PARTICIPATING LIFE INSURANCE
Whole Life Insurance is also divided into Participating Life Insurance and Non-Participating Life Insurance. The latter Chinese translation is often translated into investment-linked life insurance (investment dividend insurance). Whole Life Insurance has further divisions based on factors such as the length of the payment period.
Participating Life Insurance divides the premiums paid into two parts: insurance cost and investment. The investment part is managed by the insurance company and part of the proceeds is distributed to life insurance investors in the form of dividends. Therefore, in addition to the life insurance function, the dividend insurance can also obtain the investment income of the insurance company.
The advantage of Participating Life Insurance is that the investment guarantees the principal, and the return on investment is relatively stable. In addition to the tax deferred tax and tax avoidance advantages, the income is generally higher than the non-registered investment account’s regular savings, bonds and other investments. The insured does not need to manage the investment and cannot design the corresponding investment portfolio according to his own wishes and investment expectations. The amount of dividends depends on the insurance company’s death payment, operating expenses, investment channels, and the use of funds. The company’s dividend for the year is the result of completing the annual accounting settlement, so the dividends are different each year and are not guaranteed. The dividend status of different companies is also different.
There are only a handful of major insurance companies in Canada that offer Participating Life Insurance products. Including Sun Life Financial, Canada Life and London Life, Manulife, Equitable Life and more.
TERM LIFE INSURANCE
Term life insurance generally has ten years of regular (Term 10), twenty years of regular (Term 20), and lifetime tenure (Term 100). Term 100 Chinese translation is lifelong death life insurance, and it is also a life-long insurance. The basic characteristics are the same as other regular insurance. For example, the insurance amount does not increase, there is no investment part, and the insurance policy will be terminated immediately.
Term life insurance is the simplest of all types of life insurance. If the insured pays the basic premium, if the life accident occurs during the insured period, the insurance company will compensate the purchased insurance amount; if there is no accident, the insurance company will no longer have any obligations to the insured, no cash savings, no additional Capital investment.
Due to the term life insurance, the internal audit regulations are relatively simple, and there is no cash savings or additional capital investment, so it is relatively simple and feasible.
The most suitable for regular insurance:
1. The current economic situation is not very stable and stable, and there is no sufficient cash flow to purchase life insurance.
2. It is suitable for household debts such as: (the mortgage or debt burden is heavier) needs to be larger than the debt.
Since the internal regulations of the term life insurance policy are relatively simple, and there is no cash savings or additional capital investment, the price comparison is relatively simple and feasible.
UNIVERSAL LIFE INSURANCE
Universal Life Insurance (UL, Chinese translation for universal life insurance, investment life insurance) is also a type of life insurance. Universal Life Insurance divides the premiums paid into insurance costs and investment investments. However, the investment part is not managed by the insurance company, but the policy holders choose their own investment direction and combination within the scope of the license, and they also bear the market risk.
Insurers can give policyholders greater flexibility because of the risks themselves. If the increase or decrease of premiums, the suspension of premiums under the allowable cash value of the policy, and the change of investment direction, etc., the changes can be easily adjusted. Therefore, risk self-confidence and flexibility are the biggest features of Universal Life Insurance.
Universal Life Insurance is divided into many categories based on its premium cost and the length of the contribution period. In addition to the price and the choice of investment types that are suitable for the purchase, the company can focus on selecting more types of funds, more investment direction options, and better fund management and returns in the past.