UNIVERSAL LIFE INSURANCE
Flexib le perma n ent p r ot e c t i on
A solution to your financial
security needs and goals
Universal life insurance from London Life
At London Life, we create products to help you meet your financial
security needs and goals. Our universal life insurance policy can help.
It combines permanent life insurance protection with the opportunity
to accumulate tax-advantaged savings. In fact, it may be the only
insurance policy you’ll ever need.
Do I really need life insurance? During your lifetime, it can:
Most people do. Life insurance helps create Build tax-advantaged savings, which you
security for you and your family. If you can draw upon as needed for personal
should die prematurely, it can be used to: or business opportunities
Pay final expenses and any debts you Supplement your retirement income
may have Provide funds for long-term care or
Provide an income for your family home care
Ensure your family has the resources to You’ve worked hard to build the lifestyle you
maintain a comfortable standard of living enjoy today. You have made sound decisions
that meet your investment style and financial
Pay any taxes owing on your estate so
objectives. London Life universal life insurance
more of your estate is transferred to your
can help you protect your plans.
children or grandchildren
Leave a legacy to your favourite charity
Provide your business with the funds
necessary to fund a buy-sell agreement
Protect your business against the loss
of a key employee
UNIVERSAL LIFE INSURANCE | Flexible permanent protection from London Life 3
Tailor your insurance coverage to fit your lifestyle.
Flexibility and choice
Flexibility Choose your style of interest options
London Life universal life insurance may be the Choose between two styles of interest
only life insurance policy you will ever need. options: with or without client bonus.
As your family, business or individual needs
Interest options with client bonus have an
change, it has the flexibility to change with
enhanced interest-crediting rate, based on
you. Tailor your insurance coverage to fit your
funding levels in the second policy year and
lifestyle, budget and financial security goals.
beyond. As well, regardless of funding levels,
Tax-advantaged investment all policies with our client bonus option
component will receive a bonus interest-crediting rate
beginning in the 10th policy year.
The total account value in your universal life
policy grows on a tax-advantaged basis. Our universal life without client bonus has
lower interest option fees. For a comparison
The insurance proceeds that will be paid to
of interest option fees, see London Life’s
your beneficiary upon your death are tax-free
Universal life insurance interest options brochure.
and may include the total account value that
you have been accumulating in your policy Use our Determine your risk profile
over the years. Maximize the tax-advantaged questionnaire to assist you in selecting
investment component of your life insurance interest options that will match your risk
policy, while meeting your life insurance tolerance and financial security goals. Create
needs, with our Value Maximizer option. a mix of interest options specific to you, or
use one of our five folio interest options to
give you the diversification you’re seeking
without the need for daily management.
4 UNIVERSAL LIFE INSURANCE | Flexible permanent protection from London Life
Choose between two types of life Adjust your insurance protection as
insurance protection your needs change
The level death benefit option pays your London Life universal life insurance allows
beneficiary the greater of the insurance you to change your coverage to reflect your
face amount or the total account value. In changing needs. Please note that some
both cases, the payment is reduced by any changes may require evidence of insurability,
indebtedness to London Life under a policy such as:
loan. As your total account value increases, Changing cost of insurance options
it becomes, in effect, a larger portion of
your death benefit, reducing the cost of
Increasing your insurance amount
your insurance coverage. Changing from the level death benefit
If at any time your total account value option to the coverage plus death
decreases, due to a decrease in the market benefit option Total account value
index or mutual funds used as an index, Adding a benefit or rider
your insurance coverage will increase, Insurance amount
as will the associated cost, to maintain
your level death benefit. This benefit is Level death benefit
ideal if your insurance needs are not likely Death benefit
to increase, and if you want to maximize
your total account value in the early years.
The coverage plus death benefit option
pays your beneficiary the insurance
amount plus the total account value. As Total account value
your total account value grows, it’s added
to your life insurance coverage, rather than
reducing your insurance cost, resulting in
a death benefit that grows over time.
However, if at any time your total account Coverage plus death benefit
value decreases, due to a decrease in
the market index or mutual funds used
as an index, your total death benefit
will decrease. There is no change in the
coverage used to determine your cost of
insurance charges. This option should be Total account value
considered when your insurance needs are
likely to increase, or if your objective is to Insurance amount
accumulate tax-advantaged savings and
you plan to use level or limited-pay cost
of insurance. Death benefit
Total account value
UNIVERSAL LIFE INSURANCE | Flexible permanentInsurance amount
protection from London Life 5
Life insurance helps create security
for you and your family.
