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Benefits of Universal Life Insurance

A flexible solution that offers the security of lifetime coverage and tax-effective investing to help you protect your assets and your loved ones for the long-term.

Lifetime Coverage

With universal life insurance, you have permanent coverage for life—your coverage does not end after a certain period.

Tax-Advantaged Investing

A portion of your premium purchases your insurance, while the rest earns interest that is not taxable while it remains in your policy.

Access to Funds

Throughout your lifetime, you can access the funds in your policy to supplement your income in retirement or during a time of illness.

Estate Planning

The unique features of universal life insurance make it an ideal way to protect your assets and pass them on to your beneficiaries.

Plan Details

RBC Universal Life Insurance Plan

One of the top advantages of RBC Universal Life insurance is its flexibility—your coverage and premiums are customizable now and into the future.

Highlights

  • Lifetime Coverage: Coverage is for life and cannot be cancelled or changed
  • Tax-Free Benefit: Your beneficiary or estate receives the death benefit tax-free1
  • Death Benefit Options: Choose from a level protection or increasing protection death benefit option, based on your needs
  • Flexibility: Choose how much to pay into your policy and how you want to pay your premiums
  • Range of Investments: Create the portfolio that is right for you with a range of investments called interest options and your choice of two plans—one with bonus interest, one without

  • Tax-Effective Investing: The interest you earn is not taxable, which can help you grow your money faster
  • Access to Your Money: Use the cash value you’ve accumulated in your policy to supplement your income in retirement or during a time of illness
  • Living Benefits: A compassionate advance and a disability benefit can provide valuable protection while you are alive
  • Single or Joint Coverage: Choose coverage for yourself only, for yourself and your spouse, and/or for other family members
Compare the Plans

The Right Choice If You

  • Are a Canadian citizen or a Permanent resident/landed immigrant who have been in Canada over 12 months
  • Are from age 0 to age 85
  • Want permanent life insurance coverage
  • Are financially secure and want to grow your wealth
  • Contribute the maximum to your RSP
  • Are nearing retirement and want to preserve your estate

To apply, you will most likely need to complete a medical exam and answer health questions.

What's Covered?

Death Benefit

If you die during the time period when coverage is in effect, your beneficiaries or estate can receive the death benefit tax-free.1 You can choose from two death benefit options:

  • Level protection pays a death benefit equal to either your coverage amount or the amount accumulated in your policy, whichever is greater.
  • Increasing protection pays a death benefit equal to your coverage amount plus your accumulation value.

Note: If your needs change, you may switch your death benefit option at any time after the second policy year.

You can also choose between single life insurance coverage (for example, for yourself only) and joint coverage on the lives of several people. With joint coverage, you have two options:

Note: If your needs change, you can change your coverage option from joint first-to-die to joint last-to-die any time after the fifth policy year.

Disability Benefit

Payable from your policy’s accumulation value in the event of illness or accidental injury, the disability benefit is payable once a year for as long as you (or another insured, under a joint policy) are disabled.

Compassionate Advance2

Should you become terminally ill, you can request an advance of up to 50% of your policy’s death benefit, to a maximum of $250,000.

Optional Coverage3

  • Additional Term Insurance: Add this option at any time, for no extra policy fee, if you need affordable coverage for temporary needs like insuring a business loan or mortgage.
  • Children's Term Rider: Provides term life insurance coverage for your natural or legally adopted children.
  • Accidental Death Benefit Rider: Pays an additional death benefit if you die as a direct result of an accident.

  • Total Disability Waiver of Deductions Benefit Rider: After being totally disabled for six consecutive months, we will the payment of cost of insurance deductions, including the policy fee and rider premiums while you are totally disabled.
  • Payor Death and Disability Waiver of Deductions Benefit Rider: If someone else pays your premiums and he or she dies we will waive monthly premiums while policy is in force or if he or she becomes and remains totally disabled for six consecutive months, we will waive the payment of cost of insurance deductions, including the policy fee and rider premiums while this person is totally disabled.

The information above is intended as a summary only. Please see a sample riders policy for complete details on rider and optional coverage terms and conditions, including benefits and exclusions.

Summary of Exclusions4

  • During the application process, if we are given incorrect or incomplete information regarding age, gender, health, lifestyle or smoking habits, we reserve the right to deny or adjust your benefit.

