- Canada Life offers two participating whole life policies that offer lifetime coverage, cash value growth, annual dividends, and flexible payment options (Max 10, Max 20, Pay to age 100)
- Estate Select is the more affordable option, starting at $25,000, with delayed access to cash value
- Wealth Select focuses on early cash value access and starts at $100,000
- You can include term life insurance on your children with these policies. Any future children will be covered at no additional cost until you turn 60
- What are the benefits of Canada Life’s whole life insurance?
- Types of whole life insurance offered by Canada Life
- How can I access my Canada Life whole life cash value?
- What additional benefits or riders does Canada Life offer on their whole life plans?
- What happens if I stop paying my premiums?
- What are the advantages and disadvantages of Canada Life's whole life insurance?
- How do you apply for Canada Life's whole life insurance?
- Frequently asked questions
As Canada’s first domestic life insurance company, Canada Life has a proven track record of helping Canadians secure their financial legacy. In this review, we’ll explore its whole life insurance offerings, designed to provide lifetime coverage with a built-in savings component.
Whether you’re looking to protect your estate or build wealth over time, this guide will help you decide if Canada Life’s whole life insurance meets your specific needs.
What are the benefits of Canada Life’s whole life insurance?
Canada Life’s whole life policies provide lifelong coverage while building guaranteed cash value that you can use during your lifetime. They also allow you to pay off your policy quickly (in 10 or 20 years) or spread payments over a longer period of time (until age 100). Key benefits include:
- No maximum coverage: Canada Life’s whole life policies have no set upper limit, meaning you can get as much coverage as you need. However, amounts over $50 million require special underwriting
- Four dividend options: Dividends can be received in the form of cash payments, premium reductions, paid-up additions, and enhanced insurance
- Additional Deposit Option (ADO): You can increase your policy’s coverage and cash value by making extra payments
- Flexibility with premium offset: You can cover some or all of your premium payments using dividends
- Children’s term life insurance rider: You can include term life insurance on your children with these policies. Future children are added at no additional cost until you turn 60
When it comes to coverage, Canada Life offers several options, including:
- Single life: Covers one person and pays a death benefit upon their passing
- Joint-first-to-die: Covers two people and pays a death benefit when the first insured person dies. The surviving person remains covered for an additional 60 days, during which they can buy a new policy on their life, with no underwriting
- Joint-last-to-die (premiums to first death): Covers two people with premiums payable until the death of the first insured person. Premium payments are higher under this plan
- Joint-last-to-die (premiums to last death): Covers two people with premiums payable until the death of the second insured person. Premium payments are lower under this plan
Types of whole life insurance offered by Canada Life
Canada Life offers two participating whole life policies with lifetime coverage, cash value growth, and annual dividends. Here’s how they differ:
- Estate Select: Provides higher cash value and payout in later years and is ideal for parents looking to secure their children’s future
- Wealth Select: Offers early cash value growth and is ideal for business owners seeking near-term liquidity
Key features of Canada Life’s Estate Select and Wealth Select plans
Category | Estate Select | Wealth Select |
Premium type | Fixed, with flexible payment options (Max 10, Max 20, and Pay to age 100) | Fixed, with flexible payment options (Max 10, Max 20, and Pay to age 100) |
Coverage amount range | $25,000 to no maximum | $100,000 to no maximum |
Dividend options |
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Policy loan availability | Yes, but borrowers cannot make additional deposit option (ADO) premium payments while their policy loan is active | Yes, but borrowers cannot make additional deposit option (ADO) premium payments while their policy loan is active |
Payment flexibility | Monthly or annually | Monthly or annually |
Living benefits |
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Additional riders | Accidental death benefit, waiver of premium benefit, guaranteed insurability rider, business growth protection rider, and child’s term life insurance rider | Accidental death benefit, waiver of premium benefit, guaranteed insurability rider, business growth protection rider, and child’s term life insurance rider |
Source: Canada Life
What are the different whole life dividend options that Canada Life offers?
Canada Life provides four dividend options for policyholders:
- Cash payments: Receive dividends as cash payouts, though they may be taxable
- Premium reductions: Use dividends to reduce or stop out-of-pocket premium payments
- Paid-up additions: Purchase additional coverage to increase both death benefit and cash value
- Enhanced coverage: Combine paid-up additional coverage and term life insurance for maximum protection
How are dividends for Canada Life’s participating policies distributed?
Dividends in Canada Life’s participating policies are distributed based on the earnings of the participating (or “par”) account. This account combines premiums from all participating policyholders and invests them in a diverse portfolio of assets.
“Par” account earnings depend on several factors, including investment returns, policy cancellations, insurance claims, and operational costs. When the account outperforms expectations, Canada Life shares the excess earnings with policyholders through dividends.
Source: Canada Life
While dividends are not guaranteed and can vary, Canada Life has a strong track record of maintaining its dividend scale, having paid annual dividends at an interest rate of 5.25% to 5.50% over the past three years.