Insure more than one individual
Multiple lives benefit Joint last-to-die
Insure up to five additional lives under your This coverage covers two people and provides
policy, each with its own permanent life a death benefit on the second death of
insurance coverage and the possibility of a the lives insured. It’s often used for estate
separate beneficiary. You can remove one or preservation needs, such as providing cash to
more of these lives and add new lives in their cover the cost of taxes on capital gains and
place, within the maximum allowed, with on registered retirement savings plans (RRSPs)
evidence of insurability, at any time. Structure and registered retirement income funds
your multiple lives coverage in a way that (RRIFs) that arise at death. For eligible joint
meets your needs. last-to-die coverage, we also offer a benefit on
first death option, which allows a beneficiary
Joint coverages to receive a portion of the policy’s existing
The following assumes two lives jointly total account value upon the first death of
insured. More than two lives may be possible, the lives insured.
subject to additional underwriting.
Changing joint first-to-die to joint
Joint first-to-die last-to-die
This coverage covers two people and provides You have the option of changing your joint
a death benefit on the first death of the lives first-to-die coverage to joint last-to-die
insured. The survivor then has the option coverage, for annually increasing and level
to purchase insurance in an equal amount, cost of insurance options. Or you can change
based on his or her attained age at that your joint first-to-die coverage to two single-
time, without evidence of insurability. This life coverages, each for 50 per cent of the
coverage should be considered when insuring original death benefit. Changing joint first-to-
a debt, such as a mortgage or a loan, or for die to joint last-to-die is currently unavailable
providing income replacement. for the limited-pay cost of insurance option.
6 UNIVERSAL LIFE INSURANCE | Flexible permanent protection from London Life
Cost of your protection Changing cost of insurance options
Part of the premium you pay into your policy You can change the cost of insurance
covers the cost of the insurance protection. option from annually increasing or level
This includes the cost for the primary and to limited-pay, subject to rules and limits
additional lives insured, as well as any specified in your contract.
optional benefits you select. Life insurance
You can change the cost of insurance
costs generally increase with age. London Life
option from annually increasing to level,
universal life insurance allows you to manage
subject to rules and limits specified in
this increase with the following cost of
Your financial security advisor can help
The limited-pay cost of insurance option
you select the cost of insurance option
(10 pay, 15 pay and 20 pay) offers a set
or combination of options that best suits
cost of insurance period, guaranteed for
the duration of the coverage. Guaranteed
cash values start at the end of the fifth Expense charges and fees
anniversary of coverage. This coverage, A guaranteed expense charge of $10 will be
and therefore the guaranteed cash value, deducted from your policy each month.
can be reduced at any time. As long as you If your primary coverage has a limited-pay
pay the required cost of insurance charges cost of insurance option at issue, the $10
during the required period (10 pay, 15 pay expense charge stops at the end of the chosen
or 20 pay), the associated death benefit cost of insurance paying period (10 pay,
amount is guaranteed. 15 pay or 20 pay).
The annually increasing cost of insurance Also, if you chose to invest in a variable
rate increases annually as your age interest option an interest option fee will be
increases, but the rate scale is guaranteed deducted from the returns realized by the
for the duration of the coverage. It starts variable interest option.
out lower in the early years, allowing you
to accumulate more of your premium in Premiums
your chosen interest options and accelerate Choose the amount of premium you wish
the growth in your total account value. to pay, within the minimum and the
maximum premium defined in the contract.
The guaranteed level cost of insurance
The maximum premium is set to keep the
rate is locked-in for the duration of the
policy exempt from taxation. The minimum
coverage, once it’s set. It allows you to
premium is set by London Life, based on your
spread your insurance costs evenly over the
age, sex and smoking status.
life of the policy.
