Universal Life Insurance combines the lowest possible cost life insurance to cover estate planning and family income replacement needs with the power of tax-sheltering your investment growth. Universal life insurance, such as Tax Advantage Life, is one of the last significant mainstream tax shelters left to Canadians trying to maximize their savings for their fast-approaching retirement years.
Tax Advantage Life is a universal life insurance policy that features unmatched flexibility and solid guarantees. The flexibility lets you tailor your policy to meet your specific needs. And as your needs change, your policy can be revised to address these needs. The major strength of Tax Advantage Life is that it is a flexible permanent insurance policy that can accumulate value on a tax-deferred basis. This means that the value within your life insurance policy will grow faster than if you had to pay income tax each year on the interest as it is earned. Plus, you have access to the value within your policy by making a loan or by taking a partial withdrawal subject to surrender penalties during the first 10 years, and Market Value Adjustments on Fixed Interest options. Also, your beneficiaries will receive the death benefit tax free.
The interest payable on Guaranteed Interest Options is linked the yield of a comparable Government of Canada Bond, minus a charge. The bond and index options are designed to closely match the performance of the index or fund that they are based on.
When you receive your policy, you have a “free look” period of 10 days from the day the policy is delivered to you. You may return it during the free look period for a full refund of the premium you paid. After the free look period, surrender penalties will apply. Premiums are flexible, although continuing to pay your premiums will help you maintain your policy’s value. If you discontinue your premium payments, the policy may terminate. To avoid this situation, be sure to check your Annual Statement to make sure the value within your policy is sufficient to keep your policy in force.