January 16th, 2012 | Author: Mitch Reynolds

Universal Life Insurance Video – What is Universal Life Insurance

Canada’s Best Video about Universal Life Insurance

This short video gives you an excellent overview of how universal life insurance works. Learn about the self directed investment fund inside of universal life insurance called the policy fund or cash value. Learn how you can grow an investment fund inside of a life insurance policy free from income tax while your funds remain invested inside the policy.

There are also 3 ways to get your money out of a universal life insurance policy while you are still alive. We show you which option is the most tax efficient and best for retirement planning.

We hope you enjoy this three and a half minute video.

Transcript of What is Universal Life Insurance?

Universal Life insurance – The most flexible form of permanent life insurance in Canada today.

With Universal life, you can get lifetime risk protection within a very tax efficient investment account.

Under one side of the umbrella, you have permanent life insurance — you pay only for the pure cost of risk protection.

On the other side is a tax sheltered self directed investment portfolio, very much like a mutual fund or RSP plan.

Is Universal Life Insurance is a good product for you? The answer may be yes if…

you have a need for permanent risk protection, for your estate or legacy giving

you’re already maximizing some of your tax sheltered investments like RSPs and are looking for tax efficient ways to invest

If you’re approaching retirement and need to begin estate planning

or if you are financially secure and can commit to a long term financial plan.

How does Universal Life Insurance work?

You pay a premium into the plan — a prescribed amount usually much higher than the pure cost of the insurance.

The extra money over and above the cost of insurance goes into a self directed investment fund called the policy fund, or cash value.

This fund compounds and grows over time inside a tax sheltered investment environment and growth is not taxed by the government.

At some point in the future there may be enough money built up inside the policy fund that your premiums would be paid for with the interest.

You can continue to let your cash value grow and build inside the tax efficient environment,

Then upon death, the entire cash value which has been growing in a tax sheltered environment coverts into a tax free death benefit and is added to the amount of insurance you already purchased.

There are three ways you can use that tax sheltered cash value inside the Universal Life Insurance plan during your life…

You can withdraw money, in which only the growth portion of your fund would be taxable.

You can leverage against the policy by borrowing funds against it. The borrowed money is not taxable, but interest will be charged which impacts the ultimate death benefit of the policy

Or you can ultimately collapse the policy. The entire cash value is then returned to you and the growth portion would be taxable.

You can also let your policy grow and compound with time to create a much larger estate for the next generation or a legacy gifting plan for a charitable organization you wish to support.

Universal Life Insurance is a high performance, high maintenance insurance plan. If you need permanent life insurance… if you’re looking for a tax efficient or tax sheltered ways to invest… and you like to manage your money, this could be a perfect plan for you.

It’s also a great way of creating tax free income for your retirement.

Contact us at life Guard Insurance to find out more about Universal Life Insurance for your investment and insurance needs. Get started by clicking below to receive your free instant life insurance quote now.

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