What is permanent life insurance?

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It’s a type of life insurance that gives you lifelong coverage to protect your loved ones. This means that your coverage never expires, no matter your age, health, or history. Your loved ones are guaranteed a death benefitDeath benefit whenever you pass away, provided you’ve paid your premiumsPremiums. And over time, your policy can grow in value too.

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Benefits of permanent life insurance

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Cash value

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Some permanent life insurance plans also come with a cash value, a tax-preferred savings portion. Borrowing or withdrawing funds from your cash value may reduce your policy’s death benefit.

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Lifelong coverage

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You’ll get lifetime insurance that never expires.

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Premiums that won’t change

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Most permanent life insurance premiums don’t increase from the time you first buy the policy. And some permanent insurance plans guarantee that you’ll only pay the premiums for a limited time.

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Tax-free death benefit

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Your beneficiaries get the money from the death benefit to use in any way they want.

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Frequently Asked Questions

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How does permanent life insurance work in Canada?

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In Canada, permanent life insurance gives you coverage all throughout your life. Your beneficiaries will get a tax-free payment after you die. Some of our permanent life insurance policies can also help you build up a cash value.

How does cash value work in a permanent life insurance policy?

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Cash value is a savings portion within your policy that earns interest. You can borrow or withdraw from it. But there may be tax implications if you withdraw or borrow from your cash value.

How old do I have to be to apply for permanent life insurance in Canada?

Canadian residents can apply for permanent life insurance at age 16 (unless you live in Quebec). Anyone under age 16 can still be named as an “insured person” under a policy. But the policy owner must be at least age 16 (unless you live in Quebec). For example, a parent can buy a policy for their children.

 

What’s the difference between permanent and term life insurance?

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The main difference is that permanent life insurance offers lifelong insurance coverage. Term insurance covers you for a specific number of years (e.g., 10, 15, 20, or 30 years).

Both term and permanent life insurance will give your beneficiaries a payment after you die. But with a term policy, your beneficiaries won’t receive any money if you die after your term policy expires.

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When can you take cash out of a permanent life insurance policy?

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You have three options to take cash out of your permanent life insurance policy:

1. Cancel your policy and receive any cash value, if any. Your life insurance coverage will end, and some or all the money you receive may be subject to tax.

2. Withdraw part of your cash value at any time. This may reduce your policy’s death benefit meaning there will be less money for your beneficiaries after you die. There can also be tax consequences if you access your policy’s cash value.

3. Borrowing against your cash value. If you take out a loan against your cash value, interest will be charged. You can repay the loan at any time. If you don’t, the loan amount plus interest will be deducted from the death benefit at the time of death.

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Does permanent life insurance expire?

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No, a permanent life insurance policy doesn’t expire and will last your entire life as long as your premiums are paid.

How long do you have to pay for permanent life insurance?

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It depends on the type of permanent life insurance policy you get. Some policies give you the option to pay for life (age 100). Other policies require you to pay premiums only for a specific amount of time.

 

Will my premiums remain the same as I age?

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With most types of permanent life insurance, your premiums are guaranteed to remain the same throughout your life.

 

Will I have to answer questions about my health when I apply for permanent life insurance?

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Most of our permanent life insurance plans require you to answer health questions and provide medical information.

 

Will I have to go through underwriting when I apply for permanent life insurance?

 

Most permanent life insurance plans require you to go through insurance underwriting.