Is Whole Life Insurance a Good Investment?

For those looking for the security of permanent life insurance in Canada, whole life insurance is an excellent investment.

It not only provides coverage for your entire life without premium rate changes but is the life insurance choice for those looking to build an alternative source of wealth and protect specific assets during a lifetime and afterward.

Is whole life insurance the best investment for you? Let’s take a closer look at some of the many benefits of whole life insurance and why it could be a great investment path for you and your loved ones.

 

Who Benefits the Most From Whole Life Insurance?

First things first: any type of life insurance can be a good investment, not just for wealth to access when you’re alive, but as a way to protect for family and assets in the long term.

Whole life and term life are the most common — and oldest — forms of life insurance in Canada for a reason. They easily protect your own money and help provide for your family by covering your income and more upon your death.

While term life insurance covers set amounts of time — usually 5, 10, 20, or 30 years — whole life insurance has the big benefit of protecting you through your lifetime at the same fixed premium rate when you first sign a policy.

 

Who Benefits the Most From Whole Life Insurance?

First things first: any type of life insurance can be a good investment, not just for wealth to access when you’re alive, but as a way to protect for family and assets in the long term.

Whole life and term life are the most common — and oldest — forms of life insurance in Canada for a reason. They easily protect your own money and help provide for your family by covering your income and more upon your death.

While term life insurance covers set amounts of time — usually 5, 10, 20, or 30 years — whole life insurance has the big benefit of protecting you through your lifetime at the same fixed premium rate when you first sign a policy.

 

It’s Great If You Have Specific Assets to Protect or Amplify

Additionally, a cash value life insurance policy like whole life gives you investment options. You can take the cash value and pump it into a stock portfolio you already have or put it in an index.

If you’re already investing and have a rich portfolio, a whole life insurance policy can help you diversify your holdings.

 

How Whole Life Insurance Works For You

Like other insurance policies, you pay monthly premiums with a whole life policy. However, some of your insurance costs will automatically go to the cash value of the policy. This makes whole life insurance a good investment if you start out young.

The initial cost of a whole life insurance policy is higher than other types, and in the beginning, many of the fees are huge. But over time, more and more of your premium cost goes toward the cash value.

That makes whole life insurance a great investment for those who are financially secure and have a solid plan to grow their wealth.

 

There are Different Whole Life Insurance Investment Options

In Canada, many financial providers have specialized policies within the whole life insurance umbrella that can help you maximize your investment by tailoring a plan to you and your needs.

For example, many offer a clear path to maximize your long-term growth that’s tax-deferred by increasing the amount of your death benefit, which helps you leave an inheritance and pay for gains on assets.

There are even policies that accelerate the death benefit even quicker, let you take out policy loans or use your policy as collateral.

The access to your cash value varies based on what you need. Basic whole life insurance plans in Canada may make your cash value accessible in 5 years, but others make it accessible in just 1 year.

Many whole life insurance plans also let you take out policies for your children or grandchildren, making it a good investment in their futures as well. The bottom line: Your cash value within your whole life insurance policy is an investment that has guaranteed growth over your lifetime.

 

It Can Fit In With Other Investment Goals

Another option: taking out your dividends as cash, which is usually not tied to income tax. You may also be able to withdraw the cash value of your policy up to a certain amount.

There will be fees, and the amount of the loan may be taken away from the death benefit but fees go away over time. These withdrawals can help you as an investment if the economy is in a downturn or you face some sort of financial emergency.

 

Deciding Between Life Insurance Policy Investments

As you can see, there are many different benefits that come from a whole life insurance policy, especially if you are looking to build wealth over a long period of time and take out the policy when you are young. It is also beneficial if you plan to have an estate that will need significant planning.

There are benefits of investing in other life insurance options in Canada, too. Term life is less expensive than whole life and gives you the protection you need if you only need it for set periods.

Universal life insurance is also worth considering, especially if you want more flexibility, including using the cash value to pay for all or part of your premiums and having more choices in how the cash value can be invested.

A smart way to begin planning your investment: talk with Sim Gakhar. Gakhar has helped those in the Ontario, Canada, area work out a whole life insurance investment plan to suit their long-term needs, protect their family, or fit in with estate planning, inheritance, or charitable donation.

All it takes to get started building generational wealth today is a phone call (647-889-7290) or an email ([email protected]). Gakhar will be with you every step of the way as your plan for a secure and prosperous financial future.

 

FAQs & Helpful Resources Regarding Whole Life Insurance