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Universal Life Insurance Guide and Quote

    What is Universal Life Insurance?

    Universal life insurance is a policy that covers a policyholder as long as he/she lives. On top of being insurance, it is also a saving product because universal life insurance accumulates cash value.

    It is different from whole life insurance. Universal life insurance is an “unbundled insurance.” This means you can vary your monthly deposit, choose a level or increasing death benefit option, or tailor your investment choices within a tax sheltered account.

    This type of insurance was created to correct the drawbacks of whole life insurance.

    You can find out more about this product from the video below.

    Sample Universal Life Insurance quotes

    Male, 44 years old, non-smoker, level COI, minimum funded, no serious health pre-conditions, universal life insurance policy for $200,000 coverage
    Best quote
    $196 per month

    Female, 35 years old, non-smoker, level COI, minimum funded, no serious health pre-conditions, universal life insurance policy for $500,000 coverage
    Best quote
    $251 per month

    Male, 51 years old, non-smoker, level COI, minimum funded, no serious health pre-conditions, universal life insurance policy for $200,000 coverage
    Best quote
    $262 per month

    Universal Insurance: Expert Summary

    Myles Rempel from RHM Insurance shares his experience:

    “If you’re looking for a Permanent Life Insurance policy that offers flexibility, you might want to consider Universal Life policies. They’re different from Whole Life policies because they have a minimum and maximum premium, and you can even add extra money into a savings component that grows tax-free.

    One of the great things about Universal Life policies is that they offer different types of cost of insurance. You can choose between a level cost of insurance or a cost that increases as you get older. Additionally, you can also choose between a level death benefit or an increasing death benefit.

    Basically, Universal Life policies are super flexible and can be customized to meet your specific needs. And the best way to ensure you get the policy that’s right for you is to work with an independent broker who can help you navigate the process.”

    What do you need to know about Universal Life Insurance – expert explains

    Looking for a permanent life insurance policy that gives you flexibility in investment options and potential tax sheltering? Universal life insurance might be just what you’re looking for! According to Myles Rempel from RHM Insurance, there are three types of permanent insurance policies in Canada: term 100, whole life, and universal life.

    Term 100 is a permanent policy with no cash value, while whole life has a built-in cash value. Universal life insurance, on the other hand, is a very flexible form of permanent life insurance that offers lifetime protection and an optional savings element. You can choose between a variety of cost of insurance options and investment components, including low-risk options like GICs and guaranteed investments, or higher-risk options like equity funds.

    What’s great about universal life insurance is that it offers a lot of flexibility. You can even take a premium holiday if you need to miss a premium or pay off your policy in a limited number of years. However, it’s important to watch out for the MERs on some of these funds, as they may be higher than outside MERS. Additionally, different companies offer different benefits, so it’s important to work with a broker who has access to all the different companies and can provide unbiased advice.

    Overall, if you’re looking for a permanent life insurance policy with flexible investment options, universal life insurance is a great choice! Just make sure to work with a broker who can help you navigate the different options available and find the right policy for your needs.

    When do you need Universal Life Insurance?

    There are numerous cases in which whole life insurance is your best option:

    • You want to have life-long coverage that does not expire.
    • You want flexibility in monthly contributions and the ability to choose level or increasing death benefit options.
    • You want a combination insurance and investment product.
    • You want to decide how your investment component is invested. This policy will let you choose a savings account, GIC, or index based investments.

    What are Universal Life Insurance rates?

    Universal life insurance is pretty flexible, which means you get to decide how much you want to contribute each month. But, keep in mind that the rates for universal life insurance policies are usually higher compared to term life insurance. This is because with universal life insurance, you’re looking at a lifetime of protection with an added investment feature.

    Four key tax advantages of universal life insurance

    • Accumulation fund grows on a tax-sheltered basis. Universal life policies come with a minimum and maximum premium. The minimum premium covers the insurance cost and administrative charges. Anything beyond the minimum premium goes into the accumulation fund. This fund grows tax-free and offers a range of investment options for the policyholder.Most insurance companies offer various investment options so that the policyholder can choose where to put their money. This flexibility ensures that the policyholder is in control of their investment choices.By choosing a universal life policy, the policyholder can have their investment is growing on a tax-sheltered basis.
    • Death benefits are paid out tax-free.
      Applicants can choose between a level death benefit or an increasing death benefit. The increasing death benefit pays out the base amount plus the accumulation fund. Both amounts are paid out to the beneficiary tax-free.
    • Premiums withdrawn from the accumulation fund are paid with pre-tax dollars.
      Want to save money on your insurance premiums? Look to the policy accumulation fund. By using this fund, you can pay your premiums with pre-tax dollars. Plus, the money within a universal life policy or accumulation fund grows on a tax-sheltered basis, which means you can save even more.If you never withdraw funds from the accumulation fund and use them solely to offset future premiums, you won’t have to worry about any tax implications. It’s a win-win situation that can save you money in the long run.
      So why not take advantage of this opportunity? By using the policy accumulation fund, you can enjoy the benefits of tax-free growth and pre-tax payments. It’s an easy way to save money and protect your financial future.
    • Universal life contributions do not impact RSP or tax-free savings account contribution limits.
      With universal life contributions, you have the flexibility to invest as much as you want, whenever you want. And the best part? Your other retirement or tax-free savings accounts won’t be affected at all. So go ahead and contribute to your heart’s content – your financial future will thank you!

    Five Essential Tips for Buying Universal life Insurance

    Are you considering purchasing a universal life policy? It can be overwhelming with all the variables to consider. Here are five tips to make the process a little easier:

    1. Decide if you want a level cost of insurance (COI) or increasing cost of insurance. A level COI means your cost of insurance stays the same for life, while an increasing COI starts lower and goes up each year. Increasing COI can result in higher cash accumulation early on, but if the investment doesn’t perform well, you could end up with skyrocketing premiums or a lapsed policy.
    2. Choose the death benefit option that fits your needs. You can choose an increasing death benefit, which includes the basic face amount plus any accumulation, or a level death benefit, which is only the basic face amount. With a level death benefit, the risk charge can decrease as your cash value builds, leading to lower risk charges and higher cash accumulation.
    3. Pick an investment option that fits your risk profile. Most universal life policies offer savings accounts, GICs, or index-based investments. Just make sure to check the Management Expense Ratio (MER) associated with the index-based investments.
    4. Make sure you have access to your cash value in the early or later years of the policy. Some policies have high surrender costs if you cancel early, so it’s important to understand this before signing up.
    5. Work with an independent broker. Universal life policies can vary greatly between companies, so it’s important to find a broker who can give you unbiased advice.

    These tips should help you navigate the world of universal life policies with a little more ease.