A Whole Life insurance contract includes both insurance and investment components. The investment component cash values add up over time and can be used for wealth accumulation. Whole Life is a permanent life insurance policy and pays out a predetermined, guaranteed amount when the insured individual dies.
Universal Life insurance is a flexible policy which offers a lower cost of life insurance as well as an investment element in order to build cash value. This cash value can be used to help pay premiums once there is enough accumulated savings in the policy.
Term insurance will provide coverage for certain period of time, usually 10 or 20 years, at a guaranteed premium. Term insurance contracts can normally be converted to a permanent insurance policy or renewed at an increased premium amount.
Disability insurance offers a monthly income benefit to an individual in case of illness or injury. In Canada, 1 in 3 people, on average, will be disabled for 90 days or longer at least once before age 65. The average length of a disability that lasts over 90 days is 2.9 years.
A personally owned disability policy is beneficial if your employers group plan does not include this coverage. It can also be used to supplement your employers plan or a government program such as WCB.
Critical Illness Insurance
Critical Illness insurance will pay a lump sum tax free benefit to an insured who is diagnosed with a specified illness or condition covered by the policy. Many major illnesses are covered, including cancer, heart attack and stroke, however, coverage may be available for more than 26 covered conditions. Certain Critical Illness contracts will also allow a 100% refund of all premiums paid after a designated number of years if the insured does not claim under the policy. Critical Illness insurance helps to prevent unnecessary financial strain on a family and provides for more choice in treatment and care.
Segregated Funds (Estate planning with investments)
A Segregated Fund is a type of investment fund used by Canadian insurance companies to manage individual, variable annuity insurance products. A segregated fund offers investors a variety of unique features, including maturity guarantees, death benefits and creditor proteciton.