In a participating policy, the insurance company shares the excess profits called dividends with the policyholder. Typically these dividends are not taxable because they are considered an overcharge of premium. The greater the overcharge by the company, the greater the refund/dividend. For a mutual life insurance company, participation also implies a degree of ownership of the mutuality.
At least 2 factors impact suitability. They are age and budget. Typically, the earlier you apply for permanent insurance the lower the price. You’ll want to have this coverage in place permanently, but may not want to keep paying forever. As a rule of thumb we suggest younger than 5 or older than 55. You may want to consider converting some of your existing Term insurance to Permanent Policy if this is an option on your existing policy.
Generally, you pay into a permanent plan for 20 years to life, and while you pay, you may earn dividends which may purchase additional insurance, create a cash value or even make the payments for you. This is known as "premium flexibility".
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Locked-in Retirement Income Fund (LRIF): The LRIF is similar to a LIF with some additional flexibility in terms of what you can receive in income in any given year. The maximum payment in any year depends on the investment earnings in the previous year. The LRIF does not require annuitization at age 80. LRIFs are only available in some provinces.