In Canada in 2025, life insurance isn’t just about providing a death benefit for your loved ones — it can also play a meaningful role in wealth accumulation, tax-efficient planning, and long-term financial security. But not all life insurance plans are created equal. To get the best return (or cash-value growth, dividend performance, or policy benefits) you need to choose very carefully.
Below are seven life insurance plans (or plan types) in Canada that stand out for their potential returns and wealth-building features. These are geared especially for individuals in the U.S. & Canada high-CPC audience but living/doing business in Canada.
Key Things to Understand Before You Choose
- Participating (Whole) Life vs Term vs Universal: Term life gives you pure protection; it doesn’t build cash value. Participating whole life gives you protection + a share of dividends + cash value growth. Universal life offers flexible premiums and investment account features.
- Dividend Scale Interest Rate (DSIR): For participating policies, this indicates the rate used by the insurer to project future dividends. Higher DSIR = potentially higher cash value growth. For example, one source notes “Dividend Scale Interest Rate 6.40%” for some plans. (PolicyAdvisor)
- Insurer Strength & History: A strong insurer with consistent dividend history and good financial ratings is crucial. One review lists companies by “financial strength rating: A+ (AM Best)” for example. (PolicyAdvisor)
- Your Goals: Are you buying for legacy / estate / tax shelter? Or for pure return/cash value accumulation? Different plans suit different goals.
- Returns Are Not “Guaranteed”: While many of these plans talk about good projected returns, actual performance can vary based on the insurer’s investment performance, expenses, and dividend policy. Always check the fine print.
The Top 7 Life Insurance Plans/Types for Best Returns
Here we go through each plan (or plan-category) that stands out in 2025 Canada for “best returns”.
1. Equitable Life of Canada – “Equimax Estate Builder / Wealth Accumulator” (Participating Whole Life)
This mutual insurer (member-owned) offers participating whole-life policies with very strong cash-value growth features and attractive dividend scale rates.
- One source indicates a Dividend Scale Interest Rate (DSIR) around 6.40% for 2024 for Equitable’s participating whole-life plans. (PolicyAdvisor)
- These plans are often highlighted for “high early cash values” and are seen as ideal for younger families or for legacy/estate planning. (Canadian LIC)
Why it stands out: Among the highest DSIR in Canada, good for accumulating value + keeping full life protection.
Considerations: Premiums will be higher than term; cash value growth is gradual; you must keep the policy long-term for best effect.
2. Manulife Financial Corporation – “Par Whole Life / Par with Vitality Plus” (Participating Whole Life)
Another major player in the Canadian life-insurance market offering participating whole-life (“Par”) plans.
- According to one review: “Dividend scale interest rate: 6.35%” for Manulife participating plans. (PolicyAdvisor)
- The company also has strong digital access and features (which may reduce some overhead costs). (Canadian LIC)
Why it stands out: Strong brand, strong financials, a relatively high projected return (DSIR ~6.35%).
Considerations: As with any participating whole life plan, you need to commit long term; ensure the premium structure (10-pay, 20-pay, life-pay) suits you.
3. RBC Insurance – Participating Whole Life (“Growth Insurance / Growth Insurance Plus”)
For policyholders looking for value and dividend potential, RBC’s participating whole-life offerings are noted.
- Source: RBC “dividend scale interest rate: 6.30% effective April 1, 2025”. (PolicyAdvisor)
Why it stands out: Strong bank-backed brand, decent DSIR, accessible for many Canadians.
Considerations: As always, check the fees, policies, how the cash value builds, and what surrender charges or loans you might take.
4. Industrial Alliance Financial Group (“iA PAR” Participating Whole Life)
Another excellent option for participating whole life with strong dividend history and flexibility.
- Source: “Dividend scale interest rate: 6.35%” for iA’s participating life insurance. (PolicyAdvisor)
Why it stands out: Competitive rate, Canadian-based company, good value for accumulation + protection.
Considerations: As with others, the cost of premium vs benefit needs to be checked, especially if your budget is tight.
5. Sun Life Financial Inc. – “Sun Par Protector / Sun Par Accumulator” (Participating Whole Life)
Sun Life is a large, trusted institution in Canada and globally. For participating whole life, they offer solid plans with respectable dividend rates.
- One source: DSIR around 5.0% for Sun Life participating policies (2025 projection) under “Top Dividend-Paying Whole Life Insurance Policies” review. (Canadian LIC)
Why it stands out: Global brand, strong financial backing, good for long-term wealth/estate planning.
Considerations: DSIR slightly lower than some other firms listed above (~5% vs ~6.3–6.4%); cost may be higher for desired coverage.
6. Canada Life Assurance Company – Participating Whole Life (“Canada Life – Participating Life”)
Another strong contender with long dividend payment history and sound financial strength.
- Source: In “Top Dividend-Paying Whole Life Insurance Policies” review: “Dividend Scale Interest Rate (2025): ~5.2%” for Canada Life. (Canadian LIC)
Why it stands out: Long history, reliability, transparent dividend history, solid brand.
Considerations: DSIR is a bit lower compared to top ones (~5.2% vs ~6.4%); if your goal is maximum cash-value growth, might look at higher DSIR companies.
7. The Co‑operators Group Ltd. – Participating Whole Life and Other Permanent Life Options
While Co-operators may not always show up in every “highest rate” list, it’s noted in comparison guides for value and service.
- Comparative ranking: Co-operators listed for “best life insurance for smokers” or other niche categories in a ranking of best life-insurance companies in Canada. (policyme.com)
Why it stands out: Good service, decent value, especially for policyholders who need customization or have special needs (smokers, etc).
Considerations: The DSIR / dividend rate may not be the very highest; if maximum cash-accumulation is your goal you might prefer one of the top 5 above.
How to Choose & Maximise Your Return
Here are some actionable tips to ensure you get the best possible return from a life-insurance policy in Canada:
- Compare DSIR / Dividend History: Higher DSIR often means better projected returns. As we saw, top firms are around 6.30%-6.40%.
- Check premium payment structure: Many participating whole-life plans allow 10-pay, 20-pay, or Life-pay (pay for life). If you stop paying, the policy may convert to paid-up value and your returns will fall.
- Use the cash-value: Many whole-life plans build cash value. You can borrow against it, use it as collateral, or even access for retirement income. Don’t just treat it as dead money.
- Keep the policy long-term: The real value of participating whole life shows up when you hold it 10-20+ years. If you cancel early you may lose much of the benefit.
- Be mindful of fees/commissions: Some policies have higher hidden costs or front-loaded premiums. Ask for full disclosures.
- Match the policy to your goal: If you simply want life protection with low cost, term life may be better. If you want “best return + cash value + estate planning”, go for participating whole life.
- Review periodically: Your needs and financial situation change — review your policy every few years, track dividends, cash value, and whether you still need the death benefit level or features of the policy.
Final Thoughts
If you’re searching for “life insurance + best returns” in Canada in 2025, you’ll want participating whole-life policies with strong dividend-scale rates, reliable history, and cash-value growth potential. From our list above, firms like Equitable Life, Manulife, RBC, iA, Sun Life, Canada Life and Co-operators all provide solid options.
The most important thing is to align your policy with your goals (protection, accumulation, estate planning) and treat it as part of a broader financial plan — not just a “set-it-and-forget” product. With the right approach you can both protect your loved ones and build long-term value.
Leave a Reply