Why Whole Life insurance might deserve a place in your financial plan

When it comes to building a solid financial plan, insurance often isn’t the first piece that comes to mind. It should be part of the picture, as securing your future means more than just saving or investing.

“The right insurance is a cornerstone of any successful plan,” says Dean Chambers, VP and chief life operations officer.

As Canadians consider how to protect what matters most, Mr. Chambers says they’re seeking versatile financial tools. Whole Life insurance is an option worth a closer look.

“It can be used in tandem with tax planning to transfer assets between generations, to support the income loss of a family member or to be a financial asset in a diversified portfolio.”

Major life events – such as the birth of a child, starting a business or planning for retirement – can nudge people to think more deeply about insurance. Taking care of loved ones is a main motivation, but it doesn’t have to be the only one. As Mr. Chambers notes, Whole Life isn’t just about what happens after you’re gone. “It’s also about supporting your financial security while you’re here.”

Whole Life insurance differs from term insurance, which is less expensive initially but expires after a set period. In contrast, Whole Life provides lifelong coverage and a range of financial benefits.

Both can play a role, says Mr. Chambers. “With appropriate planning, you wouldn’t choose one type of insurance product over another. Instead, you’d insure different needs with different products.”

Term life insurance can be used for a higher coverage need that’s also temporary, such as protecting a $500,000 mortgage balance. That would be a significant financial burden for a family if an income earner passed away. Whole Life insurance premiums are higher than with term life insurance, but the product offers lifelong coverage and builds cash value, which can be a valuable financial asset.

With Participating Whole Life insurance, policyholders also share in the profits of the insurer’s participating account through annual dividends. Those dividends can be paid in cash, left on deposit to earn interest or used to increase coverage.

“That enables Participating Whole Life to play an essential role across all of the key areas of financial planning,” says Trevor Rachkowski, VP, Sales & Distribution.

In addition to protecting against life’s uncertainties, it offers an additional source of tax-deferred growth, especially when RRSPs, TFSAs and RESPs are maxed out. It may also provide corporate tax advantages through the capital dividend account.

For company owners, Participating Whole Life helps ensure business continuity, while also offering access to capital, tax planning advantages and financial diversification. And the cash value can enhance creditworthiness, aiding in financial management.

For many policyholders, Mr. Rachkowski says the appeal comes down to flexibility and peace of mind, knowing their plan can adapt to life’s changes.

How do you know if Participating Whole Life insurance is right for you? It’s not just about your age or income, but your goals.

Consider: Do you need lifelong protection? Are you looking for cash value? Are you thinking about tax and estate planning? Want to leave a guaranteed inheritance? What level of premiums can you afford? A financial advisor can help you figure out where this insurance fits within your bigger plan.

While some people believe that the cash value of this type of policy grows slowly, Mr. Rachkowski says that it can provide stable, tax-deferred growth and be a reliable source of funds. You can borrow against it for emergencies or everyday needs.

“Participating Whole Life insurance isn’t just about making sure your family is protected but about building a stronger financial foundation for whatever comes next.”

Discover how Participating Whole Life insurance can add stability and flexibility to your financial plan. Talk to a broker to learn how it can fit your life.

Advertising feature produced by Globe Content Studio. The Globe’s editorial department was not involved.