As your total account value accumulates, you
may choose to reduce or suspend
UNIVERSAL LIFE INSURANCE | Flexible permanent protection from London Life 7
Helping you build a lifestyle
you can enjoy today.
out-of-pocket premium payments altogether, of one of your interest options has declined
without jeopardizing your insurance coverage. in a particular month, the proportion of
Depending on the interest earned and the the deduction from that interest option will
level of the total account value in your policy, decrease as well.
you may be required to resume premium
payments in the future. Premium-paying period
Premiums can be paid for the entire life of
Premium allocation the policy. The limited-pay cost of insurance
After the applicable provincial premium tax option guarantees the cost of insurance
is deducted (two per cent in most provinces), charges for the chosen period of time. If the
your premium will be allocated to the interest interest option chosen is variable and returns
options you select, according to percentages are negative, you may need to pay additional
you stipulate. You may also make lump-sum premiums to fund the cost of insurance
premium payments into your policy at any charges for the coverage. After the cost of
time. There are no other charges applied insurance period ends, you have the option
to the premium before it’s invested in your to continue to pay premiums. Both of these
chosen interest options. actions will enhance the tax-advantaged cash
accumulation in the investment component.
The cost of insurance, premiums for riders
Where the coverage plus death benefit option
and other benefits, and the monthly expense
is in effect, this would also have the effect
charge will be drawn every month from your
of increasing the death benefit under the
total account value, in accordance with the
withdrawal provisions of your policy and our
For withdrawals made from a like group of
accounts, our current practice is to make
withdrawals on a pro-rated basis, according
to the dollar value of each interest option
on that date. This means that if the value
8 UNIVERSAL LIFE INSURANCE | Flexible permanent protection from London Life
Side Account You can also elect to have it decrease your
London Life may monitor your premium insurance amount when appropriate,
payments, as part of its overall efforts to to reduce the cost of insurance charges being
help ensure your policy remains exempt deducted and maximize the accumulation in
from accrual taxation. If you wish to pay a your total account value.
premium in excess of the maximum premium
allowable for your policy, and if London Life
Choose between London Life universal life
is aware the premium is in excess, London
insurance with or without client bonus.
Life will deposit this excess premium directly
Policyowners who choose our universal life
into the Side Account, a premium account
insurance with client bonus are eligible to
that is separate from your insurance policy
receive two kinds of interest bonuses.
and provided under a separate contract.
Guaranteed bonus – Starting in policy
The funds in your Side Account can be
year 10, a guaranteed bonus enhances your
invested in either a daily interest option or
policy’s interest-crediting rate on the funds
five-year guaranteed interest option. Since the
within the total account value. The annual
Side Account is separate from your insurance
bonus rate is 0.6 per cent from policy
policy, any interest income generated by these
years 10 to 24 and 0.96 per cent every
investments is fully taxable. London Life will
year thereafter. The bonus is guaranteed
transfer funds from your Side Account to your
to be paid regardless of how your policy’s
insurance policy to accelerate the growth
interest options perform.
of your tax-advantaged total account value,
provided these payments do not exceed the Funding bonus – In addition to the
maximum premium allowable for your policy guaranteed bonus, you may receive a
based on current tax legislation. funding bonus of up to 0.96 per cent of
your total account value. This can begin
Value Maximizer – further as early as policy year two if you are
tax advantages making significant premium payments to
Your policy is designed to ensure any growth your policy or if your total account value
of the policy’s total account value remains exceeds certain minimum thresholds.
exempt from accrual taxation under current
The dollar amount of the guaranteed and
tax legislation. If you wish to maximize
funding bonuses is a function of your policy
your tax-advantaged savings, you can add
total account value, which will fluctuate. The
the Value Maximizer option. This feature
client bonuses don’t apply to funds held in
provides for adjustments to your insurance
the Side Account.
amount that would allow you to enhance the
tax-advantaged accumulation within your Your financial security advisor can help you
universal life insurance policy. decide which version of London Life universal
life insurance you should choose – with client
The Value Maximizer option will
bonus or without client bonus. London Life
automatically increase your policy’s insurance
universal life insurance, without client bonus,
component each year, by as much as eight
has lower interest option fees charged to the
per cent of your previous year’s death benefit,
policy’s interest options.
to maintain your policy’s tax-exempt status.
