This is the most flexible life insurance available today. You can customize your plan when you buy it, or easily make changes later. Universal life insurance uniquely combines permanent life insurance protection with the benefits of tax-advantaged investing. You can decide to pay only the insurance and administrative costs each month and not use the investment component at all.

How universal life insurance works

With universal life insurance, you pay an amount of money (usually monthly) that is deposited into one or more investment accounts. Each month, the insurance company takes out money to cover insurance and administrative costs. The money left in the investment account earns a return based on the performance of the investment account(s) you've chosen inside your policy.

You don't have to pay tax on any growth in the investment accounts because it is part of a life insurance policy, provided your policy value does not exceed an amount prescribed under the Income Tax Act.