Universal life Plan combines life insurance protection with investment option in one plan.

Under the terms of the policy, the excess of premium payments above the current cost of insurance is credited to the cash value of the policy.

These type of policies offer the advantage of guaranteed level premium throughout the insured lifetime.

For those who have maxed out their RRSP’s and have no significant interest bearing, non-business debt to pay, universal life can be a one stop financial decision that covers the risk of pre mature death and in retirement provides virtually tax free pension income.

Universal life provides potentially large return, the possibility of nearly tax free accumulation and a way to get a tax free retirement income. That’s something even registered retirement savings plan, who’s payouts are taxed, can provide.

Just how advantageous universal life policies are depends on what investments the insured chooses to buy.

Universal life gives client control over their investments within the policy, full disclosure of how the money is multiplying, insight into the actual cost of insurance, and a chance to make use of equity investment choices. There is a cost, but the benefits are hard to match with any other kind of tax sheltered investments.

Retire on your life insurance policy. How?

At retirement, up to 90% (in some cases, up to 75%) of the cash value can be pledged to a bank in exchange for a series of loans. Because these are loans, the corresponding retirement income they create is not considered taxable income. Amazing but true.

At the policy holder’s death, the accumulated cash value first go towards paying off the retirement loan, (plus interest) with the remaining balance plus the policy face value (remember this is a life insurance coverage that we have been paying for) going to beneficiaries, also tax-free.

Life insurance proceeds paid out at death are non-taxable.