Whether you reinvest or not is your choice. We'd like you to understand some of the advantages of reinvesting so that you can make an informed decision:
Reduced mortality cost – the cost of mortality on this new Universal Life product is lower than other insurers’, which makes it one of the most competitive in the market and more sustainable in the long run.
Increased coverage – The new proposed insurer provides a significant increase in coverage for a number of years, with an option to reduce coverage afterwards.
Increased cash reserve – a combination of your monthly contributions, plus new rebate and lower mortality costs will create a greater cash reserve inside your policy.
Reset Adjusted Cost Base (ACB) – The ACB determines the taxability of the cash reserve. The longer the policy is in force, the lower the ACB becomes which makes your cash reserve more taxable. Switching insurers shelters your cash reserve for longer.
Improved control of investments – Many carriers have a wide variety of fund options to create suitability for risk tolerance. Some also even credit a 1% bonus annually.
We will further explore all your options at our next meeting.