Manulife restricts access to some universal life insurance optionsBy Alain Thériault | April 26 2009 08:33PM
In a memo to advisors on March 19, Manulife Financial announced that it will be restricting the ability of those insured under its InnoVision yearly renewable term (YRT) product to reduce or cancel part of their coverage.
For InnoVision YRT 100 and YRT 85/20 products, insured parties will not be able to reduce or cancel a portion of their coverage until their eighth policy anniversary. All reductions prior to this date will require the insurer's approval. For the various Wealth Enhancer Plus policies, a reduction will not be possible until the fifth policy anniversary. The restriction will come into force on May 23 and will not affect policies issued before this date. Policies with a level cost of insurance option will not be affected either, unless they originated as YRT coverage.
Manulife says that it is taking this step in order to avoid increasing the cost of its InnoVision product. The product's pricing is based partly on the assumption that policyholders will retain full coverage, and pay full premiums, for a certain period of time. Recently the insurer has noticed that clients have, on average, been reducing their coverage more rapidly than anticipated.
A spokesperson from Manulife told The Insurance Journal that the insurer does not wish to comment on the decision.