Last updated: May 15, 2024

What is whole life insurance?

In Canada, whole life insurance is a type of permanent life insurance that gives you lifelong coverage. Some whole life insurance policies may include a savings portion called the cash value. Your policy’s cash value There may be tax implications if you access your policy’s cash value. allows you to access additional funds during your lifetime. 

Benefits of whole life insurance

Lifelong coverage

You get coverage that lasts a lifetime as long as you pay your premiums.

Fixed premiums

Your premiums stay the same even if your health changes.

Guaranteed tax-free death benefit

Your beneficiaries will get a tax-free payment after you die.

Additional benefits if your policy has cash value

You have access to the policy’s cash value during your lifetime There may be tax implications if you access your policy’s cash value..

The policy’s cash value can grow over your lifetime.

Our whole life insurance products

SunSpectrum Permanent Life II

  • Get coverage up to $25 million.
  • Policy can cover up to two people.
  • Lifelong protection with cash value. 
  • You’ll need to provide medical information.

 

More about Sunspectrum Permanent Life II

Brochure - SunSpectrum Permanent Life II

Ideal for people who:

  • Want to provide their family with income replacement if they die.
  • Need to pay for end-of-life expenses.
  • Want to help ensure their loved ones are not left with debt to take care of.
  • Want guaranteed premiums that never rise.
  • Want to leave an estate for loved ones or provide a gift to their favorite charity.

Sun Life Go Guaranteed Life Insurance

  • Get coverage up to $25,000.
  • Policy covers one person. 
  • Lifelong protection.
  • Guaranteed life insurance with no medical questions asked. 
  • You’re guaranteed to qualify even if you have existing health conditions.

More about Sun Life Go Guaranteed

Brochure - Sun Life Go Guaranteed

Ideal for people who:

  • Want to buy life insurance online quickly.
  • Want to cover end-of-life expenses.
  • Need insurance and have had trouble qualifying for life insurance in the past.

Get whole life insurance

Get advice

Not sure which whole life insurance product is right for you? A Sun Life advisor can help you figure it out and get you a customized quote for any of our products.

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Get a quote and buy online

Looking for coverage up to $25,000? Sun Life Go Guaranteed Life Insurance may be right for you. Get a quote.

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How does whole life insurance work in Canada?

In Canada, a whole life insurance policy offers three important guarantees in exchange for monthly or annual premiums: coverage that won’t expire, fixed premiums and a guaranteed death benefit to your beneficiaries.  

The amount of money your beneficiaries receive depends on how much life insurance coverage you buy. 

Some whole life insurance policies also include a savings portion called the cash value. Savings can grow over time on a tax-preferred basis, meaning you won’t have to pay tax on any cash-value growth.

Whole life insurance cash value

Part of each premium payment goes towards your policy’s cash value. You can access the cash value later in life by taking a loan against the cash value or by taking a partial withdrawal from your policy.  This is helpful for peace of mind, knowing that you have extra funds. These funds can be used for anything, like unexpected expenses or to supplement your income.

Borrowing against your policy’s cash value

When you borrow against your policy’s cash value, you’ll be charged interest. But rates are typically lower than taking a personal loan or home equity loan. 

Unpaid loans also reduce the cash value of the policy or, depending on your policy, can reduce the final death benefit of your policy. There may be additional tax implications from borrowing against your policy’s cash value.

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Withdrawals or surrendering your policy

Withdrawing money from your policy is also known as a partial cash surrender. Partial cash surrenders will reduce the final death benefit of your policy. 

You can also surrender the whole policy to receive the entire available cash value (less some fees). However, this cancels your policy, and the death benefit will no longer be available to your beneficiaries.

Get more help

Not sure if whole life insurance is right for you? A Sun Life advisor can help you figure it out and get you a customized quote for any of our products.

Enter your postal code to find an advisor near you.

Frequently Asked Questions

How much does whole life insurance cost?

Your premiums will depend on various factors such as your age, assigned sex at birth, your current health and how much coverage you need.

Whole life insurance tends to be more expensive than other life insurance plans, like term life insurance. This is because it offers lifelong protection that never expires and premiums that stay the same even as you age or if your health changes. Term life insurance, by contrast, offers coverage for a specific period, and your premiums increase with every renewal. 

Learn more about the differences between whole vs term life insurance

How long do I have to pay for whole life insurance?

In general, you pay premiums for whole life insurance until you pass away. 

But some products give you the option of paying for lifetime coverage over 10, 15, or 20 years. These options will raise your premiums since you are front loading the payments.

Connect with an advisor for more detailed information

Is whole life insurance tax-free?

The death benefit from a whole life insurance policy is tax-free. However, some whole life policies come with a cash value component, which can grow on a tax-preferred basis. This means you won’t have to pay tax on cash-value growth. Please note, there may be tax implications from borrowing against your cash value or surrendering your policy.

Connect with an advisor to learn more

Can I cash out of a whole life insurance policy?

You can cash out of some whole life insurance policies. This means you’ll receive the cash value on your policy (less some fees), and your policy will be cancelled. Part of the money you receive may be taxable.

You also have the option to borrow from your policy if you have a cash value savings component. Keep in mind that doing this may reduce your death benefit.

Connect with an advisor for more detailed information

How much can I borrow from a whole life insurance policy?

If your whole life insurance policy comes with cash value, you can borrow against a portion of it. How much you can borrow depends on how much you have available in your policy's cash value.

Connect with an advisor for more information

How soon can I borrow against my whole life insurance policy?

You can borrow once you have the minimum required cash value in your life insurance policy, which is $250. You must have that much in your cash value in order to borrow from it.

Connect with an advisor for more information

How long does it take to build cash value in a whole life insurance policy?

Some whole life insurance policies begin to accumulate cash value after 3 years.

Does whole life insurance provide dividends? 

Sun Life has participating whole life plans, which give you the chance to earn dividends.

Learn more about our participating whole life products

Submit a claim

Get step-by-step instructions on how to submit an insurance claim.

 

How to submit a life insurance claim

 

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