Universal Life Insurance

Universal Life Insurance

Universal Life Insurance is one of the best things that could happen in the world of Life Insurance. UL policy is when a permanent life insurance is merged with the possibility to have several investment options.

 Your policy provides a lifelong coverage and at the same time you can save money within the policy to create tax-sheltered savings.

So, for example, you take a UL policy with a face amount ( a death benefit) of $200,000.00… and lets say that its monthly level cost of insurance is $100.00 per month ( also called minimum premium). That premium would remain the same in the entirety of the policy. However if you choose to put $50.00 per month extra over and above the premium, that would be saved separately within your policy.

You could choose from a variety of funds and have that sum invested in a portfolio. The growth within a UL policy of those funds is tax sheltered. There are several options how that cash savings could be touched by you…however upon death those savings are are rolled over into your face amount and go to your beneficiary as a Tax- Free benefit.

…So lets say that your $50.00 that you put aside grow to become $20,000.00 upon death. The amount received by your beneficiary is $220,000.00 ( IE. $200,000 as face amount + $20,000.00 as cash values).

 UL Policy ….an excellent way to build wealth that could actually become tax-free for your family. There are several options that could be customised for an individual.

We at YourInsuranceGuy.ca are experts in explaining the the various types of life insurance that could protect the entire family. Please feel free to contact us at aman@yourinsuranceguy.ca or at 1 416 509 2540. Please visit us for a no obligation quote or advice.

Life Insurance is a wealth maximising tool

A life insurance policy serves the purpose of replacing the income in case of an untimely death of the family breadwinner. In case of a family with two or three small kids, a mortgage and some additional debt, a life insurance policy on the parents would be extremely important. If one of the parents were to die, the surviving spouse would find it difficult to take care of the responsibilities and maintain a standard of living.


Cash Back or Money Back Life Insurance

A very standard question from purchasers of life insurance is, ” I have paid into the policy for these many years…What will I get back in case I am still alive and healthy? “   A very pertinent question because we all want to know where our money is going and will there be any return on our money during our life time.


Universal Life Insurance: Providing tax savings related benefits

Universal life insurance provides several advantages to Canadians with regards to taxes. The following are four key tax advantages of universal life insurance.

1. Your savings within the policy grow tax-sheltered. Each universal life policy has a minimum and maximum premium. The minimum premium generally covers the cost of insurance and any administrative charges. When we overfund the policy beyond the minimum premium, that creates an accumulation fund which grows on a tax-sheltered basis.  Tax-sheltered growth facilitates a better compounding of money. Most insurance companies have a range of investment options that the insured can choose from. Certain companies have a few hundred different types of funds options to choose from.


Buying life insurance for kids

This could be a very sensitive topic for discussion for some. However, depending on the family situation, parents do consider taking insurance on their kids in the following manner:     Life Insurance on the kids is taken in small amounts as a rider to the parents’ policy. This is a very cost effective way to insure the kids.


Prepared by:  Aman Kapur

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