Permanent life insurance is known for its estate planning benefits. But can it also be an investment tool?

Yes, say Wayne Miller, BMATH, ASA, ACIA, and Sally Murdock, MMATH, MMF, CFA, in their detailed analysis, Life insurance as an asset class.

In April 2013, we asked, Can life insurance be held as an asset class? and briefly explored the value of participating whole life insurance as an alternative asset class. Life insurance as an asset class is a concept that is attracting attention, especially for clients wishing to reduce overall investment risk or to improve the return of the fixed-income portion of their portfolios.

In their article, Miller and Murdock examine the merits of permanent life insurance as an alternative asset class. They do this by describing a typical client profile and looking at how it performs in three areas:

  • benefits to the estate,
  • interim benefits (i.e. liquidity), and
  • relative level of risk.

Their analysis is geared toward high-net-worth investors who are in a position to capitalize on the benefits provided through permanent life insurance and investors who are already using this strategy. They conclude that permanent life insurance, particularly participating whole life, can be an attractive asset class, but only for the right client.

View the executive summary, or contact your Sun Life Financial Sales Director to get a copy of the full analysis.

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Wayne Miller is Regional Vice-President, Central Region & National Accounts, at Sun Life Financial Canada. Sally Murdock is Director, Portfolio Management, at Sun Life Financial Canada.