Whole Life Insurance
Discover the benefits and types of plans for whole life insurance at Dundas Life.
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Compare Whole Life Insurance Quotes
Monthly whole life insurance rates for a healthy 40-year-old based on Dundas Life policies.
Get QuoteWhat is Whole Life Insurance?
What is it?
Whole life insurance offers coverage for you until you die. The premiums and death benefit stay constant. A whole life policy also bundles as an investment tool, which can help fund your education, pay off a loan, or increase your wealth.
A part of your premium payments go into a savings account that grows tax-deferred at a rate set by the insurer. This accumulation of funds can contribute to your overall assets and wealth and be used for various purposes, including loan repayment or funding education expenses.
However, returns on investment are lower than other investment vehicles, partly because the provider deducts administrative fees for managing the insurance policy where another investment type insurance company might not.
A part of your premium payments go into a savings account that grows tax-deferred at a rate set by the insurer. This accumulation of funds can contribute to your overall assets and wealth and be used for various purposes, including loan repayment or funding education expenses.
However, returns on investment are lower than other investment vehicles, partly because the provider deducts administrative fees for managing the insurance policy where another investment type insurance company might not.
How does it compare to term life insurance?
Term life insurance plans covers you for a limited period and doesn’t accumulate guaranteed cash value. Whole life insurance, in comparison, stays in force until you die and builds up cash value that you can use while alive. However, these perks don’t come cheap. Whole life or permanent life insurance policies are substantially more expensive than term insurance.
What is it used for?
Whole life insurance is an ideal solution in situations such as:
You want to leave a lasting financial legacy to your heirs: Permanent life insurance policies give you peace of mind since you know your children will receive the death benefit upon your death.
You want to preserve and grow the value of your estate for your heirs: Buying whole life insurance within a trust to leave behind a death benefit to take care of the estate taxes after you pass away.
A spouse or partner depends on you financially or you have a special-needs child: A whole life insurance policy and its death benefit ensures your loved one gets the necessary support to live comfortably after you are no longer there to provide for them.
You want to create an extra source of savings: A whole life insurance policy gives you access to a pot of tax-free cash value in the form of policy loans
You want to leave a lasting financial legacy to your heirs: Permanent life insurance policies give you peace of mind since you know your children will receive the death benefit upon your death.
You want to preserve and grow the value of your estate for your heirs: Buying whole life insurance within a trust to leave behind a death benefit to take care of the estate taxes after you pass away.
A spouse or partner depends on you financially or you have a special-needs child: A whole life insurance policy and its death benefit ensures your loved one gets the necessary support to live comfortably after you are no longer there to provide for them.
You want to create an extra source of savings: A whole life insurance policy gives you access to a pot of tax-free cash value in the form of policy loans
How does it work?
Whole life insurance provides lifetime coverage and builds up cash that you can access during your lifetime. A portion of your premium payments goes into keeping the policy in force while another portion gets funneled into a savings component that grows tax-free. So, this insurance type is both an investment tool and a way to secure your family’s financial future after you’re gone.
Whole Life Policy Features
Whole life insurance offers a variety of features:
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Lifetime protection
Guaranteed death benefit
Fixed premiums
Guaranteed cash value growth
Tax-deferred investment
30 day grace period and cancel anytime
We’ll help you implement a plan that works for you.
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Term vs Whole Life Insurance
What are the advantages of whole life insurance?
Protection for life
A whole life policy is a contract with no end date, ensuring your loved ones receive a guaranteed death benefit whenever you pass. This provides peace of mind and helps protect your family's wealth for generations.
Level Premiums
Premiums remain fixed for the life of the policy. Some policies let you pay it off early, eliminating future payments while keeping coverage active until death.
Builds Cash Value
Cash value is a key feature of whole life insurance, acting as a built-in savings account that grows over time. You can borrow from it, make withdrawals, or use it as loan collateral. Initially, growth is slow but accelerates over time. Eventually, the cash value may become substantial enough to cover your premiums for life.
Tax Advantages
The death benefit of a life insurance policy is typically tax-free, and the cash value grows on a tax-advantaged basis. Withdrawals aren’t taxed unless they exceed the amount you’ve paid. This can be useful for short-term cash needs, like funding a business. If you’ve maxed out your RRSP and TFSA, whole life insurance can be another investment option. Many financial experts consider it a strong choice for long-term planning.
Potential Dividends
Some whole life policies pay annual dividends, which can support retirement planning. You can reinvest them to grow cash value faster, use them to buy additional coverage, or reduce part or all of your premiums, providing more financial flexibility over time.
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Types of Whole Life Insurance
Universal life (UL) insurance
This type of policy allows flexible premium payments and adjustable death benefits. The cash value growth is not guaranteed, and policyholders control how the insurer invests it.
Variable universal life (VUL) insurance
The death benefit and cash value of this policy are tied to investments. If the investments perform well, they increase, but if they underperform, they can shrink, leading to potential losses.
Participating whole life insurance
Policyholders have the right to share in the insurer’s surplus earnings and receive annual dividends. These dividends can be taken as cash, used to buy additional coverage, or applied to reduce future premiums.
Final Expense Insurance
This policy offers a small, affordable death benefit designed to cover end-of-life costs, such as medical bills and funeral expenses. It is also known as burial insurance.
