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What is universal life insurance?

Universal life insurance is a unique life insurance product that combines permanent life insurance coverage with options for investment that offer tax-advantaged and savings. It’s an excellent product to help one build an estate and pass your assets to their beneficiaries.

Who is it for?

With the ability to adjust your premium payments (within certain limits) to your changing needs and situation, universal life insurance is ideal for those focused on obtaining flexible coverage. Universal life insurance makes sure you and your family are protected for life, provided you pay your premiums.

With added investment components, you have the opportunity to grow your wealth over time, making it an excellent option if you want to utilize your insurance while you are still living. You can fund your financial goals or use it to leave a larger legacy to your loved ones or organizations you’ve named as your beneficiaries.

How does universal life insurance work?

Universal life, first and foremost, is an insurance policy. You decide the amount of insurance you need to protect your family, assets, or your business in the event of your death. Like other types of life insurance, the premium and cost of insurance is calculated based on your age, health, smoking status and other risk factors.

In addition to the insurance protection offered with universal life, your premiums are invested and have the potential to generate tax-advantaged growth. With this product, you get to choose the investment options inside your policy.

With each premium payment you make, the insurance company deducts the required premium taxes. The rest of your premium payment is deposited into investment interest accounts, which you select when you apply for the policy. Each month, the insurance company deducts charges for the cost of insurance, administration fees, and charges for any additional coverage riders.

The amount that is left over makes up the investment portion of your policy. Any money that remains in your investment interest accounts earns interest and fluctuates based on the performance of your investments.

Universal life insurance policy is most effective when you pay more than the amount needed to cover the costs of your policy. You are limited in the amount of premium you can pay each year and maintain a tax-exempt status on your policy. This is known as the maximum exempt premium (MEP). Any premiums you pay over the MEP are deposited into a separate account held outside of the policy, referred to as the shuttle account. Any growth on investments in the shuttle account is taxable.

Because it is an insurance policy, when you die, the death benefit is paid to your beneficiary.

How does it benefit you and your family?

Universal life insurance offers cost-effective lifelong protection, combined with the opportunity to build tax-advantaged cash value to support your financial goals. It is flexible to match your changing needs and situation, so you can help make sure your family & loved ones maintain a comfortable lifestyle after you are gone.

  • The choice is yours
    You choose from a variety of investment options to match your financial objectives and risk profile.
  • Set your own schedule
    Pay your premiums on a set schedule, or as your budget allows. You can also adjust your premium payments within limits in the future without impacting your coverage, provided your policy has enough money in your investment account to cover the cost of your insurance.
  • Grow your wealth
    Whether you want to supplement your retirement income, fund your children’s education or realize your dream of starting a business, universal life insurance can help you achieve your financial goals through the accumulation of tax-advantaged cash value which you can take advantage of while you are still living.

Market Index Accounts (Product of Industrial alliance group)

These Index-Based Accounts produce credited rates based on the returns of recognized reference indices. The interest rate credited for each of these accounts is equal to 100% of the compound return of the index, including any net dividends, minus current annual fees, as indicated in the following table.

Market Index Account Financial Index Link Index Description Current Annual Fees Maximum Annual Fees
Bonds FTSE TMX Canada Universe Bond Index Steady reproduction of the Canadian bond market. It is composed of federal, provincial, municipal and corporate bonds. 1.0% 1.5%
Canadian Stocks S&P /TSX 60, total return Composed of 60 securities from Canadian companies with strong balance sheets. These securities are distributed across 10 industrial sectors and are represented on the Toronto Stock Exchange. 1.0% 1.5%
Global Stocks MSCI World, total net return One of the best-known international indicators, it is composed of securities of companies operating primarily in North America, Europe and Asia. 1.0% 1.5%
International Stocks MSCI EAFE, total net return Composed of securities of companies from a variety of industrialized countries operating in Europe, Australasia and the Far East. 1.0% 1.5%
European Stocks MSCI Europe, total net return Composed of European securities from a variety of countries, primarily from Great Britain, Germany, France and Switzerland. 1.0% 1.5%
U.S. Stocks S&P 500, total return The best indicator of the U.S. stock market. It is composed of 500 securities from more than 10 industrial sectors. 1.0% 1.5%
U.S. Stocks / DAQ Nasdaq 100 Securities of 100 of the largest companies on the NASDAQ that offer high-technology products and services (computer hardware, software, telecommunications and biotechnology). 1.0% 1.5%

Contact Final Expense Ontario’s insurance advisor today to start working on your Universal Life Insurance plan.

Final Expense Ontario is here to help you find accommodating Universal Life Insurance policies. We help you make your decision with total peace of mind. Call us today for a no obligation free consultation 1-800-593-1817 or Get Quote

Universal Insurance can range from 5,000 to 10,000,000+ dollars in coverage. A licensed insurance broker can work for you to ensure that you get the best universal life insurance deal as possible.

Don’t leave your family with unexpected expenses when you die. Life insurance can be the last gift you will give.

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