InsuranceINTEL’s market watch shows that permanent life insurance products are as dissimilar as apples and oranges. After analyzing your client’s needs, you decide that permanent coverage is the best option. You then face a seemingly simple choice: Whole life or universal life? In fact, there is a multitude of features you need to take into account, making the decision much more complex. 

Whole life (WL) insurance can be participating or non-participating. Insurance Portal’s sister company InsuranceINTEL has produced a chart for each of these product types. Both forms of WL offer lifetime insurance protection in return for a guaranteed level premium paid for life, and both participating and non-participating WL offer cash values.

Unlike non-participating WL, participating WL has a participating account managed by the insurer. The insurer redistributes a portion of its profits, in the form of dividends, into this account. These dividends can be used to increase the cash value of the insurance or the insurance amount. 

Although many providers offer a WL insurance product, the accelerated payment features are where competition heats up. All 11 carriers on the market allow the insured to pay off the policy in 20 years. Several offer shorter payment periods. The vast majority of insurers also permit accelerated payment in 10 years. Empire Life and Sun Life offer the 8-year payment option. Desjardins Insurance has just launched a product that is payable in five years. 

The non-participating whole life market is also 11 insurers strong, including La Capitale and SSQ Insurance. La Capitale has been integrated into Beneva, which expects to have completed the integration of SSQ by January 1, 2023. Competition is less fierce for accelerated payment. No insurer permits payment in less than 10 years. 

Non-participating life insurance does not include a dividend account. However, it does offer cash values, as does participating whole life. In most cases, the values are available to the insured on the policy’s 10th or 11th anniversary. BMO Insurance stands out with a product whose values are accessible as early as the first anniversary of the policy. Sun Life offers a product whose values are accessible as of the third policy anniversary. Next are Desjardins, La Capitale and Manulife, whose products provide access to values as early as the fifth anniversary.

Universal life: Two versions 

Universal life insurance can be either yearly renewable term (YRT) or level COI (InsuranceINTEL has produced one table that covers both of these types of universal life). In all cases, the UL insurance policy includes an accumulation fund. The investments can be indexed, interest bearing or linked to actively managed funds. 

As with whole life, the premium payment method has ignited insurers’ creativity. In its YRT version, UL is often payable up to age 100. YRT is a one-year term insurance cost that increases each year. The goal is that the growth of the policy’s accumulation fund will allow the carrier to absorb the increase in the cost of insurance. Many insurers offer other terms, including YRT payable to age 85. 

Of the 11 providers of UL insurance products, all offer the 100-year level cost of insurance. Accelerated level payment is also available with some insurers. For example, Canada Life and Sun Life offer accelerated payment periods of 10, 15 or 20 years. iA Financial Group offers accelerated payment in 15 years. 

Simplified versions 

InsuranceINTEL has also compiled a table on permanent life insurance that includes both simplified and guaranteed issue products. All of these products are whole life. The table includes insurers that are not present in the traditional whole life market: Canassurance Blue Cross and Canada Protection Plan. Seven other providers also serve this niche. 

Guaranteed issue insurance lets people who are hard to insure due to a medical condition obtain coverage. Simplified issue insurance lets clients obtain coverage without having to undergo an examination or fluid collection. There are also fewer medical questions to answer than with traditional products. Many products offer guaranteed cash values.