Manulife is discontinuing four individual, non-cancellable disability insurance products as of September 30.
The insurance company has announced that it’s stopping the sale of Proguard, Venture, ExpenseComp and Buy-Sell Plus.
“We’re always looking for ways to meet the evolving needs of our customers, advisors and plan sponsors,” Manulife said. “To do this, we’re constantly evaluating our organization to determine where we can gain efficiencies, what work we can stop doing, and how we can prioritize the products that matter most to Canadians.”
The pending removal of the four products leaves RBC Insurance and Canada Life as the last remaining providers of non-cancellable disability insurance products in Canada, said Lawrence Geller, president of Campbellville, Ont.-based L.I. Geller Insurance Agencies Ltd.
Geller said unlike permanent insurance, these products are both difficult to sell and difficult to maintain from a reserves perspective.
“These products are a little bit more complicated [to sell] and require more service. Generally, it is not the only product you sell to the client. If a claim isn’t paid, the client blames both the agent and the company and if they have other business with the company that business may be in jeopardy,” said Geller.
He said most of the claims pay out anywhere from $4,000-$20,000 a month, requiring sizeable reserves to maintain the products and the claims.
Another difficulty may be that it is not a product that can be sold online, suggested Geller.
Proguard was put together as an income protection plan for small business owners and employees to replace their income in the case of disability, get an automatic three per cent increase every year to their policy amount and the option to exchange that policy for a Manulife long-term care insurance policy.
The Proguard Venture series provided an automatic five per cent a year to the policy amount with financial flexibility if there was a severe disability. It also provided optional add-ons, including receiving some of the premiums back every eight years if the person made few or no claims.
ExpenseComp is advertised as reimbursing a person’s share of monthly business expenses, like salaries, rent and utilities because of a disability.
Buy-Sell Plus is a kind of insurance that will help protect a business to finance the buyout of a disabled partner. The plan was said to be suitable for businesses with two to five owners who control at least 10 per cent of the business and work there full time.
