Permanent life insurance
Permanent life insurance: coverage guaranteed for your whole life
Coverage designed to last a lifetime, provided the policy stays in force. Depending on the product, premiums and cash values may be guaranteed or variable.
- Death benefit guaranteed for life
- Level premiums, payable over 10, 15, 20 years or for life
- Guaranteed, accessible cash value
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What is permanent life insurance?
Permanent (or whole) life insurance pays your beneficiaries a tax-free amount at your death, whenever it occurs. Unlike term insurance, it has no expiry date: as long as premiums are paid, coverage is yours for life.
Part of each premium builds a guaranteed cash value that grows tax-sheltered. You can access it during your lifetime — by withdrawal, policy loan or collateral loan — or let it accumulate for your heirs.
At a glance
- Term
- Lifetime
- Relative cost
- $$$
- Cash value
- Guaranteed
- Premium payment
- 10, 15, 20 years or life
Free · No obligation · An advisor compares insurers for you
How it works
- 1
You set the amount
Estate costs, taxes at death, legacy, planned gift or business buy-out: the amount is set for a need that will never go away.
- 2
You choose the payment period
Premiums payable over 10, 15 or 20 years, to age 65 or to age 100. The shorter the period, the higher the premium, but the contract is then fully paid up.
- 3
Value accumulates
The guaranteed cash value grows each year according to a schedule written in the contract, unaffected by markets.
- 4
You use it or pass it on
While alive: withdrawal, policy loan or advance. At death: the amount is paid to your beneficiaries, outside the estate and tax-free.
Advantages
- Coverage guaranteed for life: the insurer can neither cancel the contract nor raise the premium
- Guaranteed cash value growing tax-sheltered
- Accelerated payment option: contract paid up after 10, 15 or 20 years
- Benefit paid directly to beneficiaries, bypassing the estate (fees and delays avoided)
- Estate planning tool: covers deferred tax on a cottage, RRSPs or a business
- Can guarantee liquidity for a business (shareholder agreement, key person)
Things to consider
- Initial premium significantly higher than term insurance for the same amount
- Cash value is small in the first years; surrendering early loses part of the premiums paid
- A withdrawal or surrender may trigger tax on the gain portion
- An unpaid policy loan reduces the amount paid at death
- Less suited to a large temporary need (mortgage) — often combined with term insurance
Options and riders
Depending on the insurer, several options can be added to the base contract to fit your situation.
Term rider
Adds term coverage (10, 20 or 30 years) to the same contract to cover a large, one-time need at low cost.
Waiver of premium
On total disability, the insurer pays the premiums for you and the value keeps growing.
Child rider
Covers your children for a modest amount, convertible to individual insurance at adulthood without evidence of health.
Guaranteed insurability
Lets you increase the amount on set dates without new evidence of health.
Accidental death
Additional benefit if death results from an accident.
Built-in critical illness
Lump sum at diagnosis of a covered illness, in the same contract.
Term or permanent?
The two often complement each other: term for the large but time-limited need, permanent for the lifetime need.
| Criterion | Term insurance | Permanent insurance |
|---|---|---|
| Coverage period | 10 to 40 years, renewable | Whole life |
| Premium | Low at first, rises at renewal | Higher, but level for life |
| Cash value | None | Guaranteed and growing |
| Ideal for | Mortgage, family income, loan | Estate, tax at death, legacy, business |
Who is it for?
- People who want coverage guaranteed to the end of their life
- Owners of a cottage, a building or a business who want to cover tax at death
- Parents and grandparents who want to leave a legacy or insure a child early
- Business owners (shareholder agreement, key person, corporate-owned insurance)
- Anyone who wants to settle final expenses and last taxes once and for all
Options to compare with your advisor
Trademarks of their respective owners. Sommet Protection is not affiliated with any insurer and does not distribute any product.
How it works
- 1
Request your callback
Your coverage, your first name, your mobile: three answers are enough. The rest is optional.
- 2
An advisor contacts you
Your request goes to one partner advisor, who calls you at a time that suits you. You follow the progress live.
- 3
Receive your scenarios
You get clear options, with the advantages and limits of each. You decide.
Frequently asked questions
What is the difference between whole life, universal life and participating life?
They are three forms of permanent insurance. Whole life offers fully guaranteed premiums and cash value. Universal life separates the insurance from an investment account whose funds you choose. Participating life adds non-guaranteed dividends paid by the insurer that increase the coverage and value over time.
Why pay premiums over 20 years instead of for life?
Paying over 10, 15 or 20 years costs more each month, but the contract is then paid up: nothing left to pay in retirement, while keeping the coverage and the value growth.
Can I withdraw the accumulated money?
Yes, through partial surrender, policy advance or a loan secured by the cash value. Each option has tax effects and reduces the death benefit if not repaid; your advisor compares them with you.
Can permanent insurance be used as an investment?
It offers guaranteed, tax-sheltered growth that can complement RRSPs and TFSAs once those are maximized, notably for estate planning or a corporation. It is not, however, a substitute for a diversified investment portfolio.
Is the death benefit taxable?
No. A life insurance death benefit is paid tax-free to the named beneficiaries, and it is not part of the estate when a beneficiary is named.
Can I insure my child or grandchild?
Yes. Permanent insurance bought young costs very little, guarantees lifetime insurability and builds a value the child can use later. The contract can be transferred to them at adulthood.
Is there a medical exam?
It depends on age, amount and insurer: questionnaire, blood test or paramedical exam. Simplified versions without an exam exist for more limited amounts.
Complementary coverage
Our coverage
Choose the coverage you're interested in — your advisor can also combine them.
Life insurance
Term, permanent, universal, participating or simplified issue: understand the differences, then let an advisor compare insurers for you. Free and without obligation.
Learn moreTerm life insurance
Cover your mortgage, your debts and your family's income for a specific period. Your advisor compares terms, premiums and options from several insurers.
Learn moreUniversal life insurance
Lifetime insurance paired with an investment account you control. You decide the amount deposited, the funds selected and the pace of deposits, within tax limits.
Learn moreParticipating life insurance
Permanent insurance whose death benefit and value increase each year through dividends paid by the insurer — without you having to manage investments.
Learn moreSimplified issue life insurance
A few health questions, no blood test, no medical appointment. Coverage that stays accessible even if you were declined elsewhere or have a health history.
Learn moreDisability insurance
Illness or accident: your ability to earn an income is your most valuable asset. Disability insurance pays you a monthly benefit while you recover.
Learn moreCritical illness insurance
At diagnosis of a covered illness, you receive a tax-free amount to use as you wish: care, time off, help at home, debts. No requirement to be unable to work.
Learn moreSommet Protection is a marketing company: it is neither a firm nor an insurer, does not sell insurance and gives no advice. This site does not allow you to purchase insurance online. Your request is passed on to an independent, AMF-certified partner financial security advisor who will contact you to analyze your needs. Eligibility and premiums are established by the insurer after reviewing your file. Product descriptions are provided for information purposes and do not replace the insurance contract, which alone prevails.