  • During the first two years of coverage, if death is due to suicide, then no benefit is payable.
  • During the application process, if we are given incorrect or incomplete information regarding age, gender, health, lifestyle or smoking habits, we reserve the right to deny or adjust your benefit.
  • Four definitions of disability are recognized for coverage under the disability benefit; additional exclusions apply.
  • Other exclusions may apply depending on optional benefits chosen.

The information above is intended as a summary only. Please see the sample policy for RBC Universal Life or RBC Universal Life with Bonus Interest for complete details on terms and conditions, including benefits and exclusions.

About Your Premiums

If you don’t smoke, lead a healthy lifestyle and have a positive family history, you may qualify for discounted preferred rates.

RBC Universal Life insurance allows you to choose how much premium you want to contribute, as long as it is above the minimum required to keep your policy in force and below the maximum set to keep your policy tax exempt. (The minimum is specified in your policy; the maximum changes annually based on your policy’s accumulation value.)

You can also choose the timing and allocation of premium payments, and how your money will be invested.

After deducting a premium tax from each premium payment, we direct the balance to your policy’s interest options. Every month we deduct enough to cover the cost of insurance and a guaranteed policy fee of $10 per month.

You can choose from these payment options:

  • Annually Increasing Cost of Insurance is the “pay as you go” option. It has lower costs at the start, so more of your premiums go towards the plan’s accumulation value. This is a great option if you want to build the policy’s accumulation value and take advantage of your tax-deferral opportunity.
  • Level to 100 Cost of Insurance is the “pay in advance” option. It locks in a fixed minimum premium for the life of the policy. This might be the right option if you have less time for wealth accumulation and are more focused on maximizing the policy’s death benefit for estate planning purposes.
  • You can also “have it both ways” by using the Annually Increasing option to build your policy’s accumulation value in the early years, and then change to the Level to 100 option any time after the second policy year. This change will increase your premiums, since your new insurance rate will be based on your age when you make the change.

You may pay for your policy on a monthly or annual basis.

Interest Options for RBC Universal Life Insurance

With RBC Universal Life insurance, you can choose from a wide range of interest options to meet your investing goals. The interest options you choose become accounts under your policy to which you allocate all or a portion of your premiums for the purpose of earning interest.

Choose from a Range of Interest Options

A licensed RBC Insurance® advisor will help you choose the right interest options to meet your needs and review your profile annually to make sure your needs continue to be met.

This option offers the lowest risk and, typically, the lowest rate of return. It is recommended as a place to hold your money for a short time until you decide how you want to allocate your premiums.

These options guarantee a fixed rate of return. These may be ideal if you want a secure investment with a minimum interest guarantee, and are able to invest for a specified term.

Our guaranteed interest options include:

  • Mid-Term Portfolio Option
  • Long-Term Portfolio Option
  • Guaranteed Interest 1-Year Term Option
  • Guaranteed Interest 3-Year Term Option
  • Guaranteed Interest 5-Year Term Option
  • Guaranteed Interest 10-Year Term Option

Variable interest options give you the opportunity to earn market returns without directly investing in the underlying index or mutual fund. These options have a return linked to a Canadian, U.S. or international equity index or to a professionally-managed RBC® mutual fund or portfolio. Because values can fluctuate, these options may be most suitable if you have a longer time horizon for wealth accumulation. Additionally, currency exchange rate fluctuations can have an effect on your returns if you choose a variable interest option that is linked to an index or fund with a foreign component.

We offer the following variable interest index options and variable interest fund options:

Index Options

  • Canadian Equity, linked to the S&P/TSX 60 Total Return Index
  • Canadian Financial, linked to the S&P/TSX Capped Financials Index
  • Canadian Energy, linked to the S&P/TSX Capped Energy Index
  • American Equity, linked to the S&P 500 Total Return Index
  • European Equity, linked to the S&P Europe 350 Total Return Index

