Participating life insurance provides lifelong coverage that pays a tax-free benefit to your beneficiary when you die. As long as you pay your premiums your policy is guaranteed to grow in cash value (the value of the insurance policy that you can access as cash).

How does participating life insurance work?

Policy payments (premiums) are combined in a separate account with other policyholders. This is called the participating account.

What are the benefits of participating life insurance?

The benefits of purchasing participating life insurance include:

• The funds are professionally managed,
• It provides a tax-free payment for your beneficiaries,
• Lifetime financial protection: as long as you pay your premiums your coverage will never expire,
• Cash value growth, and
• A chance to earn policy dividends.

Dividends

A dividend is portion of a policy account’s profits that is shared with policyholders. Dividends are not guaranteed but instead are based on the participating account’s performance. Dividend payment amounts are usually calculated every year. The policyholder can use the money in different ways, such as

• A cash payment
• Create a separate account that earns interest
• Purchase additional coverage within their policy
• Reduce premiums

For more information on life insurance, contact an insurance provider or visit canada.ca.

								
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