Build a Legacy That Lives On
Permanent life insurance is more than just a safety net, it’s a powerful tool for long-term planning, wealth transfer, and tax-efficient growth.
Permanent life insurance provides lifetime coverage and a tax-sheltered savings component known as cash value. It’s designed to protect your loved ones while building long-term value you can access during your lifetime.
There are three main types:
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Whole Life:
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Participating Whole Life (PAR)
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Universal Life (UL)
Permanent Life Insurance is ideal for:
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Leaving a tax-free legacy
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Funding estate taxes and final expenses
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Building corporate wealth using retained earnings
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Accessing cash for retirement, business needs, or emergencies
Why Permanent Life Insurance Is a Smart Long-Term Strategy
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Lifetime coverage: You’re protected for life, not just a term
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Cash value growth: Builds over time, tax-deferred
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Access to funds: Withdraw or borrow when needed
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Level premiums: Predictable costs, especially with Whole or PAR
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Estate planning: Pay final taxes and transfer wealth efficiently
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Corporate use: Funded with retained earnings, creating off-balance sheet value
Is Permanent Life Insurance right for you?
Consider permanent life insurance if you:
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Want coverage that lasts a lifetime
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Have maxed out RRSPs and TFSAs and are looking for tax-advantaged growth
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Own a business and want to use retained earnings effectively
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Need a strategy to pay estate taxes or leave a lasting legacy
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Want flexible access to cash for opportunities or emergencies
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Whole Life: Guarantees fixed premiums, fixed cash value growth, and a guaranteed death benefit.
Participating Whole Life (PAR): Similar to Whole Life but offers the potential for dividends, which can increase the death benefit and cash value.
Universal Life (UL): Offers flexible premiums and customizable investment options, allowing for more control and potential growth, but with more risk.
Yes. You can withdraw or borrow against the cash value. It’s a valuable source of liquidity for retirement, emergencies, or business opportunities. Keep in mind that withdrawals may reduce your death benefit.
It costs more upfront, but it offers lifelong protection, tax-deferred growth, and wealth-building potential. Over time, it may provide more long-term value than term life, especially for estate or business planning.
Absolutely. Corporate-owned life insurance is widely used to build cash value using retained earnings and to fund buy-sell agreements, key person protection, or tax-efficient shareholder wealth transfer.
- With Whole Life or PAR, your beneficiary typically receives the death benefit only.
- With UL, some policies allow both the death benefit and accumulated value to be paid, depending on how the policy is structured.
No, the payout is tax-free to your beneficiary. For corporate policies, the death benefit (minus ACB) can usually flow through the Capital Dividend Account (CDA) tax-free to shareholders
Still Have Questions?
Disclaimer: The information contained in this article is provided for general informational purposes only and does not constitute financial, legal, tax, or investment advice. While we strive to ensure that the content is accurate and up to date, Safe Horizon Financial makes no guarantees regarding its applicability to your individual circumstances. Readers should consult qualified professionals (such as a licensed financial advisor, accountant, or lawyer) before making decisions based on the information presented. Safe Horizon Financial is not responsible for any actions taken or not taken as a result of this content.