Best Universal Life Insurance Canada: Updated 2025 guide
- Lifetime protection
- Tax-advantaged savings growth options
- Reduced paid-up insurance option
- Lifetime protection
- Tax-advantaged savings growth options
- Reduced paid-up insurance option
SunSpectrum Universal Life II from Sun Life offers permanent life insurance coverage with a strong investment component, making it a compelling option for individuals looking to combine lifelong protection with long-term wealth accumulation. Available from birth to age 80, this policy provides flexible investment account options allowing for tax-deferred savings growth. The product includes a reduced paid-up option, which lets policyholders stop paying premiums in the future while maintaining some level of coverage. It also supports a fully digital experience with an online application process and digital policy delivery. A range of optional riders further enhances customization, including critical illness or children's benefits. However, the policy comes with high initial premiums, which may not be suitable for cost-sensitive applicants or those with shorter-term protection goals.
Ideal profile: This solution is well-suited for high-net-worth individuals, business owners, and long-term planners seeking to merge estate planning, life insurance, and tax-efficient investment growth in one comprehensive policy.
- Lifetime insurance coverage with strong investment options for tax-advantaged growth
- Digital-friendly: online application and e-policy delivery
- Wide range of riders available for enhanced protection
- Reduced paid-up insurance option allows flexibility later in life
- Suitable from age 0 to 80, appealing to both young families and retirees
- Higher premiums compared to standard permanent or term life products
- May be overly complex for individuals not interested in managing investment-linked insurance
- Possibility to modify the contract at any time
- Tax-sheltered savings option that grows
- Guarantees for children included
- Possibility to modify the contract at any time
- Tax-sheltered savings option that grows
- Guarantees for children included
Permanent Life Insurance from Beneva provides lifetime coverage with a strong focus on flexibility and stability, making it a highly versatile solution for long-term financial security. Coverage is available from birth up to 85 years old, with a maximum death benefit of up to $10 million, addressing both personal and estate planning needs. Premiums are fixed, ensuring long-term cost predictability, and the policy offers a built-in cash value accumulation feature that can be leveraged later as a tax-sheltered savings or even as a supplemental retirement income stream. Policyholders have the flexibility to modify their contracts at any time, allowing adjustments based on changing financial circumstances. Additionally, the product includes guarantees for children's coverage, enhancing its value for families seeking multi-generational protection. While it presents robust benefits, users should carefully evaluate surrender conditions and potential impacts on cash value when accessing funds, as well as compare growth projections to market alternatives for investment efficiency.
Ideal profile: This policy is particularly suitable for individuals or families prioritizing lifelong coverage with cash value growth potential, professionals seeking stable premiums for estate planning, and parents interested in securing coverage for their children within the same contract. It also fits well for retirees who may want to supplement retirement income with accumulated policy cash value.
- Possibility to modify the contract at any time to adapt to evolving needs
- Fixed premiums providing predictable long-term financial planning
- Tax-sheltered savings option growing within the policy for added liquidity
- Included guarantees for children's coverage, enhancing family protection
- Surrendering cash value may reduce death benefit and future growth potential
- Returns on cash value accumulation could be modest compared to other investment vehicles
- Managing policy modifications requires active engagement to optimize benefits
- Lifetime protection
- Tax-advantaged savings growth options
- Range of options for death benefit, insurance cost, and investments
- Lifetime protection
- Tax-advantaged savings growth options
- Range of options for death benefit, insurance cost, and investments
SunUniversalLife II from Sun Life offers a highly customizable permanent life insurance solution, blending lifelong protection with flexible investment opportunities. Available to applicants aged 20 to 60, this policy can provide coverage up to $25 million, making it ideal for both personal financial protection and advanced estate planning. Policyholders benefit from flexible premiums and the ability to adjust the death benefit, insurance costs, and investment allocations over time. The policy’s growth is tax-advantaged, with gains not impacting social security benefits, a strong advantage for high-net-worth individuals planning for retirement income or wealth transfer. However, it’s important to note that while there is strong potential for tax-free growth, returns are capped, and there are no guarantees regarding premium stability, requiring careful financial planning and ongoing monitoring. Its broad array of additional coverage options and the ability to fine-tune benefits and savings strategies make it an attractive tool for sophisticated, evolving financial strategies.
Ideal profile: This product is particularly fitting for affluent individuals or business owners seeking lifetime protection combined with the ability to grow savings in a tax-efficient manner, clients needing dynamic policies that adapt to changing life circumstances, and those focused on estate maximization or supplementing retirement income without impacting government benefits.
