On July 23, Assumption Life stopped offering its Odyssey Universal Life product, as well as its traditional Whole Life and Whole Life Junior, T-10 term and Guaranteed Economic Life products.
Low long-term interest rates and stock market uncertainty are not the only reasons behind Assumption Life's decision. The T-10 insurance is actually a short-term product, and is therefore little affected by these conditions.
Assumption Life suggests that the discontinued products no longer fit its business model, which is offering simplified insurance products on-line. In fact, these four products were not part of the electronic platform the insurer developed in 2003.
However, Assumption Life admits that low rates played a fundamental role in its decision. "We prefer to invest and channel our resources into our niche, quick-issue products, rather than modify products that will drive up the cost of premiums for clients and turn away our brokers”, says Jacques Pinet, vice-president of business development at Assumption Life.
The insurer also intends to modify several of its on-line products and to build in the possibility of accepting electronic signatures sometime this autumn.
Out of Assumption Life's total sales, universal life only amounted for 7% of sales in terms of premiums placed, while whole life and T-10 came to 2%, and the guaranteed economic life product counted for approximately 1%.