Use Our Life Insurance CalculatorThis type of policy allows flexible premium payments and adjustable death benefits. The cash value growth is not guaranteed, and policyholders control how the insurer invests it.
Variable universal life (VUL) insurance
The death benefit and cash value of this policy are tied to investments. If the investments perform well, they increase, but if they underperform, they can shrink, leading to potential losses.
Participating whole life insurance
Policyholders have the right to share in the insurer’s surplus earnings and receive annual dividends. These dividends can be taken as cash, used to buy additional coverage, or applied to reduce future premiums.
Final Expense Insurance
This policy offers a small, affordable death benefit designed to cover end-of-life costs, such as medical bills and funeral expenses. It is also known as burial insurance.
How Much Will it Cost?
Life insurance costs are always unique to the insured. How much you will pay for coverage depends on many factors, such as:
Like other insurance products, whole life insurance costs increase with age, typically by 8% to 10% per year.
Age
Healthy applicants receive better rates, while conditions like diabetes or high blood pressure raise costs.
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Health
Men pay 38% more than women for the same coverage because of their lower life expectancy.
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Gender
The greater the death benefit, the higher the premium payments.
Amount
If you have a job or a hobby that puts you at risk, expect to pay more
Job/Hobbies
Smoking raises the risk of early death, increasing premiums by two to three times.
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Tobacco Use
A family history of illnesses like heart disease, diabetes, or cancer can mean higher premium rates.
Family History
Payment Options
Different types of whole life insurance policies have different payment options, allowing you to choose the one that works best for you.
Ordinary
Premiums remain fixed for life, and the policy builds tax-deferred cash value. However, you cannot choose how the cash value is invested.
Limited Payment
You pay premiums for a set period, like 5, 10, or 20 years, but benefits last a lifetime, ensuring uninterrupted service and protection for your loved ones.
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Single premium (SPL)
With a single large payment, the insurer guarantees a lifelong death benefit. Cash value grows quickly since the policy is fully paid upfront.
What Customers Are Saying
Got Questions?
We have answers.
Our licensed advisors are here to discuss your personal situation and needs.
Is whole life insurance permanent?
Whole life insurance is permanent coverage that lasts a lifetime with paid premiums. It includes a cash value component that grows over time. Unlike term insurance, it never expires, ensuring a guaranteed death benefit and lasting peace of mind for policyholders and their beneficiaries.
Is whole life insurance worth it?
Whole life insurance is ideal for those with unique financial needs. If your spouse or child depends on you, it ensures lifelong support through a guaranteed payout. If you've maxed out other investments, it can be a smart option. For most, term life insurance is more affordable. Connect with an independent advisor like Dundas Life to determine the best coverage and price for your needs.
What is the difference between whole life and universal life insurance?
A whole life policy is built on guarantees, offering fixed premiums, a guaranteed death benefit, and predictable cash value growth set by the insurer. The insurer also controls how the cash value is invested. In contrast, universal life insurance provides flexibility instead of guarantees. You can adjust premiums and the death benefit, but cash value growth varies based on your chosen investments.
What are some alternatives to whole life?
Considering the drawbacks of whole life insurance, it's essential to explore alternative options that offer unique benefits. Here are some alternatives worth considering:
Term Life Insurance
Term life insurance premiums are much cheaper than whole life insurance, costing five to 15 times less than whole life insurance. This means you can purchase significantly more coverage for the same price, providing greater financial protection for your loved ones.
Universal Life Insurance
Universal life insurance offers lifelong coverage while incorporating an investment component. Although the cash value growth differs from whole life insurance, it provides flexibility to suit your specific needs and financial goals.
Single Premium Life Insurance
With single premium life insurance, you have the opportunity to make a one-time payment that fully pays off the policy instead of monthly or annual premium payments. As a result, the guaranteed cash value grows at an accelerated rate, enhancing the potential value of your investment.
Is whole life insurance a good investment?
A portion of your whole life insurance premium goes into a tax-free savings account, allowing you to borrow or withdraw from it as it grows. However, returns are lower, and fees are higher than other investments. For this reason, whole life insurance is best suited for those who have already maxed out other investment options.
What are some myths about whole life insurance?
You need to be in perfect health to qualify for life insurance
Life insurance companies reward healthy individuals with lower premiums, but having health conditions like diabetes or high blood pressure will result in higher rates. If you smoke or have a serious illness, you may not qualify for traditional permanent coverage. However, alternatives like no medical or guaranteed issue life insurance can still provide protection, ensuring you have coverage even if your health isn’t perfect.
Life insurance is too costly for seniors
There's no way around it—buying life insurance at 60 is much pricier than at 30 because the risk of death increases with age, driving up premiums. However, affordable options exist for seniors, like final expense life insurance. This easy-to-obtain, budget-friendly policy helps cover end-of-life costs such as medical bills and funeral expenses.
Term life insurance is better than whole life insurance
These two life insurance types serve different purposes, making direct comparison difficult. Term life insurance is ideal for financial goals with an end date, such as covering a mortgage, paying off debts, or supporting children until they become independent. It’s also a great option for those seeking an affordable way to protect their loved ones financially.
How much does whole life insurance cost?
Whole life is more expensive than term life. To quote a ballpark figure, you may have to pay anywhere between five to 15 times more than term life insurance for the same amount of coverage. Investing in permanent life insurance is heavy on the pocket because it always pays the total life insurance benefit and it includes a savings component.
Further Reading
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