Compare the best universal life insurance quotes in Canada

Universal life insurance is more flexible than whole life insurance, with greater customization of your investment mix. While whole life insurance is also a permanent life insurance policy, it’s a simpler product with cheaper premiums. Here are are the three main differences between whole life insurance and universal life insurance:

1. Premiums (or investments): A whole life insurance policy generally guarantees steady premiums for life. This is a benefit over term life insurance, which increases in cost with age. Universal life insurance, however, doesn’t have steady premiums, and the policyholder can invest as much or as little as they want, as long as the regular deductions are covered.
2. Death benefit: Whole life insurance generally has a set death benefit, being the amount of money your beneficiary receives when you die. Because the regular deductions of universal life insurance can change over time, the death benefit can too. Generally, there is a lot of flexibility around the death benefit of a universal life insurance policy, and it can be negotiated with the insurance company.
3. Investments choice: Both universal and whole life insurance have investment components, but they don’t offer the same control over the investment mix. In whole life insurance, your cash value becomes part of a larger investment mix of the life insurance company, and you cannot control the investment mix. Universal life insurance lets you control where you invest your money.

For more information, check out our dedicated article on whole life insurance vs. universal life insurance.

Universal life insurance isn't for everyone, as it can a more complex and expensive product than someone needs. Premiums are more expensive than term or whole life insurance, mostly due to higher administration fees. Universal life insurance also requires regular attention from policyholders, so make sure the investment mix still suits their needs. Universal life insurance also comes with the risk that investments may drop in value over time.

Universal life insurance is an incredibly powerful and flexible product, but it gets very complicated, very quickly. If you're considering universal life insurance coverage, I'd recommend taking the time to make sure it's right for you.

Think about it - term life insurance is literally a temporary policy, only lasting for a given term. Universal life insurance, on the other hand, is a permanent policy, that will last your entire life. Getting the right policy from the right provider is important!

Is universal life right for you?

One of the main things to consider is whether you can truly take advantage of the advantages of universal life insurance. These include:

• Flexible investment options
• Tax-sheltered growth
• Premium flexibility

The trouble is, these benefits really only pay off properly with a healthy account value. If you have enough money to invest, the investment options of universal life insurance give you some great alternatives to typical investment products. Similarly, the tax benefits of universal life insurance will help you most if you're a high-income earner, paying a higher rate of income tax.

You should definitely consider universal life insurance if you have enough wealth to take full advantage of these benefits. Remember that you'll also need the time to manage the policy - or you'll need to be able to pay someone else to do it.

If you’re after a simpler or cheaper form of life insurance, you might want to consider whole life insurance or term life insurance instead.

The bottom line

Universal life insurance is an important policy to exist in the Canadian market, but it's a very specific tool for a specific need. If it's right for you, then it's a great way to grow your wealth while providing for your family. Compare life insurance quotes today to find a great policy.