It’s possible to use universal life insurance to save!
Universal life insurance may be the ideal option for you if you have maximized your RRSP and TFSA contributions and want to leave something to your heirs
What is universal life insurance?
Want to combine your savings and insurance? Universal life insurance is an innovative financial tool that combines two elements of sound financial planning, life insurance coverage and a tax-free savings account, in the same contract. It’s very useful as it allows you to leave more to your heirs or to protect the value of your business, if applicable. It’s also a good savings solution if you have already contributed the maximum to your RRSP and TFSA.
How does it work?
With universal life insurance, you have the option of paying more than your insurance premiums. The excess, the savings portion of your contract, is invested in the investment options you have chosen and the investment income earned grows tax-free. The income earned and additional bonuses are reinvested in the investment options you have chosen. You can make withdrawals at any time1.
Key advantages include:
- Flexible coverage that allows you to save for your projects or pay your insurance premium
- Non-taxable death benefits for the beneficiary
- Access to the money in the accumulation fund1
- Includes disability coverage
1 Transaction fees may apply. There may be tax implications.
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Whatever product you’re interested in, the following tools will give you an idea of how much to invest, which you can then discuss with your advisor.