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Hi I'm Mark Spokesperson for LSM Insurance Whole life insurance, as the name implies,
provides coverage for your entire lifetime. Whole life policies can be divided into two
categories: participating and non-participating. Both policies provide level premiums, lifetime
protection and a guaranteed cash value—but participating whole life plans pay an annual
dividend. The annual dividend is NOT guaranteed, and in most instances is linked to long-term
interest rates as well as the insurance company’s performance. If you have an existing participating
whole life policy which was purchased in a high interest environment, it is a good idea
to request an updated policy illustration—the projected values may have changed dramatically.
Most participating whole life policies have multiple dividend options. The following is
a brief look at some of the different dividend options:
Dividends on deposit – the annual dividend is kept on account within the policy
Paid-up additions – the annual dividend is used to purchase additional paid-up insurance
Premium reductions – the annual dividend is used to reduce the annual premium
Term option – the annual dividend is used to buy paid-up term insurance
For more details on Whole Life Insurance in Canada contact us at 1.866.899.4849