Services we offer
The amount of savings that can be accumulated within this type of plan depends on a number of factors including the age of the insured and the amount of insurance coverage purchased.
These products also include strong guarantees such as the cost of insurance rates1 and the policy fee. Universal life plan also offers a wide range of investment options, a choice of death benefit options, riders, optional benefits and many other features you and your adviser can use to customize your plan to your specific needs.
Features of universal life insurance plan
What can you do with your universal life insurance plan?
The question really should be, what can’t you do with your UL plan? Because it has a built-in savings component, a UL policy gives you tax efficiencies while letting you:
- Build assets for your children
- Help protect your mortgage
- Enhance your retirement income
- Provide financial options and solutions for small businesses
- Protect your retirement savings in case of an occupational disability or one caused by 26 critical illnesses, including the need for long-term care.
faq
WHEN should you Consider Taking a Universal Life Insurance?
Universal life insurance not only includes the traditional insurance coverage offered under all life insurance plans, but also tax-advantaged investment possibilities.
Before taking out Universal Life Insurance:
- you must have a need for life insurance coverage
- be debt-free, and
- have no more RRSP contribution room
Generally, Universal Life Insurance is intended for people who:
- want to establish a savings portfolio that accumulates tax-free, or
- want to increase their wealth for their estate
- are looking for flexibility and want to establish their financial security gradually based on their life events, priorities and financial means.
Important Points to Consider when Buying Universal Insurance Plan
- Is the savings component required? In the event of death, are your savings payable to your beneficiaries in addition to the insurance amount?
- What kind of investment accounts are available: variable-term, guaranteed investments with simple or compound interest, index-linked investments, etc.?
- Is there a guaranteed minimum interest rate?
- Can you diversify your savings portfolio through different investment accounts and transfer funds from one account to another at any time?
- Can you start or stop saving whenever you wish or change the amount of your contributions?
- Can you use these savings to pay for your insurance coverage?
- In the case of last-to-die coverage, can the accumulated savings be paid out in the event of the first death?
- Is it possible to register these savings as an RRSP? Although it is quite rare, some companies offer this option.
- Are you entitled to annual investment bonuses that increase your tax-free savings? You should not only check the percentage bonus offered, but also the factors that trigger a bonus.
- In the event of illness or disability, can you access your savings in the form of tax-free disability benefits?
Loan and Surrender Provisions
At some point in your life, you may run into situations where you need extra resources or cash flow. Find out what the various insurers have to offer and which conditions apply.
Surrendering Savings
- If you decide to withdraw your savings, when and at what frequency can the surrender be made? Can savings be withdrawn in part? What is the minimum and maximum amount you can withdraw?
- Is there a surrender fee other than the market value adjustment? If so, over what period does it apply?
- Borrowing against or surrendering the guaranteed cash value: If you purchase permanent life insurance that offers guaranteed surrender values, can these values be used to pay for your universal life insurance? If so, what is the interest rate that will apply to the loan?
- If you wish to obtain the surrender value, will the surrender lead to the cancellation of one or more of your insurance coverage options or change the insurance amount?
Insurance Costs and Fees
Insurance costs and fees may be leveled or variable, guaranteed or subject to change, and may apply indefinitely or only for a given period. Check which options are available to you.
Insurance Costs
Insurance costs vary depending on the type of life and critical illness coverage you choose, the number of insured persons, whether it is payable on a first-to-die or last-to-die basis, the sex of the insured, their state of health, whether or not they are a smoker, and other factors.
Preferred rate: Some companies may also offer discounts on premiums because of the insured’s good physical condition and overall health. If you think you’re in good health, take the time to get more information.
Don’t forget to find out what criteria are used to get preferred rates, as they vary from company to company.
Fees
Administrative fees may include policy fees. Can these fees be paid in a lump sum? Generally, universal life insurance also includes management fees for the various investment accounts. Is there a guaranteed maximum for these fees?
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