Business-owned participating life insurance
Get the most out of your business
It’s not just lifelong protection. It’s a versatile way to help support your business and create new opportunities.

Lasts for life
Lifelong protection with premiums that won’t go up.
Guaranteed value
Your cash value is guaranteed to grow.
Share in the experience
Opportunity to receive dividends.
What is participating life insurance for your business?
It’s lifelong coverage that provides a tax-free payment to your company if you, your business partner or key employees die.
But it’s more than just insurance protection. Your policy is guaranteed to grow in cash value as long as you pay your premiums. Cash value is the value of the insurance policy that your business can access as cash. Your insurance payout is reduced when you access your cash value.
Your payments are pooled in a separate account called the participating account with other policyowners. We professionally manage those funds and you may get a dividend.
How does it work?
- Pay your premiums and your policy’s cash value grows tax-free, within limits.
- Your payments go into the participating account that is professionally managed.
- That money is used to pay for expenses, taxes, insurance claims and other items.
- Your business may receive dividends based on the participating account’s performance.
- Your business can take your dividend as cash, buy more insurance or pay for your existing coverage.
- Your business receives a tax-free payment when you die.

Your policy's cash value
Guaranteed growth
When your policy’s cash value grows, the new total is automatically guaranteed and is protected from declines, unless your business uses it for some other purpose. The only way it can be reduced is if you use the cash value.
Flexible access
You can access your policy’s cash value in several ways: withdraw cash value, borrow from your policy or use it as collateral for a third-party loan. This may affect your coverage, and you may have to pay taxes.
Accessing your cash value
Withdraw cash value
- Your business can withdraw some or all the cash value of your policy, adjusted for any loans or fees.
- Withdrawals reduce your coverage and may be taxable.
- If the corporation withdraws all the cash value, the policy ends.
Borrow from the policy
- Borrow from your cash value and pay it back, with interest, over time.
- This option is available if the cash value is large enough and isn’t securing another loan.
- Potentially tax-free loan, which doesn’t reduce your coverage.
- If the loan isn’t repaid, the balance, including interest, is deducted from the amount paid out at death.
Use it as collateral for a loan
- The corporation may borrow from banks or other third-party lenders (movable hypothec in Quebec) against the policy’s cash value.
- The corporation doesn’t pay taxes, but a shareholder might.
- The corporation pays interest to the lender.
- A collateral loan doesn’t reduce your coverage and capital dividend account credit.
- If the loan isn’t repaid, the balance, including interest, is deducted from the amount paid out at death.
Participate in your account's earnings
If the participating account performs better than expected, we may distribute dividends from these earnings. You can use dividends in one of several ways:
- Increase your coverage, which may increase the policy’s cash value
- Decrease or stop your payments
- Take your dividends as cash
Why do you need participating life insurance for your business?
Your company
Achieve more with your company’s investable assets.
Your family
Help them pay off your business loans when you die.
Your partners
Provide funds to buy the other person’s share of the business.
What can you use participating life insurance for?
Need additional cash flow
Life insurance may provide tax-free growth, subject to government limits, that your corporation can use if needed.
Fund a buy/sell agreement
Insurance payout can help buy your partners shares or vice versa when someone dies.
Protect your key people
Use funds to pay debts and expenses to help keep the business going while you find and train a suitable replacement.
Loan coverage
Help cover outstanding business loans and debts.
Funds not needed for operations/reducing tax
Permanent insurance can help diversify your portfolio and reduce tax on passive investments.
How much does it cost?
Participating life insurance can be more expensive than term and universal life insurance because of the policy’s guarantees.
There are several variables that determine the cost of your policy. Here are a few of the main factors:
Age
Generally, insurance is less expensive when you’re younger.
Health
Family history, chronic diseases and lifestyle can increase costs.
Gender
Women live longer than men on average, so insurance may cost less.
Occupation
If you have a dangerous job, your insurance costs can be higher.
What is the difference between universal and participating life insurance?
Universal and participating life insurance are the 2 forms of permanent protection for your business. Here’s how they compare:
Participating life insurance | Common features | Universal life insurance |
---|---|---|
Guaranteed money grows inside your business’ policy | Lifetime insurance coverage | Manage your risk profile and choose investment options |
Conservative asset management | Guaranteed premium options | Cost effective |
Policyowner dividends | Guaranteed payout | Payment flexibility |