UNIVERSAL LIFE INSURANCE | Flexible permanent protection from London Life 9
Interest options Market value adjustment (MVA) – A market
Choose from a variety of interest options. value adjustment is a charge that may be made
Develop an interest option mix to suit to an amount held under a guaranteed interest
your investment objectives and your option account when an amount is transferred
risk-tolerance level. out of the account before the end of the term
period or at surrender or lapse of the policy.
When selecting your interest options, The market value adjustment may also be
you should consider the volatility of each charged on any unscheduled withdrawal of
interest option. The following interest options funds that have been invested at a guaranteed
are currently available: interest rate within the Side Account.
Daily interest option (DIO) – Earns interest Market value adjustments apply only
daily which is credited monthly. where the guaranteed interest option has
Guaranteed interest options (GIOs) – Select a been elected and current interest rates for
guaranteed interest option with annual terms, similar terms have increased. Transfers from
currently one-, three-, five- or 10-year terms. the guaranteed interest option made by
The compound-interest guaranteed interest London Life to pay the monthly charges,
option earns interest daily on the balance or to maintain the tax-exempt status of your
in the guaranteed interest option, at the policy, will not be subject to a market value
guaranteed interest rate, until the end of the adjustment. Transfers from the Side Account
term. Interest is credited to the balance into the policy are also not subject to a market
on a monthly basis until the end of the value adjustment.
Variable interest options (VIOs)
At maturity of the guaranteed interest option Returns credited on the variable interest
term selected, the principal and interest will options follow the returns from widely
be automatically reinvested in a guaranteed recognized investment market indexes and
interest option of the same type and duration, mutual funds.
unless, at that time, you instruct us otherwise.
The index-linked and fund-linked variable
The minimum amount required to establish
interest options credit interest each business
each guaranteed interest option is $25.
day, at a rate based on daily changes to the
Under no circumstance will the rate paid underlying investment market index or the
fall below: underlying mutual fund, net of the mutual
fund’s management expense ratio, after
Term Minimum interest rate
deducting an administration fee (interest
1 year 0.0%
option fee) for the particular interest option.
3 years 0.0% The interest credited on any particular day
5 years 2.0% may be positive or negative. If the interest
10 years, 2.5% credited is negative, the balance in that
with client bonus1 interest option will be reduced.
10 years, 3.0%
without client bonus2 The variable interest options allow for
enhanced diversification and potentially
1. Also for policies without client bonus dated before May 26, 2008
2. For policies dated May 26, 2008, or later
greater returns, but with increased risk and
volatility. These options are not an investment
in securities; they credit returns that are linked
10 UNIVERSAL LIFE INSURANCE | Flexible permanent protection from London Life
to recognized market indexes or mutual funds, number of well recognized mutual funds
affording you a convenient way to mirror an that represent various asset classes, net of the
investment in the market without actually mutual fund’s management expense ratio
buying securities. after deducting an administration fee (interest
option fee) for the particular interest option.
Unlike the guaranteed interest option, the
The interest credited for any particular day
variable interest option has no maturity date.
may be positive or negative. If the interest is
Once funds have been allocated in a variable
negative, the balance in that folio option will
interest option, they will remain allocated
until you request a transfer or withdrawal,
or the account is surrendered to pay monthly Complete our Determine your risk profile
deductions. questionnaire, which asks about the amount
of investment risk you are comfortable with
It’s important to remember that the performance
and helps balance that comfort level with
of variable interest options with a foreign
your financial objectives and circumstances.
element, such as the Global Equity and American
Based on your responses, it determines a risk
Equity options, is directly affected by the value
profile ranging from conservative to aggressive,
of Canadian currency relative to the currencies
designed to help you achieve your goals.
measured in the indexes. A declining Canadian
dollar enhances returns, in Canadian dollars, For more information on our universal life
while an escalating dollar has the opposite effect. interest options, refer to London Life’s
Universal life insurance interest options brochure.
