Why should you go for a Whole Life Insurance plan in Toronto, Canada? – The 4 major benefits

/ Life Insurance / Jul 16, 2020

By now, you have probably realized the importance of life insurance to protect the financial health of your family. Like all life insurance products, whole life insurance is designed to provide financial protection to the people or organizations that the individuals care for in the event of a death.

Whole life insurance never expires and lasts a lifetime. It is therefore ideal for people who want to keep their life insurance until their old age. Let’s take a look at some of the major benefits of the best whole life insurance plan in Toronto, Mississauga and Ontario, Canada.

1. A whole life policy remains active regardless of age

Most term insurance policies expire at a certain age. With a whole life insurance policy, you face no such problem.

A whole life insurance plan remains in force for life.

2. Stable premiums

Whole life insurance premiums remain level for the duration of the contract. This means that they start at a higher rate than term life insurance policies, but will end up being lower at later stages of life, as life insurance premiums increase each time you renew your police.

There are whole life policies that will allow you to pay premiums, sometimes increased, for a specified period of years or up to a certain age, with no additional premium required afterwards.

3. Fixed investment portion

Whole life insurance along with universal life insurance, comes with an investment component, separate from your insurance component.

This is called a participating policy, which means that you can participate in the profits of the insurance company through an investment. Throughout life, the insurer decides how the investment component is invested, but it generally comes with a stable rate of return with low volatility.

Investments are in a tax shelter, which means that all investment income earned in a whole life insurance policy is tax-exempt when left to a beneficiary.

Note: If the investment income is borrowed from the insurance policy, it attracts tax.

4. Cash value

In addition, permanent policies come with a cash value, also known as a ” cash surrender value (CSV).” This amount increases with the term of the policy.

This amount exists if you wish to borrow against your policy or cancel it to redeem the CSV, also known as “surrendering”.

Once withdrawn, this amount attracts tax. Hence, surrendering your policy to collect this amount can result in a substantial loss of your insurance payout that you would have worked for a long time to earn.

There may also be other consequences, such as having to repay the amount borrowed from your policy within a specified time, so make sure you understand your policy perfectly especially in the presence of an experienced financial advisor.

Most policies will not be having this option in place from the first day, but rather after five or ten years of payment into the policy. Many insurers also charge high surrender fees that typically decrease over time.

Get in touch with us for the best and affordable Whole Life Insurance Plan in Toronto and Mississauga, Canada

Trust Life and Investments is all about providing affordable insurance options for our customers in Canada. We have over 30 years of experience providing expert insurance and investment advice for both businesses and individuals.

Get in touch with our expert financial advisors to know more about affordable whole life insurance plans.