Universal life insurance is for individuals and families looking for financial security and who would like to accumulate extra savings for their retirement, for example. This is an interesting product for people with above average income who are looking for a savings option other than the RRSP, but that is also tax-deferred.

In one contract, universal life insurance allows you to insure your financial security and that of your loved ones, and accumulate additional tax-deferred savings. It is a flexible financial program that you can adapt to your needs as your situation changes.

How does it work?

The premiums that you pay, after applicable taxes, are used to pay the cost of the insurance and administration fees. The extra money is then invested in the investment options of your choice, either at guaranteed rates or based on the stock market index.

The extra amounts, which make up the “savings” part of your contract, generate interest and/or returns which accumulate tax-free.  After a certain time, you can make withdrawals from the amount accumulated in your investment options. Note, however, that the amount withdrawn may be taxable.

Some transaction fees and/or surrender charges may apply and the insurance cost option may be level or increasing, according to your needs.

The benefits:

• It is possible to make partial withdrawals from your savings for projects that are important to you.
• You can benefit from an exemption from premiums if you are temporarily unable to make your payments.
• A wide choice of riders and additional guarantees allow you to personalize your contract according to your needs at any time.
•  You can insure up to nine people under the same contract. This number may vary between financial institutions.