as long-term insurance. Universal life :

Provides a death benefit.
Can be used for unexpected needs such as funeral expenses, loss of income or even mortgage pay out.
Can assist you in business planning.
Helps with wealth management and growth.
Can be used as tax-deferred savings.

What is Tax-Advantaged Growth?

Tax-advantaged growth means that the proceeds from the policy paid out to your beneficiaries is generally tax-free. You should speak to your broker to more fully understand your particular universal life insurance policy.