Universal Life
Features of Universal Life Insurance:
- Provides permanent insurance coverage.
- Most versatile of all insurance types, so can be customized to fit any situation.
- Perfect for people who think long-term and wish for their insurance plan to increase in value over time.
- Contains flexible investment options including guaranteed investments and mutual funds.
- You can deposit money into the account or take money out, just like a bank account... with one major twist: this bank account is sheltered from taxation.
- This tax-sheltered feature makes universal life insurance plans a great way to save for retirement.
- When planned right, the money you save by having tax-sheltered savings can help (or even totally) pay for your insurance policy.
Major Uses of Universal Life Insurance:
- To provide a means of saving money for retirement. Perfect for use in conjunction with registered retirement savings plans (RRSP's).
- To create an estate (estate creation). The insurance coverage amount is typically greater than the cumulative amount you pay in premiums. This allows you to create wealth for the next generation through the use of life insurance.
- To pay taxes that occur automatically at the time of death, saving your estate from government tax erosion so your family can afford to keep the estate intact (estate preservation).
- Enhanced buy-sell agreements for business partners, where the partners take out insurance on each other to continue the business in the event of one partner's death, while simultaneously providing a retirement plan in the process (see Details page for more information).