Index-linked variable interest options
The interest rate factor for an index-linked
variable interest option account is set every Accessing your policy
business day and isn’t guaranteed. account value
Fund-linked variable interest options Withdrawals
London Life currently offers fund-linked You may take a partial withdrawal of cash
options ranging from conservative to from your policy at any time providing
aggressive, in terms of risk tolerance. The sufficient funds remain in the cash surrender
interest rate factor for a fund-linked variable value to keep the policy inforce and cover any
interest option account is set every business applicable surrender charges and policy loans.
day and isn’t guaranteed. If you have more than one interest option,
you must give London Life written direction
Folio interest options as to the account from which the withdrawal
Investment markets and the economy are in a should be taken. The minimum withdrawal
constant state of change. Various investments is $500.
and asset classes react differently to these
If you withdraw cash from a policy with a
changes – some may increase in value, while
level death benefit option, your death benefit
others may decrease in value.
will decrease by the amount of cash value
A key element in reducing investment risk is reduction. A market value adjustment may
diversification. Our folio interest options are apply to funds withdrawn from a guaranteed
a set of variable interest options that achieve interest option before the end of the interest
diversification by crediting interest at a rate guarantee period. A taxable policy gain may be
based on the investment performance of a reported for the year of withdrawal.
UNIVERSAL LIFE INSURANCE | Flexible permanent protection from London Life 11
You can change your interest-options mix or transfer
funds within your policy as often as you like.
Policy loans Surrender
You may take a policy loan at any time, If you surrender your policy during the first
providing sufficient funds remain in the cash nine policy years, London Life will deduct a
surrender value to keep the policy inforce and surrender charge as defined in the contract.
cover any applicable surrender charges. Policy You will then receive the balance, known as
loans are available on the guaranteed cash the cash surrender value. A taxable policy gain
value when the limited-pay cost of insurance may be reported for the year of surrender.
option is selected, once the total account
No surrender charges apply for the
value is used up.
limited-pay cost of insurance options.
The minimum loan is $500. The loan will be
subject to a loan interest rate that is set each Meeting your changing needs
policy anniversary by London Life. As the policyowner, you decide how you
want to apply your money. As your objectives
The loaned portion will continue to earn change over time, you can change your
interest, based on the performance of the interest-option mix or transfer funds within
interest option from which the loan was your policy as often as you like. A market
taken. Because market fluctuations may value adjustment may apply to funds
adversely affect your policy’s total account transferred out of a guaranteed interest option
value, London Life limits the amount of your before the end of the guarantee period. Your
variable interest options available for loan financial security advisor can help you review
to 75 per cent of the value in these options. your coverage requirements and investment
Policy loans may be taxable, depending on mix on a regular basis to ensure your policy
the adjusted cost basis of the policy when the is still meeting your long-term goals and
loan is taken. Policy loan amounts that were changing circumstances.
taxed when taken are later deductible when
repaid. Policy loan repayments may be made Disability lump-sum benefit
at any time. If you choose this benefit on the application,
the policy will provide for a disability
lump-sum benefit. In the event you become
12 UNIVERSAL LIFE INSURANCE | Flexible permanent protection from London Life
totally disabled, subject to the definitions contract. If the insured is a minor, and the
in the contract, this benefit is paid from automatic payment benefit on disability is on
a portion of any unloaned portion of the the parent, a specified amount is deposited
policy’s available total account value, into the policy until the insured child’s
excluding any amounts invested in 25th birthday.
guaranteed interest options. This provision
The automatic payment benefit on death
applies only to the primary or joint life
provides that London Life will pay a specified
insureds named in the policy.
amount into your policy, determined at the
time of application, if an insured or premium
payor dies. If the insured is a minor, and the
Customize your policy
automatic payment benefit on death is on
London Life universal life insurance is flexible
the parent, a specified amount is deposited
permanent insurance protection. It offers a
into the policy until the insured child’s
broad range of benefits that can be added or
removed as your needs change.
The accidental death benefit provides that
Our preferred term riders provide low-cost
your beneficiary will receive an additional
additional term insurance protection to age
death benefit on top of the original base
85. Premiums renew automatically every
insurance amount, if your death occurs by
10 or 20 years. These riders offer preferred
accidental means as defined in the contract.
risk rates for face amounts of $250,000 and
greater if you qualify. You choose which The guaranteed insurability rider allows you
renewal period fits your needs best. Term 10 to purchase additional amounts of permanent
coverage is convertible to age 70, or for two insurance, at specified option dates,
years after issue if the issue age is greater without providing any medical evidence
than 70, and is renewable to age 85. Term of insurability. You can get up to $800,000
20 coverage is convertible to age 70 and additional coverage in the future without
renewable to age 85. providing medical evidence.
