Permanent Life Insurance
Permanent Life Insurance
Permanent life insurance, also known as whole life insurance, doesn’t have a policy end date like term life insurance. As long as you continue to pay premiums then the policy remains in force. Permanent life insurance is comprised of two components: the cash value and the death benefit.
• The cash value is a savings or investment component that grows over time. Policyholders can borrow against the cash value during the life of the policy. Some tax implications may apply to the amount withdrawn.
• The death benefit is the amount of money payable to beneficiaries when the policyholder dies. This payment is tax-free.
Similar to term life insurance, premium amounts are based on age, health status, gender, and other lifestyle factors such as occupation and hobbies.
Term life insurance is considered a protection product that offers a guaranteed benefit amount to beneficiaries upon the policyholder’s death; permanent life insurance is a more complex option that allows the policyholder to access the cash value of the policy and also pays a benefit amount to beneficiaries when they die. Premium amounts tend to be significantly higher for permanent life insurance policies. Life insurance companies across Canada offer a variety of permanent life insurance policies. Together, we can help you review this policy structure and determine if it is the right choice for you and your personal financial planning goals.
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