Universal Life Insurance
Universal life insurance policies are excellent probably because their origin was driven by consumer demand in the 1980s.
They are essentially an unbundled form of permanent insurance. You are buying term and have the option of investing the rest in a tax-advantaged plan. You can control the investments in your own selected portfolio and you can see detailed illustrations of where all of your funds are going.
Universal life insurance policies can be an excellent way to provide financial security for an individual, family or a business owner or partner. They can also service many other needs including but not limited to:
- Establishing your own Personalized Pension Plan for someone who is not a member of pension plan. You retain complete control of the plan
- If you are a member of a pension plan and thus have limited RSP contribution room then this may be an excellent place to setup another tax advantaged plan for your future
- If you have exhausted your RSP contribution limits then you could use a universal plan as a second RSP recognizing that you are contributing after tax dollars
- Preserving the value of your estate by providing adequate guaranteed funds to take care of heavy taxes and expenses after death
- Creating a dependable financial reserve accessible for any purpose - perhaps an emergency, a business opportunity or children's education
- Structuring buy/sell agreement funding or key person insurance for a business. The plan can tax-shelter funds for the future use of the business owner or a key employee
- Protecting family interests in a business
- To help avoid a future tax bill due on the death of the insured