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Whole life insurance is one of the life insurance options available in Canada. Is it right for you? Find out how it works and how it differs from term life insurance.
Whole life insurance is a permanent form of life insurance. As long as you pay your premiums, you will be covered and your beneficiary will receive a tax-free lump-sum benefit when you die. The advantage of whole life insurance is that it also has cash value, like an investment, that builds up over time. That amount can be paid to you if you decide to cancel the policy, or it can be passed on to your estate when you die.
Premiums on whole life insurance remain the same for the entire time the policy is in place. The payments tend to be more affordable the younger you are when you purchase a policy. Having said that, the premiums are significantly higher than what you’d pay for term insurance, and the payout can be lower than that of term insurance.
Example: “I’m looking at getting whole life insurance because I’ll be covered for my entire life.”
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