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What is whole life insurance?

Whole life insurance is one of the most popular types of permanent life insurance. It’s a simple, no-frills version of permanent life insurance with lower premiums. As the name suggests, it provides lifelong coverage. The rate is fixed and will not fluctuate. As with other permanent life insurance policies, whole life will increase in cash value.

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Guaranteed lifelong coverage

Whole life insurance has a lot of advantages over other permanent life insurance products – mostly because the premium, cash value, and beneficiary payouts are all 100% guaranteed. It’s also the reason why whole life insurance usually costs more than other types of permanent policies.

Don’t worry if all of this sounds a bit confusing, our insurance brokers are here to help, with free advice and no-obligation quotes.

What does whole life insurance include?

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Lifetime coverage

Stable coverage for your entire lifetime with no fluctuating rates or surprises so you can breathe easy and never worry about it.

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Guaranteed benefits

You never have to worry about changes to the market or anything else, beneficiary payouts are 100% guaranteed.

Fixed premiums

For those who love stability and consistency, your rates are locked-in, so your premiums will never increase or fluctuate.

Insurance savings

Commercial property

For those who love stability and consistency, your rates are locked-in, so your premiums will never increase or fluctuate.

Whole life and other permanent life insurance compared

WholeParticipatingUniversalTerm 100
Lifetime coverageYesYesYesYes
Guaranteed premiumsYesYesNo – Can increase or decrease to suit your budgetYes
Savings componentYesYes – Dividend is based on the insurance company’s performanceYes – Investment portfolio is customizableNo
Cash valueYesYesYesNo
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Frequently asked questions about whole life insurance:

Whole life insurance is a type of insurance that gives you a set amount of life insurance coverage, at a set premium for your whole life. Your rate never changes and your beneficiaries are entitled to a set benefit, no matter when you pass away. Whole life insurance also includes a cash value that continues to grow the longer you have the policy. You can only access that cash value during your lifetime.

Like most life insurance, whole life insurance is not intended to cover particular expenses. You will decide on a death benefit, say $200,000, which will be payable to your beneficiaries when you pass away. Your beneficiaries can choose to use some of that money to pay your debts or funeral expenses, but there are no restrictions on how they use the funds. It becomes their money.

Whole life insurance is designed to provide peace of mind, price stability, and an investment you can use during your lifetime. On the other hand, a term life insurance policy will be cheaper than a whole life policy when you’re 30 and increases the older you get. A whole life policy will be more expensive to start, but it will never go up in price. The benefit is also set, so whether you pass away today or in 40 years, the death benefit paid to your beneficiaries is the same. Whole life insurance also directs a portion of your premiums into investments that grow over time. The cash value of these investments are available to you during your lifetime.

Whole life insurance is a great choice if you’re looking for:

Peace of mind – Your benefit is guaranteed
Stable rates – Your monthly rate will never go up, no matter how long you live.
A tax-deferred investment – A portion of your premiums are invested, and you can access that value at any time.

The best time to get whole life insurance is right now. That’s not a sales gimmick. The reality is, the younger you are when you purchase the policy, the lower your premiums will be, and those premiums will be locked in for life. So if you’re turning 30 tomorrow, you can save yourself a whole lot of money by buying your whole life policy today, while you’re still 29. For many of us, life insurance is something that you buy when you have kids, to ensure that they will be taken care of should anything happen to you. For others, life insurance becomes a consideration later in life, to ease the financial burden on your loved ones when you pass away. Everyone has a different reason for getting life insurance, so the timing is different for everyone. In terms of what it will cost you, sooner is always better than later.

Whole life insurance is for anyone who wants a combination of life insurance and a tax-deferred investment vehicle, but also want to have control over their monthly expenses. Because the premiums and the benefit never change, whole life insurance is very attractive to people who crave certainty and stability.

Not really. You’d have to cancel your whole life policy and then buy a term life policy. If you’re thinking of switching because your monthly premiums are higher than you would like, there are a few things you should know:

Premiums for term life go up as you get older, while whole life premiums stay the same, so at a certain age, you’ll actually pay more for term life.
If you’ve had your whole life policy for quite some time, you may have some cash value built up in the account, which you could use to pay a portion of your monthly premium.

Yes, a whole life policy uses a portion of your premium to build up savings that you can use during your lifetime. There will be terms in the policy about how much you can withdraw and at what intervals. You can also cancel your whole life policy at any time. Depending on how long your policy has been in place, there may be a “cash out” value, but it could be subject to cancellation penalties. Note: if you cancel your whole life policy today to get the cash value, and try to start it again tomorrow, the premium is not guaranteed, and in fact, you’re likely to pay much more the older you get.

Your whole life insurance premiums are not tax deductible if it’s a personal life insurance policy. If you are a business that pays premiums or a portion of the premiums for your employees, in some cases that would be tax deductible as a business expense.

It depends on a lot of different factors, including the benefit level you choose (how much will be paid to your beneficiaries when you pass away), your gender, whether you smoke, and your age when you start the policy. To give you a rough idea using a $100,000 death benefit: If you start the policy at age 30, on average women would pay around $50 a month, and the average male would pay around $60. If you start the policy when you’re 50, then woman on average would pay around $115 a month, while men would pay around $130.

You are unique, so are your insurance options

Being a brokerage for over 70 of Canada’s top insurers means we have access to a wide range of insurance solutions at some of the best rates in Ontario. Want to learn more about the coverage options available to you? Here’s a few of them.