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Deciding what type of and how much life insurance to buy depends on your responsibilities and your financial needs for the future. You can use life insurance to help protect your family and your hard-earned estate, to enhance your retirement income, and much more.
You are on: Protect Your Family
Your first priority is to help protect your loved ones. Life insurance is one of the most responsible decisions you can make to help ensure that your spouse, children or other loved ones can continue to enjoy the quality of life they deserve.
Our life insurance policies pay a tax-free(1) death benefit that your family can use to:
You are on: Protect Your Estate
If you've spent a lifetime accumulating your assets—not only for your own enjoyment, but for your loved ones as well, it's important to plan for what will happen to your estate after you die.
You are on: Enhance Your Retirement
If you're concerned about a shortfall in your future retirement income, you might want to consider the benefits of a universal life insurance policy.
Universal life insurance can provide the insurance coverage you need, control over your investments to help you achieve the growth you're looking for, and tax-preferred investment attributes that few other investment options provide. You decide how much insurance coverage you need and how much you can contribute to your investment account, and you pay that amount. Provided certain conditions are met, your investment account income can grow tax-free(2).
Disclaimer: This material provides only a general overview of how universal life insurance can be used to enhance retirement income. We recommend that you consult a qualified tax professional when doing your planning for retirement.
You are on: Fund an Education
In most cases, a Registered Education Savings Plan (RESP) is the preferred way to save for a child's education. Any growth of the money invested in a plan is sheltered from tax until the funds are withdrawn. When the money is withdrawn, the growth is taxed at the student's tax rate, which is likely to be lower than the tax rate of the parent, grandparent or other person who invested in the plan.
However, the amount of money that can be invested for any one child in RESPs is limited. As a result, many people also look to universal life insurance.
When money is deposited into the investment portion of a universal life insurance policy, its investment growth is sheltered from tax. To take advantage of this, a parent or grandparent can purchase a policy on the life of a child and contribute to the policy until the child turns 18 (or 19 in some provinces). At that time, the parent or grandparent can transfer ownership of the policy to the child, with any taxes on investment growth deferred until the child withdraws the funds.
With proper planning, there should be enough invested in the policy to pay the premiums on an ongoing basis after the transfer. In addition, the student can use the funds in the investment portion to pay his or her educational costs. Like an RESP, these withdrawals will be taxed at the student's lower tax rate.
You are on: Access Cash
Universal life insurance can be a powerful financial tool because of its investment component. As needed throughout your lifetime, you can choose to access the money you’ve accumulated under your universal life insurance policy—known as the accumulation value—to meet cash flow needs during retirement, at a time of illness and more.
There are a number of ways you can access your policy's accumulation value at RBC Insurance:
A licensed RBC Insurance® advisor can provide advice to help you choose the life insurance plan that’s right for you.
1) Note that probate fees are applicable if you have not designated a beneficiary and the proceeds of your policy become part of your estate.
2) Current tax laws limit the maximum amount of money that can be used to fund a tax-sheltered insurance policy.
3) If the policy loan amount exceeds the adjusted cost base of the policy, the excess amount is taxable.
See how affordable a term life insurance policy can be by getting an online quote.