The child’s life insurance rider provides term
insurance protection on the children in your
Keeping you informed
immediate family for a set annual premium.
London Life will send you an annual
The amount of this coverage increases by
statement detailing the status of your policy.
four per cent every year, and additional
This statement tells you the interest options
children are automatically insured 15 days
in which your money is invested and how it’s
after birth. The coverage may be converted to
performing. The total account value of your
a permanent plan of five times the original
life insurance policy is also detailed in your
coverage amount for each child when he or
annual statement, along with a summary of
she reaches a specified age.
your insurance coverage.
The automatic payment benefit on
London Life suggests you review your policies
disability provides that London Life will
with your financial security advisor regularly
pay a specified amount into your policy,
to ensure your universal life policy is still
determined at the time of application, if you
meeting your insurance needs and
become totally disabled as defined in the
UNIVERSAL LIFE INSURANCE | Flexible permanent protection from London Life 13
Glossary of common terms Expense charge
Adjusted cost basis (ACB) A fixed amount of $10 deducted from the
policy’s total account value every month to
Generally, this is the total of the premiums
cover administrative costs. This amount is
you have paid, less the cumulative cost
guaranteed never to increase for the life of the
of pure insurance over the years, less all
monthly charges for additional benefits and
riders that are not for life insurance, less Interest option
any charges for substandard ratings, less
One of several investment accounts in which
any policy loans taken in the past, less any
your premiums may be credited within your
withdrawals taken in the past, plus any policy
life insurance policy.
gains in the past.
The person (or persons) who is insured under
The person (or persons) who has been named
the terms of the life insurance policy.
by the policyowner to receive the death
benefit when the life insured dies. Policy
The contract issued to you by London Life
Cash surrender value
that stipulates the terms and conditions of
Your total account value minus any applicable
surrender charges, indebtedness (e.g., a policy
loan) and market value adjustments. This is Policyowner
the amount you will receive if you cancel The person who owns and holds all rights
your policy. under the policy, including the power to
name and change beneficiaries, obtain a
Cost of insurance (COI)
policy loan, assign the policy to a financial
The cost of insuring a particular individual for
institution as collateral for a loan, withdraw
a certain coverage. It’s based on the amount
funds or surrender the policy for its cash
of coverage, as well as the underwriting class,
age, sex and tobacco consumption of that
individual, as well as the cost of insurance Premium
option chosen. The amount you contribute to the policy to
maintain your insurance coverage and your
The total amount paid out tax-free to
the beneficiary on the death of the life Total account value
insured. The death benefit may include the The sum of all the interest options in your
investment component that you have been policy, including interest. It doesn’t include
accumulating. any guaranteed cash value from limited-pay
Evidence of insurability
Evidence submitted to London Life that is
used to determine whether an individual is
eligible for the insurance coverage applied for
on that individual.
14 UNIVERSAL LIFE INSURANCE | Flexible permanent protection from London Life
Need more information? London Life – serving our
You can find out more about universal life clients since 1874
insurance and our other products and services London Life Insurance Company has helped
by calling your financial security advisor or Canadians meet their financial security needs
local office. As your insurance and investment for more than 130 years and has almost two
needs change over time, regular reviews of million clients.
your coverage with your financial security
London Life has more than $54 billion* of
advisor will help keep your policy on track
assets under administration.
with your objectives.
London Life is a subsidiary of The Great-West
You may want to keep this guide with your
Life Assurance Company. Together, Great-
policy as a handy reference.
West and its subsidiaries – London Life and
You can also call London Life directly at Canada Life – serve the financial security
1-877-566-5433. A client service needs of 12 million people across Canada.
representative will answer your questions and London Life, Great-West and Canada Life are
resolve any service issues you might have. members of the Power Financial Corporation
group of companies.
*As at Dec. 31, 2006
While every effort has been made to ensure the accuracy of the information in this brochure at the date of printing, some errors
and omissions may occur. In the event of a discrepancy, the terms of the London Life universal life insurance contract will prevail.
London Life and design are trademarks of London Life Insurance Company.
This item is made with 50 per cent recycled paper and 25 per cent post-consumer fibre. 46-3482-7/08
16 UNIVERSAL LIFE INSURANCE | Flexible permanent protection from London Life