May 2, 2018 07:00
Stéphane Beaumier, Saundra Roll, and Guy Couture
Sun Life financial and Great-West say they are firmly committed to the market to whole life insurance with participation. This product still has advantages, say these companies
«We sell a lot of insurance whole life, universal life, and temporary, has revealed Stéphane Beaumier, regional vice-president, network career Sun Life Financial. The universal life has seen a decline in recent years. Now, we sell them a little more. We sell less than whole life insurance in participating. «Sun Life may, however, rely on the success of its product life-whole payable in 10 years or 20 years and without participation in order to maintain the pace of sales.
Saundra Roll, assistant vice-president, support, products and business of a large size, insurance solutions, individual client, Great-West acknowledges that the scales of dividends are down, but does not believe that customers turn to as much of the whole life with participation. «Our account of participation in a portfolio invested 80 % in fixed-income assets and 20 % in shares. In Canada, we are in an environment of interest rates declining over the past 10 years. This affects the performance of the assets in the participating account. It follows that the interest rate on the scale of dividends, or the component of the performance of this scale, declines him too, » she says.
Ms. Roll did think, however, that customers will spend the whole life without participation. «When you look at the internal rate of return of the products entire life with participation, you can see that it can be less than what it was five or ten years. It is still very good compared to other investments fixed income, she believes. In addition, the entire life with participation refund of earnings from mortality and expenses through dividends. The whole of life without participation does not refund that the gains made by the component of investment. «
Another point in favor of the whole life with participation, writes Mrs. Roll : the interest rate on the scale of dividends represents a point in time of the performance of the assets held in the participating account. «It will vary upward and downward with time. It will differ, regardless of the year between the companies, according to their investment strategies. The interest rate on the scale of dividends is not what your police report, or what it pays currently. «
The illustrations of the fonts using this yield in one year and the plan for the duration of the police, » she warns. «This is not an accurate reflection of the gains that will your police. The purpose of the illustration, in addition to give an example, is to show how your policy will behave under different assumptions. It became too easy to focus on this figure and use it to compare products, » said Ms. Roll.
Manulife will launch its product
Manulife will be joining the ranks of the followers of whole life with participation. «Towards the end of the 1st half of 2018, we will introduce such a product,» revealed Guy Couture, vice-president of sales, personal insurance, Quebec. «We hadn’t since 2008. We decided to go there. Good volumes of sale are in whole life. We want to enjoy it «, he adds.
The insurer currently offers a whole life non-participatory, which resembles a participating product, recalls Mr. Couture. «Our Performax Gold, and his fund Gold offer the same constitution that a participation fund. The performance is robust. The new product will give an additional option to the client in the search for solutions to estate planning. «