The whole life market for high-net-value clients seeking income or business financing solutions is growing.
RBC Insurance has just announced the imminent launch of a participating whole life insurance policy aimed at this niche market. The news appeared in the October 19, 2021 edition of InsuranceINTEL Weekly, published by The Insurance Journal Publishing Group.
The new participating whole life insurance product will be called RBC Growth Insurance Plus, RBC says, adding that this product complements its whole life offering.
“Available this November via eApp, we’ll have two participating life insurance products, to meet your client’s needs.” The first product is RBC Growth Insurance, a wealth growth product that was listed on the InsuranceINTEL comparison site in July 2021.
Cash value after one year
In InsuranceINTEL Weekly, RBC Insurance highlights two of the new product’s features: Access to the guaranteed cash value at the end of the first policy year, and a new dividend option.
iA Financial Group recently launched a product with identical features. The insurer has added the iA PAR Wealth product to its iA Participating Life Insurance (iA PAR) line. “This new version is intended for affluent clients and corporations seeking high cash values from the first years of the contract,” iA said in its Oct. 19 announcement.
iA PAR Wealth completes the line that already includes iA PAR Estate, launched in June 2020. PAR Estate focused on maximizing the value of clients’ estate.
Neither of the insurers' estate-based policies (iA PAR Wealth and RBC Growth Insurance) generates cash value until the fifth anniversary of the policy, according to the information recorded on InsuranceINTEL.
Immediate financing plan
IA says its new product consolidates its offer “in a highly competitive market.” It also allows the deployment of high performance financial strategies for asset transfers, liquidity management and estate optimization.
These products that let investors quickly access the cash value are tailored to immediate financing arrangements. In these niche plans, a bank allows the value of a permanent life insurance policy to be used to fund a development project or purchase investments, among other things. The typical client must be comfortable with leveraged investment strategies and long-term planning. At death, the insurance proceeds are used to pay off the loan balance.
Major insurers such as Sun Life, Canada Life and Manulife have been offering a product suited to this approach for some time. BMO Insurance got on boardin June 2020.
VIP Program
Expertise is crucial in this market. In line with its launch, iA says it has enhanced its service offer with the Large Case Solutions program. This program provides expert support to serve high net value clients who require “more complex financial strategies.”
“Advisors can also count on our VIP Pricing Program, which provides quick, personalized service in order to facilitate underwriting. Moreover, we have eased our rules in order to be able to recognize foreign assets, such as investments and bank accounts, when determining the face amount,” the insurer adds.
