Ideal for families and children.
- Lifetime coverage
- Long-term cash value and death-benefit growth
Last updated: May 10, 2024
What is participating life insurance?
Participating life insurance (also called par insurance) is an insurance contract that may pay dividends to the policyholder.
Benefits of participating life insurance
Tax-free payment for your beneficiaries
Lifetime financial protection
Cash value growth
A chance to earn policy dividends
How does participating life insurance work?
Participating Life Insurance offers three important features: lifetime insurance, cash-value growth, and a chance to earn policy dividends:
Lifetime insurance
A participating policy includes whole life insurance protection, which provides coverage that’s guaranteed for life. This means that your coverage will never expire, and your beneficiaries are guaranteed to get a tax-free payment (also called the death benefit) after you die – this is provided you’ve paid your premiums.
Cash value growth
Participating policies also come with a savings portion called the cash value. You can borrow against your cash value or withdraw funds from it. Your cash value can grow over time on a tax-preferred basis. This means you won’t have to pay tax on any cash-value growth, unless you borrow against the cash value above certain limits or start withdrawing funds.
Chance to earn policy dividends
A participating life insurance contract also gives you the opportunity to earn policy dividends. We calculate the amount each year. You can use these dividends in different ways. For example, you can:
- Let them earn interest and grow in a separate account
- Buy additional coverage within your policy
- Reduce your premiums, or
- Receive the amount in cash
Some of these options also come with tax implications. It’s also important to note we don’t guarantee policy dividends.
Our participating life insurance products
Sun Par Protector II
Sun Par Accumulator II
Ideal for families and business owners.
- Lifetime coverage
- Long-term cash value and death-benefit growth
- Higher cash value over the short term
Sun Par Accelerator
Ideal for families and business owners looking to pay up their policy quickly.
- Lifetime coverage that’s fully paid-up in 8 years
- High cash value over the short term
- Long-term cash value and death-benefit growth
Frequently Asked Questions
Is participating life insurance worth it?
It can be. Participating life insurance is a great way to grow your cash value and increase the death benefit for your beneficiaries.
It’s particularly ideal for anyone who’s interested in:
- Lifetime protection and significant savings potential,
- Ways to save for retirement,
- Estate planning and leaving money behind as part of a legacy, and
- Ensuring their policy’s death benefit isn’t drastically affected by inflation.
What’s the difference between participating and non-participating life insurance in Canada?
The main difference is that participating policies give you the chance to earn policy dividends whereas non-participating policies do not.
This means participating policyholders can benefit from the performance of our participating account. But it’s important to note that we don’t guarantee dividends.
What is the difference between participating and universal life insurance?
The main difference is that universal life insurance lets you choose the investment account options in your policy whereas participating life insurance does not. Universal life policies also offer more payment flexibility than participating life policies. However, par insurance gives you the chance to earn policy dividends and offers some payment flexibility. Both participating and universal policies offer lifetime coverage, a death-benefit guarantee and cash-value growth.
How much can I earn from policy dividends?
Policy dividends can change from year to year. Participating life policies are grouped based on certain factors such as the type of policy and when it was purchased. The experience of each group determines the dividends we can allocate to the group. However, it’s important to note that we do not guarantee dividends.