Universal Life Insurance Canada

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Canadians have some great options for being able to buy various kinds of insurance. It includes life insurance. Among these are different types of life insurance. One of these is called Universal life insurance.

What is Universal Life Insurance in Canada?

Universal life insurance allows an individual to purchase a set amount of insurance. The insured names who they want the policy paid to. It is in the event of the insured’s death. They can name one or more beneficiaries. However, Universal Life Insurance comes with some additional benefits and options.

It is the type of insurance that offers financial security for a person’s beneficiaries. As well as it has some investment advantages.

How Does Universal Life Insurance Work?

Individuals pay premiums for a specific amount of insurance coverage. Part of this premium goes toward the life insurance coverage. Another portion of it goes into an investment.

How Much Growth is there in the Investment Portion?

The insured gets to choose from different types of investments. There are investment options available to them that they want to participate in. The choice will depend on the individual’s personal preference. Plus, the choice depends on how much of a risk the individual wants to take.

There are a few factors that will dictate the growth of the investment. The amount of the premiums will be one. The other will be on how well the investments themselves do.

What Can Be Done With the Investment Growth?

Everyone has a choice of what they want to do with the accumulated savings. It is the savings from the investment. Some people choose to use it to pay their premiums. Others like to consider it as a form of savings. It gives some security in knowing that they have some extra money. They can use these funds to borrow from and then repay it back.

This investment has some good potential. It also has a direct bearing on the value of the policy.  Withdrawals should be paid back. If not it decreases the value of the policy. The value is the amount that the beneficiaries would receive. It would be upon the death of the insured.

Who is Universal Life Insurance Best Suited For?

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Everyone has their own specific insurance needs. Many want assurance that their loved ones will be financially secure. For them, the Universal insurance policy is a good choice. It is one that is in place for life. As long as the premiums are in good standing.

It also a good choice for those that like to do some investing. Having the security of some extra funds put away is an attractive feature to some.

Others like the simplicity of the Universal Insurance. They don’t have the hassle of having to renew it. It is in place for life.

They also like the fact that the premiums will remain the same over the lifetime of the policy. It is not the same with some other types of insurance.

Is Universal Life and Whole Life the Same?

There can be some confusion between Universal life insurance and Whole Life Insurance. They are not the same but are similar in some ways.

The Similarities

These life insurances come under the category of being permanent life insurance policies. It is because they are both meant for lifetime coverage.

These insurances both have the opportunity to provide an accumulation of cash value.

They both tend to be higher in premium costs. When compared to insurance like term insurance.

The Differences

The big difference between these two forms of insurance is the flexibility. It pertains to that which comes with Universal Insurance.

There is a possibility to miss paying some of the premiums.  Using the accumulated investment value to pay the premiums is an option. There has to be enough cash value to cover the missed payment.

There may be an accumulation of interest earned. It will be as a result of the investment accumulating cash value.  A tax deferment may be available.

The premiums can fluctuate based on the what the current interest rates are. If interest rates are high, then the premiums will likely be lower.

In most cases, the interest on the Universal Life Insurance policies is adjusted on a monthly basis. For Whole Life insurance, it is usually done once a year. It can make a difference in the accumulation of the cash value. It may accumulate at a quicker rate.

Shopping for Universal Life Insurance

It is important to shop carefully for any insurance. It includes the different varieties of life insurance. One of the challenges that arise is which Insurance Company to choose. There are many Companies like this that service Canada. It is very time-consuming to sit down and try and call each of them. One has to be mindful that each Insurance Company is different. It is true even though they are offering the same types of insurance.

A good way to shop is first to decide which type of life insurance appeals to you the most. For example, those who like the investment aspects may want to go with the Universal Life Insurance. Getting quotes for this type of insurance is a good starting point. Using the best quotes, the insurance shopper can then make further inquiries.

Another alternative is to get quotes on the different types of insurance. For example, getting quotes on Whole Life Insurance as well as Universal insurance. Then a comparison of the cost of premiums can be made.

It is important to have good life insurance. However, it has to be affordable. It means that the individual has to be able to comfortably make the premium payments. Otherwise, a missed premium could occur. If this happens then, the insurance could become void.

Is Universal  Insurance the Right Decision?

Everyone has their own particular needs when it comes to what insurance provides.  Looking at whether the insurance coverage will meet the needs of the beneficiaries is a priority. Then for those that want the extra advantage of having some money to rely on, it makes the Universal insurance a good choice.