Dividends

Best long-term option for maximizing the cash surrender values and the amount payable upon death, while having access to liquidity, if needed.

• Dividends are used to buy PUAs (single premium permanent life insurance amounts on top of the amount of basic insurance coverage)
• PUAs generate additional dividends as soon as the second year, creating a compounding effect
• The amount payable upon death and the cash surrender value increase
• The total cash surrender value, which remains in the policy, provides an additional tax advantage, as it increases free of taxes

An advantageous option to benefit from a higher amount payable upon death with term insurance (T1), which will gradually be replaced by permanent insurance (BAL).

• The policy is made up of a basic permanent insurance and a yearly renewable enhanced insurance
• The amount of enhanced insurance you can illustrate depends, among other things, on the amount of basic insurance coverage, the age, the gender, the rate class and the premium payment period.
• It can be guaranteed for 10 years or for life, depending on the product. The term is set at the time of issue.
• Dividends granted are first used to purchase a T1 insurance amount, and the surplus is used to obtain paid-up insurance
• Once the T1 purchase is no longer required to cover the enhanced insurance, all dividends are used to purchase PUAs that increase the amount payable upon death. In time, the enhanced insurance will be made up solely of PUAs.
• T1 insurance can be converted into an eligible permanent life insurance product if the following conditions are met:
  • The policy was issued 7 years or less or 10 years ago or more, depending on the product
  • The converted permanent life insurance amount cannot exceed the T1 insurance amount in force
  • The converted permanent coverage does not provide for any indexing of the insurance amount or a premium refund upon death
  • The insured has to be under 70 years
  • The tax-exempt test requirement has been met
  • The premium is calculated as per the rate in effect and at the nearest birthday
  • The permanent coverage becomes effective on the date on which the application is received at the head office.
  • The enhanced insurance is reduced by the T1 insurance amount converted into permanent coverage. Then, the dividend option is automatically changed to PUAs
• The enhanced insurance amount is guaranteed for 10 years or for life. The guarantee period is chosen at the time of issuing the contract

• Dividends are used to reduce the annual premium.
  
• If there are not enough dividends to pay the whole premium, the policyowner must cover the difference. If they are higher than the premium, the excess is paid to the policyowner by cheque and may be taxable.
• The amount payable upon death remains consistent over the years.

• Dividends are paid by cheque to the client and can be taxable.
• The amount payable upon death remains consistent over the years.

• Dividends granted are deposited in a savings account managed by Desjardins Insurance. Upon death, the accumulated dividends from the savings account are added to the amount payable, tax-free.
• Dividends credited may be taxable. The account generates taxable interest credited once a year.
• Withdrawals from this account are allowed at any time.
• This option allows the cash surrender values and the amount payable upon death to grow.

Accelerated Growth or Estate Enhancer

The policyowner may change options at any time, if the policy remains exempt from tax. The direction of the arrows indicates the possible changes.

5 Pay PAR

Enhanced insurance is the only option offered at the policy issue. The policyowner may change options after 10 years if the policy remains tax-exempt. The direction of the arrows indicates the possible changes.