5 Things To Watch Out for Universal Life Insurance | Life Insurance Canada
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- Опубліковано 16 вер 2024
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5 Things To Watch Out for Universal Life Insurance | Life Insurance Canada
What Is Universal Life Insurance? Universal Life Insurance Canada
Hey, if you are looking for a life insurance policy, maybe you were introduced to either term insurance or whole life insurance. However, maybe you want something on the permanent side but you are on a budget.
you might wonder, is there anything in the middle?
Something that gives you the protection of permanent insurance but is more cost-effective and flexible compare to whole life insurance?
And the answer is Yes, there is!
There is another option called universal life insurance.
In today’s video, I want to talk about what is universal life insurance in Canada, who is it for? And more importantly what is the proper way to set up the plan. so you’ll have a better idea if universal life insurance is right for you.
In Canada, when you are getting life insurance there are essentially two options. You can get a term that expires at a certain age, or you can get a permanent option.
The downside to any term life insurance is that they expire, usually at age 80 to 85 depends on the insurance provider.
That means you might get a nice lump sum of money if you do pass away before 85 - but what happens when you die?
There are a lot of fees, expenses, and more importantly taxes after death
And if your life insurance expires before you die then you have no guarantee that your costs are covered.
So in a sense, term life insurance is a temporary solution to a permanent problem. That’s why I want to tell you more about permanent life insurance.
When it comes to permanent life insurance, there are, once again, two options - whole life insurance and universal life insurance.
What is universal life insurance?
Universal life insurance is a form of permanent insurance that is ideal for people who want flexibility. It’s also ideal for young people who are a bit tight on budget but still want insurance.
In a nutshell, whole life insurance is like a piece of a property in the insurance world. It has more guarantees and you can predict the growth. However, it requires more capital and commitment. And the rate of return is relatively low as it depends on the company’s dividend scale.
Whereas universal life insurance is like investments in the insurance world.
That’s because you don’t just have the insurance, you also have a savings component. Therefore, it’s like a middle ground between insurance and investments.
You can control how much you want to put into the plan, and you have the options to not put it at all which I will explain it later.
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In the past 10 years, Thomas C Chan been focus on helping Canadians to develop for their financial success, with advice about investments and insurance, such as life insurance, critical illness insurance, and disability insurance.
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Awesome detailed video. Will have to watch it a few times for maximal benefit
Glad you like it vic!
Happy Sunday! 😊
Great information.Thanks for sharing
Thank you
Very informative video. I do have a question about accessing the cash value. Why is it accessed like a loan? If you have investment portion that is being funded, why is the withdrawal not free. Don't know if this makes sense.
Hello, excellent question.
So yes, you have 2 ways to access the saving portion.
1. You can simply withdrawal, just like any investment account. But it depends on how much you withdraw. The profit can be taxable.
2. Is to do a loan against it. Think of a line of credit.
Because it's a loan . It's not a profit nor income. So you get it tax-free. Yes, you have to pay the interest, so it depends on what your tax rate is at that time to see if it's worthwhile.
Another advantage is like
The analogy I used is a lot of people who buy real estate. But instead of selling the property. They will take out a line of credit against the house. So they are double dipping. (The appreciation of the property + the investment opportunity)
Very informative.. can you also do whole life insurance. Thanks
For sure Nishel
How's it going Thomas? I got a quick question for you. It's not about this video, but I've recently became monetized back in April so I guess it's not really all that recent, but I was just curious if you know how Google Adsense does their taxes? I guess is a way to put it. Do they send you out your tax information or do? Is this something you got to download? I wasn't able to find it. Maybe he can give me some input on this. That'd be great. Thanks a lot for your time. I really do appreciate it. I hope you have yourself a great day
Hi yes. So when you go to Google ad sense. They have bunch of information you need to fill in. (Sorry it's a while ago for me)
Then each year. They will mail you a us tax slip. And easiest way is take it to accountant.
@@ThomasCChan I really appreciate you getting back to me Thomas. Thanks a lot. And yeah I did all the AdSense information so I was just kind of curious if they do mail you out something or you had to print it off so I'm just kind of waiting till it gets mailed out to me. Thanks a lot. It really do appreciate it and I've started watching some of your videos. They're pretty good. Thanks again brother. Have yourself a great day
@Jay that drain guy good luck!
it can be difficult to avoid the anti-dump rule with UL, people need to understand it before committing.
Hi Thomas, if I have an UL, how do I know if my policy will pay the insured amount plus the cash value tax free to my beneficiary. You mentioned in your video that if I want to pay out the cash value tax free then I have to pay extra $2 to 5 more. Can you please describe the term for this extra payment to allow for the tax free payment of the cash value? Thanks.
In the policy statment or illustration. It will say death benefit only or dB plus fund.
I think the best way is send me your policy.
So we can go through it together.
Thomaschan@novellawealth.com
Or
www.thomascchan.com/thomas
Hi Thomas, thank you for all your great videos, I’m really enjoying them and getting educated from all your contribution. I look forward to meeting you someday soon here in Vancouver. My question is, in Canada is our death benefit payout different than in the USA. The reason I ask is because, the famous financial guru, Dave Ramsey, states that whole life insurance is an awful option because you only get one or the other forms of payout; death benefit or cash value. You on the other hand have said that with additional premium 2-5$ a person can receive both. Is this unique to Canadians? Could you please clarify. Thx
Hi Zuke. Excellent question.
1. The majority of the insurance is very similar in Canada or In US.
2. Yeah unfortunately that's a misconception. . You do get paid the death benefit covers both the cash value and original faceamount). I believe lots of videos covers that topic. What happen to the cash value when you pass away in a whole life insurance.
3. With that being said. This video is about universal life. And it's not whole life insurance.
Cheers!
Is Ivari life insurance a reliable insurance?
Hello. Ivari is a legit company with decent term and universal life products.
Please note that, however, 99% of the agents that sold ivari products are from WFG.
So the question is do you like the brand?
Cheers