Universal life insurance can be a great tool for your portfolio. A portion of the monthly premium payment will be going into savings. That savings account allows consumers to grow their money at a higher rate than the general market, therefore allowing them to invest and help expand their portfolio. This is the major appeal of universal life insurance.

Universal life insurance is a great way to build upon a portfolio while also ensuring your family is protected by traditional life insurance.

How Does Universal Life Insurance Work?

Universal life insurance is a savings pension that utilizes guaranteed cash value. This cash value is financed with an internal rate of return on the assets invested.

For example, an insured man who was 61 years old, and insured for a $250,000 policy would pay $12,600 in premiums a year. $4,240 of this total is composed of a guaranteed interest rate. The remaining $8,360 are premiums paid into the investment account. This premium amount will change as the insured ages. An income is also paid by the insurance company annually. This allows the insured man to live off the income from his universal life insurance policy.

At the end of his retirement, his universal life insurance policy will have more than $500,000 in it. This money can be withdrawn, or it can be used as part of the estate to help fund children’s’ or grandchildren’s college education, etc.

Universal life policies are generally considered more complex than other types of life insurance policies. You’ll need to research the policies before purchasing them so you can ensure you purchase the best product for your situation, as well as one that fits your vibe.

Universal vs. Term Life Insurance?

Universal and term life insurance are the two major categories of life insurance policies that are available on the market. Universal insurance is an investment whereas term insurance is pure insurance.

Universal life insurance policies are considered hybrid policies. They are a combination of both universal and term life insurance policies, providing emotional security, and financial wealth accumulation. Coverage under universal life insurance is generally more flexible than coverage under term life policies.

Term life insurance is simple insurance. Your death benefit is fixed. You pay a premium until the term ends, and if nothing happens, you keep your money. If you die, your beneficiaries get a death benefit. You may have a cash value component, but frankly, most people do not choose for that to be an option.

Universal life insurance is generally more expensive than term life insurance. If you are younger, you will likely pay lower premiums for the same term as someone older would. If you are older, you will likely pay higher premiums for the term than someone younger would. This is due to the probability that your death benefit will be greater when you are older. That’s why people generally prefer term over universal life.

Universal life insurance is also very flexible. You can even stipulate how the death benefit payout should be split among beneficiaries. You can split it at a percentage of your policy, or you can split it in a specific way.


Choose best life insurance in Canada to secure your financial life and get the growth opportunity. Universal Insurance will empower you to grow your passive income through your savings and enjoy financial freedom and security along with your life.