Fund Options

  • RBC Select Conservative Portfolio
  • RBC Select Balanced Portfolio
  • RBC Select Growth Portfolio
  • RBC Select Aggressive Growth Portfolio
  • RBC Canadian Short-Term Income Fund
  • RBC Bond Fund
  • RBC Global Bond Fund
  • RBC Global Balanced Fund
  • RBC Balanced Fund
  • RBC Balanced Growth Fund
  • RBC Canadian Equity Fund
  • RBC Canadian Dividend Fund
  • RBC North American Dividend Fund
  • RBC North American Growth Fund
  • RBC O'Shaughnessy All-Canadian Equity Fund
  • RBC U.S. Equity Fund
  • RBC O'Shaughnessy U.S. Value Fund
  • RBC U.S. Mid-Cap Equity Fund
  • RBC Global Dividend Growth Fund
  • RBC O'Shaughnessy International Equity Fund

Grow Your Accumulation Value Even Faster

To meet your needs, RBC Universal Life insurance is offered in two versions:

RBC Universal Life Insurance with Bonus Interest offers an effective annual rate of 1.5% of the policy’s accumulation value. This bonus is guaranteed to be credited with no pre-conditions whatsoever. Best of all, there's no waiting—we start crediting bonus interest in the first month of your coverage. This option could be ideal if you are investing primarily in guaranteed interest options and expect bond rates to rise significantly.

RBC Universal Life Insurance offers lower daily management fees for this plan’s interest options, resulting in a higher credited interest rate. This option could be ideal if you are investing primarily in variable interest options and would benefit from lower daily management fees.

Universal Life Rates of Return

Check the rates of return for investments under RBC Universal Life insurance.

View Rates of Return

Maxim, Mentor, Maxinvest and Maxivu Information

Do you have an existing universal life insurance policy from RBC Insurance® that is invested in Maxim, Mentor, Maxinvest or Maxivu segregated funds? You can access fund facts, financial statements and more below.

Please note: These investments are no longer options for new policies.

Universal Life Insurance FAQs

Find answers to your questions about our universal life insurance product.

The answer to this question depends on several factors, including your salary, whether you have other life insurance, your financial obligations and more. Generally, 5-7 times your current net income is recommended. However, your specific needs could be less than or greater than this recommendation.

If you smoke, you may still apply for coverage. You will qualify for non-smoker rates only if you have not used any form of tobacco products within the last 12 months. If you occasionally smoke or if you have quit smoking in the last 12 months, you are considered a smoker.

Once the policy is issued, you can apply for a change to non-smoker rates if you have gone a full 12-month period without using any form of tobacco products. Contact us and apply for a switch to non-smoker rates. You will have to complete a medical questionnaire and we will send out a nurse to collect some medical evidence, most likely a urinalysis. Once our underwriters have approved your application and your eligibility is confirmed, you will be switched to non-smoker rates. 

You may apply for universal life insurance if you are a Canadian citizen or permanent resident/landed immigrant who has been in Canada for more than 12 months and are from age 0 to age 85.

Yes, you will need to complete a medical questionnaire. Other tests may also be required based on your age and the amount of insurance you have applied for. If you are required to provide other tests, we will arrange to have a nurse visit your home or workplace at a time that’s convenient for you. All tests are at the expense of RBC Insurance.

Yes. In fact, we recommend that you review your financial goals at least once a year. Your advisor can help you review your policy and consider whether to make any changes. You can change your future premium allocation or transfer money between interest options up to four times per policy year without incurring additional fees. Please note that a market value adjustment may apply if you are withdrawing money from a guaranteed interest option.

Just like a Registered Retirement Savings Plan (RRSP), the interest you earn within your policy is not taxable as long as your policy falls within the tax-exemption limits prescribed under the Income Tax Act. Tax deferral enables your policy to grow more rapidly than an investment that is subject to taxation. We carefully manage your policy to maintain its tax exempt status. For details on how we achieve this, please speak to an advisor.

To apply for universal life insurance:

Yes, you can cancel your insurance at any time by written request. You will receive the policy’s accumulation value, minus any outstanding insurance costs and applicable surrender charges if you cancel your policy during the early years of your coverage. Surrender charges are specified in your policy. A market value adjustment may also apply if you withdraw money from a guaranteed interest option. The proceeds of your cancelled policy may also be subject to taxation.

Universal life insurance policies combine permanent life insurance with an investment component. A portion of each premium purchases your life insurance, while the balance earns interest that is not taxable while it remains in the policy. Because of this, you help to protect your family against the possibility that you may die, and you help to protect your financial future.

