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Business-owned universal life insurance

Insurance that can adapt with your business

Flexible protection for your company that lets you choose your investments and payment schedule. 

  • Flexible

    Choose from a range of premium payments options.

  • Power to choose

    Decide how to invest your business’ money.

  • Build your wealth

    Achieve your goals with funds in your business’ account.

What is business universal life insurance?

It’s guaranteed, lifelong protection for your business that you can invest and use to build on your success.

It’s one of the most flexible and affordable products available that permanently covers your business.

There are two parts to a universal life insurance policy: an insurance and an investment component. You choose your business’ investments and the money grows tax-free, within legislative limits.

How does it work?

  • Pay a premium within the minimum and maximum range outlined in your policy.
  • Your premium covers insurance costs, any remaining money goes toward the investments you choose.
  • You can access the money in your account for your business to use however you want, as long as there’s enough left to cover the insurance costs.
  • You choose who receives the proceeds from your insurance protection when you die.

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Access money when your business needs it

Universal life insurance gives your business the advantage of access to money you’ve earned in your policy. Your business can withdraw or borrow from your policy, although there are tax implications.

You’re only able to access the money in your business’ account if there’s enough remaining to cover the monthly insurance cost, as well as any applicable cancellation charges, policy loans and market value adjustments. 


  • Your business can make a partial withdrawal at any time. 
  • Withdrawals decrease your policy’s cash value as well as your payment to beneficiaries in some cases. 
  • Minimum withdrawal is $500 and a maximum depends on your policy. 
  • Your business is taxed on withdrawals from your policy.

Policy loans

  • Borrow with interest from your policy’s cash value, as long as there’s enough money to cover the cost of cancelling your insurance, and eventually pay it back.
  • Your policy’s cash value continues to grow as if you hadn’t taken out the money.
  • The minimum loan is $500 and may be taxable.
  • Your business can repay your loan at any time.
  • The loan will be subject to a loan interest rate set by Canada Life on each policy anniversary.

Cancelling your business' policy

  • Your business will receive the balance left in your account, which is called the cash surrender value.
  • During the first nine years, there’s a penalty in your contract for cancelling your policy, called the surrender charge.
  • No surrender charges may apply for some policies.
  • Your business may be taxed during the year you cancel your policy.

How much does it cost?

Universal life insurance is usually more affordable than participating life insurance. 

There are a lot of factors that determine the cost of your policy, including: 

  • 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

Rates, values and performance

For policies issued after April 11, 2004 to present (no bonus)

For policies issued from April 12, 2004 to December 31, 2016 with client bonus

For policies issued prior to April 12, 2004

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