There are 3 stages of life insurance needs – Family Protection, Accumulation of Assets and Estate Preservation
- Needs will shift as a client moves through these 3 stages and the amount of life insurance needed generally changes due to exposure to capital gains, taxes due in the year of death, RRSP/RRIF tax, etc.
- Term insurance is designed to offer the best premium for the initial period of coverage only.
- Permanent coverage offers the best premium over the long-term because that is its job.
- Universal Live is the most flexible and versatile product and offers the options and benefits the other types of insurance do not provide.
- The actual Cost of Insurance is basically the same for Term to 100 and Universal Life. The difference is made up of Cash Value in Universal life, which funds the Cost of Insurance after the pay period is over.
- The Death Benefit on the Universal Life is the Sum Insured plus the Cash Value, which is all paid out tax-free.
By Myles Rempel