- Flexibility in adjusting death benefit, insurance costs, and investments over time
- Tax-free growth and capital gains advantages within the policy
- No impact on social security benefits when leveraging cash value
- High coverage limit up to $25 million suitable for significant estate planning
- Returns on investment components are capped, limiting growth potential
- No guarantees on premium amounts over the life of the policy
- Requires active management to optimize benefits and ensure alignment with financial goals
- Benefit in case of disability and tax-free
- Lifetime protection and tax-advantaged investments
- Option to guarantee a child's or grandchild's insurability
- Benefit in case of disability and tax-free
- Lifetime protection and tax-advantaged investments
- Option to guarantee a child's or grandchild's insurability
RBC Whole Life Insurance offers lifelong protection with strong guarantees, making it a secure and structured solution for individuals seeking predictable long-term financial planning. Available from birth up to 80 years old, with coverage up to $10 million, this product includes guaranteed cash values, the potential for annual dividends, and multiple premium payment options (10, 20 years, or for life). Policyholders benefit from the ability to add multiple riders, manage their policies digitally through online accounts, and access tax-advantaged investment growth within the policy. The dividends, while not guaranteed, can enhance the cash value over time, offering a potential source of accessible funds or increased death benefits. However, eligibility is restricted to Canadian permanent residents, slightly narrowing its accessibility. Overall, RBC’s Whole Life product stands out as a cost-effective and digitally friendly choice for clients valuing stability, with the added bonus of estate planning advantages and protection for future generations through insurability guarantees for children or grandchildren.
Ideal profile: This policy is ideal for Canadian permanent residents looking for a stable, long-term insurance solution, individuals focused on wealth preservation and estate planning, and those valuing both guaranteed growth and the potential for additional dividends over time. It is also suitable for tech-savvy clients who appreciate managing their insurance online.
- Guaranteed lifetime coverage with potential for dividend growth
- Flexible premium structures with 10, 20-year, or lifetime payment options
- Online account access and digital management ease
- Multiple riders available for customization
- Option to guarantee a child’s or grandchild’s insurability
- Only available to Canadian permanent residents
- Dividends are not guaranteed and can vary annually
- Less investment flexibility compared to universal life insurance policies
- Option of level costs or annually renewable term costs
- Three death benefit options
- Non-taxable disability protection
- Option of level costs or annually renewable term costs
- Three death benefit options
- Non-taxable disability protection
Genesis by iA Financial Group is a highly flexible insurance solution designed to provide not just life coverage but also significant financial planning tools, including tax-free estate maximization, mortgage protection, business value safeguarding, and access to liquidity for retirement or unforeseen needs. Available from birth up to 85 years old, Genesis allows coverage up to $10 million and offers a variety of premium options (10, 15, 20 years, or coverage up to 100 years). It stands out with guaranteed insurance costs, an accessible surrender value, and built-in disability protection, providing an additional layer of financial resilience. Policyholders can choose between level cost structures or annually renewable terms and select among three types of death benefit options, tailoring the plan to suit evolving goals. However, the lack of an electronic policy option might seem a bit outdated, particularly for tech-savvy clients who expect full online service capabilities. Despite that, Genesis remains a versatile, solid product, suitable for both personal and business uses where flexibility, guarantees, and liquidity matter.
Ideal profile: This product is a good fit for individuals seeking tax-efficient estate transfer, entrepreneurs wanting to protect business value, or anyone needing a flexible plan that can adapt to major life stages while also building liquidity. It’s particularly suited for conservative investors valuing predictable insurance costs and guaranteed benefits over digital convenience.
- Guaranteed insurance costs for long-term financial stability
- Availability of a surrender value offering liquidity when needed
- Disability benefits included, enhancing personal financial security
- Wide flexibility with premium payments and death benefit structures
- Access up to 85 years old, accommodating a broader demographic
- No fully digital or electronic policy management
- Potentially less attractive for younger, digitally oriented clients
- Annual renewable term costs could become more expensive over time if not carefully managed
Universal life insurance is a flexible permanent life insurance. Not only does it offer traditional protection, but it doubles as a tax-deferred investment account.
This guide offers everything you need to know about universal life insurance plans, including their benefits, costs, how they work, and more.
Use our free tool to compare the best universal life insurance plans in Canada now and get your free personalized quote today.
Best universal life insurance Canada 2025
- iA Groupe financier: Term, whole, and universal policies
- RBC Life Insurance: Backed by Canada's largest bank
- Canada Life Insurance: Merged entity of 3 top insurers (Great-West Life, London Life, Canada Life)
- Sun Life Insurance: Oldest and one of the largest insurers in Canada
- BMO Insurance: Age 0-80 permanent life available
- Equitable Life of Canada Insurance: Ability to convert term policies to permanent plans
- Ivari Universal Life Insurance: Established Canadian insurer, 80+ years
What is Universal Life Insurance?
Universal life insurance (UL) is a type of permanent life insurance. As long as the policyholder maintains their coverage by making payments they are protected for life with their universal life insurance policy.
