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Whole Life

What is whole life insurance?

Whole Life insurance as the name implies covers you for the ‘whole’ of your life and not for a specific term only. Your death benefit and premium would usually remain the same. Whole life insurance also builds cash value, this is a return on a portion of your premiums that the insurance company invests. Your cash value is usually tax-deferred until withdrawal.

Are there various types of whole life insurance?

Yes, the most common include traditional, interest-sensitive, and single-premium whole life insurance policies. A traditional whole life insurance policy gives you a guaranteed minimum rate of return on your cash value portion. An interest-sensitive whole life insurance policy gives a variable rate on your cash value portion. Single-premium is for someone who has a large sum of money and would like to purchase a policy up front. Like other whole life insurance options, single-premium whole life insurance accrues cash value and has the same tax shelter on returns.

What are the benefits of choosing a whole life insurance policy over other types of life insurance policies?

Unlike term life insurance, a portion of your premium money goes toward your cash value which in turn could pay off your entire policy only after a few years. Also, your premium will remain constant during the time you are covered unless you choose otherwise. And, unless you make a change to your whole life insurance policy, you have lifelong coverage with no future medical exams. Whole life can also a good choice because of the potential for tax savings.

Life Evolution Series

The Life Evolution Series, a whole life product, merges life assurance, health insurance and investment in a unique combination that guarantees your ability to cope with life's challenging changes.

Tax Implications

  • Registered - Contributions are tax deductible up to a stated maximum of $25,000. Also, in a measure to encourage savings for retirement, there is no income tax on investment returns for retirement purposes.
  • Unregistered - Contributions are not tax deductible. Investment returns are taxed as per usual investment gains.

Accessibility to funds

  • Registered - Funds cannot be touched before retirement without consequences. You can surrender the policy, however, 25% of the proceeds of the surrendered policy is deducted as Government tax. Registered Annuities cannot be used as collateral.
  • Unregistered - You can access funds at any time, unless otherwise stipulated by the terms and conditions of the product/insurer. Unregistered Annuities can be used as collateral.


  • Registered - Regulatory authorities regulate and closely monitor the types of investments in which funds are deposited . Deposits are usually invested in the more conservative instruments.
  • Unregistered - Deposits can be invested in any investment instrument including ‘risky’ instruments, which usually result in higher investment returns.


  • Registered - At retirement a lump sum equivalent to 25% of the fund is available in cash, tax free. The reminder is used to purchase an annuity or the entire (100%) fund can be used to purchase an annuity.
  • Unregistered - At retirement 100% of the fund can be taken in cash or used to purchase an annuity. You can also select to take a percentage in cash and use the remainder to purchase an annuity.

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