1What Permanent Insurance Means
Permanent life insurance has no end date. There are three main kinds in Canada: whole life, with guaranteed premiums and cash value; universal life, with flexible payments and an investment account; and term to 100, lifelong coverage with little or no cash value at a lower price.
2How Whole Life Works
Part of each premium pays for the insurance and part builds the policy’s cash value. Insurers offer different payment periods, such as paying for life or paying over a set number of years, after which the policy stays in force with nothing more to pay. A shorter payment period costs more per year but less overall.
3Participating or Non-Participating
Participating whole life can earn yearly dividends from the insurer’s participating account. Dividends are not guaranteed, but they can buy extra coverage, lower your premiums or be paid out. Non-participating whole life has no dividends; its premiums and cash values are fixed and guaranteed. Your advisor explains which one the plan you choose is before you apply.
4Using the Cash Value
You can usually borrow against the cash value or withdraw it. A loan reduces the death benefit until it is repaid, and cancelling the policy for its cash value ends the coverage and can create taxable income. Whole life is best treated as lifelong protection first, savings second.
5Who Whole Life Suits
- Parents who want to leave a guaranteed amount to their children.
- Business owners and people with property or investments who expect estate taxes.
- Anyone supporting a dependant who will need help for life.
- People who want premiums fixed for good.
If your main need is protecting the mortgage and the children’s years, term life does that for much less.
6Frequently Asked Questions
Is whole life insurance worth it in Canada?
For a need that lasts your whole life, often yes. For a need that ends, like a mortgage, term usually costs far less.
Can whole life premiums go up?
Normally no. Whole life premiums are guaranteed for the life of the policy. Dividends on participating policies are not guaranteed.
Can I cash out a whole life policy?
Yes, but cancelling for the cash value ends your coverage and part of the payout can be taxable.
What is the difference between whole and universal life?
Whole life has fixed premiums and guaranteed values. Universal life has flexible payments and an investment account whose returns are not guaranteed.
Can I see whole life prices online?
Yes. Choose whole life in our quote and you see real prices, every insurer named.
Ready When You Are
Decide with real prices and honest answers. When you want help, a licensed advisor goes through your application with you and explains your coverage, in your language.