Universal life combines a savings and investment vehicle with the traditional life insurance component encouraging you to grow your wealth for you or your beneficiaries to use it later. It is flexible too. You can pick your investments while benefiting from tax-preferred savings. It’s possible to withdraw money from or borrow against your policy.
These policies come with a guaranteed death benefit, so you are confident that you’ll be able to leave something to your loved ones when you pass away.
How does Universal Life Insurance work?
When you purchase a universal life insurance policy, you are buying death benefits and investment.
The insurance company determines a goal premium that it believes would be adequate to pay the cost of coverage while also increasing the cash value of the policy, but premiums are flexible.
Paying more or less than the target will mean more or less money to go toward growing the cash value of your life insurance. If you miss a premium payment the amount is deducted from the value of the policy.
Here are a few points to keep in mind:
- Any remaining or additional funds after paying the premium are allocated to the investment portion of the policy.
- You chose how to invest the funds.
- As long as there is enough money left over to pay for the insurance, you are free to utilize the funds in your account as you see fit.
- When you pass away, a beneficiary whom you’ve picked will inherit the money from your insurance policy.
Universal life insurance explained
Sarah, a 35-year-old from Ontario, purchases a universal life insurance policy with a $500,000 death benefit. She pays a flexible premium of $150 per month, a portion of which goes toward the cost of insurance, and the remainder goes to the cash value. After 10 years, the policy has accumulated a cash value of $20,000. If needed, Sarah can access this cash value for purposes like supplementing her income or covering unexpected expenses.
What are the types of universal life insurance?
What is standard universal life insurance?
As explained earlier, standard universal life insurance or simply universal life insurance is the most basic form of UL. It offers a flexible premium and an interest rate on the cash value component that is set by the insurance company. The cash value can increase over time, depending on the amount of premium paid and the current interest rate environment.
What is variable universal life insurance?
With certain restrictions, a variable universal life policy allows you to choose where to invest the money, unlike a whole life policy, in which the company or provider determines where to invest this cash value. You are given a variety of investing possibilities by the provider which can demand regular monitoring, so for individuals who prefer a hands-off attitude, it is not the best option.
A variable universal life insurance policy's objective is to build cash value that can be withdrawn and utilized for different life events, such as paying off a mortgage, paying for medical expenditures, or taking a global vacation. Additionally, your insurer will continue to pay a death benefit to your beneficiaries even if you pass away too soon or don't use all of your cash value.
What is index universal life insurance?
Indexed universal life Insurance (IUL) is a form of permanent life insurance that functions equivalently to UL policies except how cash value is accrued.
In contrast to just using non-equity earning rates, IUL cash value growth is possible based on a stock index, which is a predetermined collection of different stocks. IUL, like universal life insurance, allows you to modify your premium as your cash value increases, giving you the option of eventually switching to a zero-cost policy where your accumulated cash value pays for all premiums.
Keep in mind that indexed universal life Insurance policies are more expensive than other types of life policies due to increased premium expenses and associated fees. Additionally, be sure you comprehend how the insurance company will determine your interest rate, the earnings cap, and other potential expenses.
What is guaranteed universal life insurance?
A no-lapse guaranteed universal life insurance gives you a policy with all the benefits of standard universal life insurance with the added certainty that the coverage won't lapse. To prevent the policy from expiring, a predetermined minimum premium depending on your coverage amount must be paid.
This can be a better option if you don't want to pay close attention to your policy but still want the benefits of universal life insurance coverage.
Is universal life insurance worth it?
Life insurance is a powerful tool for providing for your loved ones when you are no longer around.
Depending on your investment needs and beneficiaries, universal life insurance may be the right choice for you. They are a good match if you are looking for a permanent policy with the extra advantages of flexible investment alternatives, tax-sheltered growth, and premium flexibility.
However, if you'd prefer a less expensive choice and only require coverage for a certain period, you may look into other possibilities, like Term Life insurance. From an investment perspective, RRSP and TFSA accounts also offer tax advantages.
How much does Universal Life Insurance cost?
The cost of Universal Life insurance will vary from person to person since it depends on so many factors:
- Gender: The cost of this policy is generally cheaper for women than for men.
- Age: The younger you are, the lower your rates will be
- Amount of coverage: The higher your coverage is, the more expensive your policy rate.
To get an idea of the average cost of universal life insurance quotations, check the following chart.
| Coverage amount | Gender | Age: 30 | Age: 40 | Age: 50 |
|---|---|---|---|---|
| $250,000 | Female | $104 | $160 | $252 |
| $250,000 | Male | $121 | $183 | $286 |
| $500,000 | Female | $194 | $309 | $489 |
| $500,000 | Male | $223 | $353 | $559 |
| $1 million | Female | $380 | $610 | $968 |
| $1 million | Male | $439 | $698 | $1,107 |
Life insurance rates vary with individual circumstances and you must get quotes from multiple providers. It may seem daunting but we've made it easy for you. Use our comparator below to compare the best plans and get free universal life insurance quotes in no time.