Canada Life whole life dividend scale 2022-2024:
- 2022: 5.25%
- 2023: 5.50%
- 2024: 5.50%
How are my Canada Life whole life insurance premiums invested?
Canada Life invests its participating policy premiums into two types of assets:
- Fixed-income assets: These investments provide steady returns through fixed-interest payments:
- Public bonds: Government and corporate bonds with high credit ratings
- Private debt: Loans made to companies by private financial institutions
- Mortgages: Residential and commercial mortgage loans offering stable income
- Non-fixed-income assets: These investments carry more risk but offer higher potential returns:
- Real estate: Commercial and residential properties generating rental income and capital appreciation
- Public equity: Shares of publicly traded companies offering long-term growth potential
- Private equity: Ownership stakes in private companies not publicly traded
Are “par” account investments affected by market conditions?
Yes. While Canada Life employs a long-term investment strategy and “smoothing” mechanism to spread investment gains and losses over several years, changes in interest rates, stock prices, and real estate can still affect the “par” account’s investments.
How can I access my Canada Life whole life cash value?
You can access your policy’s cash value through:
- Cash withdrawals: You can withdraw part or all of your cash value. A full withdrawal will result in your policy’s cancellation
- Policy loans: You can borrow against your cash value. However, you won’t be able to make Additional Deposit Option (ADO) payments while your loan is active
- Collateral loan: You can use your policy as collateral for a loan
- Premium offset: If you have enough cash value, you can use it to pay part or all of your due premiums
What additional benefits or riders does Canada Life offer on their whole life plans?
Canada Life offers several additional benefits or riders on its whole life policies, including:
- Total disability insurance benefit: Covers required premium payments if the insured experiences certain disabilities. To qualify, the insured must be 18 or older when the policy is issued
- Accidental death benefit: Provides a higher payout if death is caused by certain types of accident. This can help beneficiaries manage unexpected payments that may arise due to the covered accident
- Waiver of premium benefit: Covers required premium payments if the insured under this benefit becomes disabled or passes away
- Guaranteed insurability rider: Allows you to obtain new permanent policies on the insured person without medical underwriting
- Business growth protection rider: Allows you to purchase additional permanent policies on the insured person over a 10- or 15-year period
- Children’s term life insurance rider: Provides term life insurance coverage for your children, including adopted and stepchildren. Future children are automatically added at no additional cost until you turn 60
What are the advantages and disadvantages of Canada Life’s whole life insurance?
Canada Life’s whole life policies offer several benefits, from unlimited coverage to multiple payment and dividend options. However, they also have some limitations. Let’s take a closer look at them:
Pros and cons of Canada Life’s whole life insurance
Pros | Cons |
Offers unlimited coverage based on your needs (special quote needed for amounts over $50M) | Under the joint-last-to-die (first death) plan, Additional Deposit Option (ADO) payments stop after the first insured person’s death. That means the survivor can no longer enhance their policy using ADO contributions |
Includes term life insurance rider for children that covers future children at no additional cost (until you turn 60) | Premium offset availability depends on the participating account’s earnings |
Offers flexibility to increase coverage and cash value through Additional Deposit Option (ADO) | |
Allows you to offset some or all of your premiums using dividends |
How do you apply for Canada Life’s whole life insurance?
You can get a personalized whole life insurance quote for Canada Life through PolicyAdvisor, where you can compare different plans and policies from Canada’s top providers.
Schedule a free consultation with our licensed advisors to explore the best options to protect your legacy.
Frequently asked questions
Is Canada Life’s whole life insurance worth it?
If you want lifelong protection with cash value growth that you can access in many ways, a whole life policy could be a smart choice. However, premiums for whole life insurance are generally higher than those for term life and may exceed some budgets.
Does Canada Life offer participating policies with dividends?
Yes. Canada Life offers two participating whole life policy plans, Estate Select and Wealth Select, with flexible payment options.
Do I need medical underwriting for a Canada Life whole life insurance plan?
Yes, Canada Life requires medical underwriting for new whole life insurance policies. However, if you already have whole life insurance, you can enhance your coverage using the Guaranteed Insurability Rider, without any underwriting.
How does the Canada Life participating account work?
Canada Life’s participating account pools premiums from all participating policyholders and invests them in a diversified portfolio of assets. The account’s earnings are influenced by various factors, including investment returns, mortality claims, policy cancellations, and operational expenses. When the account’s earnings exceed expectations, the surplus is distributed among policyholders as dividends.
What is the children’s term life insurance rider?
The children’s term life insurance rider is an optional add-on to Canada Life’s whole life insurance policies. It provides term life coverage for your biological, adopted, and stepchildren. Future children are automatically covered at no additional cost until you turn 60.
Canada Life offers two participating whole life policies, Estate Select and Wealth Select, with four dividend options. You can pay them off quickly, in 10 or 20 years, or spread the payments over your lifetime. For coverage, you can insure one person with Single Life or two people with Joint-First-to-Die, Joint-Last-to-Die (Premiums to First Death), or Joint-Last-to-Die (Premiums to Last Death) options.