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universal life insurance

Did you know that universal life insurance is a permanent life insurance which contains both insurance and an investment component? This combination can give you the financial protection you need plus a tax effective way to save for retirement beyond RRSP and TFSA limits.

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Universal Life Insurance

Another type of permanent life insurance that combines the protection with a tax advantage investment. It helps to maximize the transfer of your wealth to your family in a tax efficient way.

  • The three pricing factors are unbundled: Cost of insurance, expenses charged by the insurance company and investments options available to the policy holder.
  • Flexibility: You can have a flexible premium schedule, subject to the term of your policy, and certain minimum payment requirement.
  • A wide selection of investment options.
  • Tax Advantaged Investing – A portion of your premium purchases your insurance, while the rest earns interest that is not taxable while it remains in your policy.
  • Access to funds – Throughout your lifetime, you can access the funds in your policy to supplement your income in retirement or during a time of illness.

How it works?

  • Premiums deposited to investment account.
  • On a monthly basis – Premium tax, Cost of insurance, Cost of riders and benefits, and policy are deducted.
  • Investment return credited
  • If there are adequate funds in the cash account to cover costs, the plan stays in force.
  • Lump sum deposits can be made at any time.
  • If investments returns are ahead of projections, premium payments can be skipped.
  • If investments returns are below projections may have to add more money.


  • Can be cheaper than whole life insurance because it does not offer the same guarantees.
  • Flexible premiums
  • Accumulation of cash value like a savings account
  • Allows policy loans against the accumulated cash value without tax implications


  • Complexity
  • Investment returns are not guaranteed
  • Some withdrawals are taxed: when UL policyholders withdraw some of the cash value, it will be taxable
  • Have a question we didn’t answer?

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  • Rashi, a client of Vertex Insurance and Investments Inc., when asked would you recommend Vertex Insurance to your friends or family and why? Here was her reply!


    A Professional Banker, a client of Vertex Insurance

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