By combining insurance, tax-advantaged investing and flexible coverage options, universal life insurance from RBC Insurance can help meet your most important financial needs.

Upon your death, the policy pays out a tax-free death benefit3, which can be used to help:

  • Ensure the ongoing financial security of your loved ones
  • Pay any taxes associated with your estate, thereby preserving your estate assets and passing your wealth or your business, intact, to the next generation
  • Provide a legacy for your favourite charity

During your lifetime, the policy’s tax-advantaged accumulation value grows tax-free, providing you with a potential source of funds for:

  • Protecting your income and ensuring your family’s lifestyle
  • Supplemental income in retirement
  • A financial safety net in the event of an illness or disability

Yes, not only is it possible, it's the cornerstone of effective estate planning. When your estate (such as your business, cottage or income property) passes to your heirs, it is—with the exception of your main residence—treated by Canada Revenue Agency as income to your estate. Your heirs may have to borrow money or sell off part of the estate to pay the tax. As a result, your heirs could see a much smaller benefit from your hard work and generosity.

Estate planning is one of the main reasons for buying universal life insurance. When your estate passes to your heirs, the tax-free3 insurance benefit could help to offset the taxes.

Yes, your coverage is completely customizable, allowing you to choose the best options for your needs, lifestyle and investment strategy.

Read more about the RBC Universal Life Insurance Plan.

A minimum premium is required to keep the policy in force. If you pay more than the minimum, then a portion of each premium goes towards investments you choose, earning interest that is not taxable while it remains in the policy. There are a number of ways you can access your policy’s accumulation value.

You are covered under the policy once you are approved, you have accepted delivery of the policy, and we have received the first premium.

Yes. You can request to reduce or increase your coverage at any time by contacting us at 1-800-461-1413. If you want to increase your coverage, new evidence of insurability and approval will be required. Your premiums will also be updated based on the new amount of insurance.

Yes. Your coverage is subject to the following exclusions:

  • During the first two years of coverage, if death is due to suicide, then no benefit is payable.
  • During the application process, if we are given incorrect or incomplete information regarding age, gender, health, lifestyle or smoking habits, we reserve the right to deny or adjust your benefit.
  • Four definitions of disability are recognized for coverage under the disability benefit; additional exclusions apply.

Other exclusions may apply depending on optional benefits chosen.

The information above is intended as a summary only. Please see the sample policy for RBC Universal Life or RBC Universal Life with Bonus Interest for complete details on terms and conditions, including benefits and exclusions.

Yes. Your policy will allow you to choose how much premium you want to contribute to your policy, within the minimum premium we set to keep your policy in force and the maximum we set to keep your policy exempt from taxation. The minimum premium is specified in your policy; the maximum changes every year depending on how your policy’s accumulation value is growing.

Your policy gives you complete choice over the timing and allocation of premium payments—you can pay annually or monthly by pre-authorized debit, and you decide how your money will be invested. After we deduct a premium tax from each premium payment, we direct the balance to your policy’s interest options. Every month we deduct enough to cover the cost of insurance and a guaranteed policy fee of $10 per month.

There are various terms and payment options to choose from. A licensed RBC Insurance® advisor can help you choose the policy that’s right for your specific needs and budget.

You may pay for your policy on a monthly or annual basis.

  • If you are paying by monthly pre-authorized debit, we will automatically debit your account when you are approved for coverage.
  • If you select to pay on an annual basis, we will send out an invoice for the annual premium.
  • As premiums become due under the policy, we will give you 30 days after your premium due date to make your premium payment. If we do not receive your payment during this time, the insurance will terminate and your coverage ends.

The information within this site is not intended to provide tax advice. You should seek independent tax advice from a tax professional or advisor.
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)
To qualify for a compassionate advance, you must provide written confirmation from your physician outlining your diagnosis and confirming that life expectancy is less than 24 months. This benefit is subject to our administrative rules at the time it is claimed and restrictions may apply.
3)
The information above is intended as a summary only. Please see a sample riders policy for complete details on rider and optional coverage terms and conditions, including benefits and exclusions.
4)
The information above is intended as a summary only. Please see the sample policy for RBC Universal Life or RBC Universal Life with Bonus Interest for complete details on terms and conditions, including benefits and exclusions.