Participating life insurance

Are you looking to plan your estate so you can leave more to your loved ones or benefit from liquidity to maximize your retirement income? Participating life insurance could be an excellent option for you and your family.

What is participating life insurance?

It’s a form of permanent insurance (providing coverage throughout your life) that allows you to protect your family while benefitting from a number of other advantages. It includes a basic coverage amount with a premium, cash surrender value and death benefit that are fully guaranteed. With this product, you can also receive dividends each year, which can be used to purchase paid-up additional insurance or reduce your annual premium. You can even put your dividends into a savings account with interest or receive them in cash, if you prefer.

Less well known than term or permanent life insurance (where liquidity is available at the end of a specific term or after your death, for example), participating life insurance has two major advantages:

1. The possibility of making additional deposits to acquire paid-up insurance to accelerate the growth of your death benefit and cash surrender value.
2. Access to liquidity, if needed, through the cash surrender value. Certain conditions may apply.

This insurance product therefore offers a great deal of versatility to meet your personal needs and plans for the future.

It also offers advantages if:

1. You want to leave a larger estate to your loved ones and, if needed, benefit from liquidity for your retirement.
2. You want to offer your children or grandchildren a solid financial foundation.
3. You are a business owner looking for life insurance coverage that generates growth.

How does it work?

As mentioned above, with participating life insurance, you have the possibility of receiving dividends each year. With iA Financial Group, you have four options for using your dividends:

1. Purchase paid-up additions (PUA) to favour the growth of your estate by maximizing your death benefit and increasing your total cash surrender value.
2. Reduce your annual premium, without reducing your coverage amount.
3. Receive your annual dividends in cash for immediate access to additional liquidity, if desired. Tax consequences may apply.
4. Deposit your dividends in a savings account generating interest, which is taxed at the end of the year. Tax consequences may apply.

Who is participating life insurance for?

Participating life insurance is a high-end product. It can be an ideal solution if you are:

1. A parent or grandparent who wants to offer your children or grandchildren a solid, guaranteed financial legacy. It also gives you access to potential long-term growth.
2. A professional with strong income growth and excess liquidity available. It provides access to liquidity through the cash surrender value, which you can use for projects like buying a new house or to supplement your retirement income.
3. A business owner looking for a flexible permanent insurance solution with access to liquidity. It can provide you with financial protection against the loss of a partner or to ensure your firm’s succession.

In addition, since there are lots of life insurance products on the market and it can be hard to know which way to turn, visit our Advice Zone to learn more about how to choose life insurance and get details about the different kinds of life insurance available. Our article on understanding life insurance will also help you make the best choice based on your family’s profile.