Designed for high income, high net worth investors ($500,000 networth minimum) to enhance returns on their non registered investments.  It can also be an effective strategy to reduce the cash flow requirements to fund permanent insurance. It is an up-front strategy that uses universal life insurance to secure a collateral loan for investment purposes.

Benefits of the Investment loan strategy are: The loan interest may be tax deductible.  The growth inside the universal life policy is tax-deferred. Possible enhanced investment returns on the portfolio created with the borrowed funds.  Possible reduced cash flow to fund insurance costs-compared with traditional product solutions.  Client maintains direct ownership and control over the investment portfolio. In addition, the client's heirs/estate will benefit from tax-free death benefit.

Individual Client: "I have a substantial amount of non-registered capital and would like to invest it in a more tax efficient manner.  Insurance is not important to me but if it is available, it will be a bonus to my estate plan.  I will be in the highest tax bracket for the rest of my life."

Corporate Client:  "I am a shareholder of a Canadian Controlled Private Corporation and have a substantial amount of trapped surplus inside my corporation.  I would like to invest it in a more tax-efficient manner. 

Client does not have to meet the minimum financial requirement of $500,000 net worth.

Investment policy loan is an up-front loan leveraging strategy suitable for clients with substantial taxable-income and significant non-registered investments.  Client deposits a portion of their highly taxed non-registered assets in an universal policy and immediatley borrows back as much as the pollicy allows for.  The minimum initial investment has been set at $30,000 plus the minimum premium.

When the additional deposit to the minimum premium in the first year only, is $350,000 or more, no provincial premium tax is charged to the contract for additional deposits made, for the entire duration of the contract.  Advantage: by combining this option with the UL financial strategy with investmet loan, the client has access to a loan equal to 100% of the additional deposit made within the policy.  EXAMPLE:  A client who deposits $500,000 in excess of the minimum premium will be entitled to take out an investment loan of $500,000.  Without this option, the client is entitled to an investment loan of $490,000, i.e. $500,000 less $10,000 in tax on the premiums deducted from the deposit (based on a 2% provincial premium tax rate).  The optional feature is available only at the time of issue.