Life Insurance: In general, life insurance pays a predetermined amount of tax-free money (the life benefit) to the beneficiary, upon the death of the insured. The policy owner can be either the insured, the beneficiary, or another party.

Term Insurance: You are covered for a set number of years (eg 10 or 20 years), at the same monthly rate. The term will renew, if you wish, at a predetermined higher monthly premium for the next 10 or 20 year period.

Whole Life Insurance: As the name indicates, this type of insurance lasts for your entire life. You will pay the same monthly premium for 10 years, 20 years, or the full length of the plan, depending on which option you choose. There are also options for a cash value to build up, over the life of the plan.                           

Universal Life Insurance: A very flexible type of whole life insurance. You can cover yourself, your spouse and your children under one plan for one premium. When your children reaches an age you feel is appropriate, you could transfer their portion of the insurance into their name (so your child would then have their own separate plan). Cash values are also accrued in this type of plan.

Critical Illness: If you are diagnosed with a life-threatening illness (eg, cancer, heart attack, stroke), you are able to submit a claim 30, 60, or 90 days after diagnosis, depending on the type of illness. Upon approval, you would receive a predetermined lump sum payment, tax free.

Disability Insurance: If you are severely ill or injured and you are unable to perform the main duties of your job/profession, for a number of months, then you will receive a monthly payment until you have been deemed by a medical professional to be physically or psychological fit to return to work. The length of time that the policy will pay a monthly benefit is determined by the type of plan you select.

Segregated Funds: A Segregated Fund is an investment tool, but it is considered to be a life insurance product. They operate similarly to a mutual fund (invested in a series of funds; operated by a fund manager; chance of growth or loss); however, there is a minimum guaranteed value at the maturity date of the plan or upon the death of the plan owner. The maturity date can be 10 years after each deposit or longer. The guarantee can be 75% or 100% depending on the plan you choose.

If this sounds odd, please consider the below example:

On August 1, 2020, you purchased a segregated fund with a lump sum deposit of $20,000 including a 100% guarantee after 10 years. On August 1, 2030, in the midst of a recession, the market value of your investment is $16,500. At this point, since 10 years has passed, and you initially selected a 100% guarantee, you would be able to access the original $20,000 if you wished to transfer or cash in the fund.”

The main advantages of a Segregated Fund are: Creditor Protection (if the fund was purchased before personal or business financial issues arose); Avoiding Probate Fees (upon death, the funds can be paid directly to a beneficiary who is an immediate family member); and the Maturity or Death Benefit Guarantee (75% or 100% of your original deposit is fully protected).