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What are Universal Life Insurance pros and cons?
UL presents some tangible benefits over a term life insurance or a whole life policy. But even with all the flexibility and investment advantages, there are also disadvantages to consider.
Advantages of universal life insurance
- Adjustable premiums: You can easily modify universal life premiums to match your financial situation, unlike other kinds of life insurance. You choose to pay larger rates more frequently, lower premium payments, skip payments, pay out-of-pocket for premiums, or pay premiums using the policy’s accumulated cash value.
- Access to the cash value: You can easily borrow against your policy. You may not even need to pay back the loan since you already have cash value in your policy. Be careful to only make a partial withdrawal as a full one may leave you with nothing and cancel the policy.
- Adjustable Death Benefit: You have the freedom to adjust your death benefit, typically at any moment, to tap into the policy’s cash value. For instance, if your death benefit was primarily intended to replace your income while your children were still young, you might decide to lower it after they start working as adults. Reducing the policy's death benefit allows you to lower your premiums. Alternatively, you can increase it to leave a larger death benefit to your beneficiaries.
- Tax-deferred growth: The policy’s cash value growth is tax-sheltered making it a nice way to save money. Withdrawals may be taxable.
Disadvantages of universal life insurance
- Cost: Universal life insurance policies can be more expensive than term or whole-life policies.
- Higher fees: The investment component of universal life insurance means more administration and higher fees.
- Adjustable premiums: The cash value of the policy decreases if the minimum premium is paid, if less is paid than the target premium or if payments are skipped. This can mean there is no excess premium to allow the policy to accrue cash value or a decrease in the policy’s monetary value. It can even mean the policy expires! If the cash value is only used to pay the premium, the policy will eventually run out of cash value, at which point your coverage may cease.
- Access to the cash value: The money you borrow does not come directly out of the cash value but from the insurance provider with the cash value serving as collateral. Even though you don't have to pay it back, the loan is not free money. The cash value of your policy will decrease if you don't at least pay the interest.
- Decrease death benefit: Reduced death benefits can mean that your beneficiary will receive less money than you had anticipated when you purchased the policy.
- Increasable death benefit: Increasing your death benefit typically requires a medical test because you must once again pass the insurance company's underwriting requirements. This is likely to increase your premium.
Universal life insurance vs whole life insurance
Trying to choose between whole life and universal life insurance? Here are the main differences.
| Features | Universal Life Insurance | Whole Life Insurance |
|---|---|---|
| Stability | No. If cash value is only used to pay premium, the policy may eventually run out of cash value, at which point your coverage may cease. | Yes. No matter when policyholder dies, beneficiaries get guaranteed death benefit. |
| Flexible Premiums | Yes. Depending on the investments you choose, premiums may change. You are free to alter number of premiums during the term of the contract. | No. When policy is purchased, premiums are set, guaranteed never to rise, as long as you continue to pay them. |
| Investment Account | Yes. Policyholder may invest in any way they like tying the value of policy to the success of their investments. Cash savings will accrue interest but losses are also possible. | Sometimes. Cash surplus value does not accrue interest, but participating policies may receive dividends if company assets turn a profit. |
| Tax Advantages | Yes. Market gains earned by investments are tax-sheltered. | Yes. Dividend payments are tax-sheltered. |
| Borrowing | Automatic premium loans are triggered by unpaid premiums. If loans surpass the cash surplus value, the policy will lapse. | Yes. Many whole-life policies let you borrow up to 90% of cash value. |
| Missed payments | Value of the account is instantly deducted for missed payments. If account value can't cover payments, coverage will cease. | Automatic premium loans are triggered by unpaid premiums. If loans surpass cash surplus value, policy will lapse. |
If you're wondering which type of permanent life insurance suits you best, look no further. Use our free comparator below to explore the best life insurance options in Canada, get personalized quotes in seconds, and find a policy that truly fits you best.
Compare the best life insurance companies
What is the best universal life insurance in Canada?
The best UL in Canada varies based on your individual needs. Focus on your budget, coverage needs, and preferences for flexibility. You could use our comparator to get quotes and find a plan that's best for you. However, here are some of the best providers of UL.
| Provider | Basic Features | Get a quote |
|---|---|---|
| Sun Life |
| Get a quote from Sun Life |
| iA Financial Group |
| Get a quote from iA Financial Group |
| RBC |
| Get a quote from RBC |
| Canada Life |
| Get a quote from Canada Life |
| BMO |
| Get a quote from BMO |
| Equitable life of Canada |
| Get a quote from Equitable Life |
| ivari |
| Get a quote from Ivari |
