You can use a permanent life insurance policy to ensure that your surviving spouse and dependent children have access to the funds they need to maintain their quality of life should you pass away. Your heirs can also use the benefits payable to them to help cover the capital gains tax on any assets you leave them in your Will—for example, a cottage or other vacation home. The main benefit of permanent life insurance is that it provides you with insurance coverage for as long as you live—at the same guaranteed rates.
Participating life insurance, also called whole life insurance, provides permanent life insurance with a tax-advantaged cash value component. In addition, these policies have the potential for earning policy owner dividends. Participating life insurance doesn’t require hands-on management by the policy owner. Instead, the insurance carrier manages the assets backing the cash values and death benefit.
Permanent life insurance is designed to provide insurance coverage for your entire lifetime. With this type of coverage, you have the dual security of knowing that while your premiums will never change, in the event of your death, your beneficiaries will receive the policy benefit tax-free.
Permanent life insurance protects you for your lifetime. It can build cash surrender values and provide a death benefit. Life insurance proceeds bypass probate and estate taxes if made payable to a named beneficiary and not the estate (this applies outside Quebec).