Several new developments in permanent life insurance

A single phrase differentiates permanent life insurance from term life insurance: lifetime security. Term products cannot offer this. 

Guillaume Fauteux, Vice President of Business Development and Marketing in Individual Insurance and Retirement-Investment at UV Insurance, underlined this quality when he launched a whole life insurance product payable until the age of 100 on November 28, 2023: "The premiums of our new whole life insurance product are guaranteed and waived at 100, ensuring peace of mind throughout life." 

"By offering lifetime security, Whole Life payable to 100 advantageously replaces our previous product, Integral, which is no longer available. It stands out with underwriting possible up to the age of 80," adds Fauteux. 

Simplified issue 

UV Insurance also offers simplified issue Whole Life payable to 100. The insurer states it has the same advantages as products with regular pricing, but without a medical exam. 

Whole Life Payable at 100 should not be confused with term 100 (T100), which is a permanent product despite its name. T100 does not offer a cash surrender value, unlike Whole Life Payable at 100 and other whole life products. 

The attraction of participating policies 

Sébastien Auclair, Director of Individual Insurance Product Development at iA Financial Group, believes that advisors must determine the nature of their client's insurance needs to help them choose the most suitable permanent life insurance product. "Is the need constant or can it fluctuate? And if it can fluctuate, will it grow or decrease?" he adds. 

How to choose between non-participating and participating whole life insurance? The client's budget plays a role in this choice, says Auclair. "Participating life insurance commands a premium that is quite high compared to the initial insurance amount, but this amount can grow exponentially." 

Better performance 

Sébastien Auclair considers participating whole life as the insurance product offering "the best return on investment." "It is currently the best product on the market for a client who wants to leave the largest possible insurance amount to their estate," says Auclair. 

He believes the tide could turn if interest rates continue to rise, making the performance of long-term bonds more attractive than that of the participating account of whole life insurance. 

However, this scenario seems distant. According to Bank of Canada statistics, average yields of Canadian government negotiable bonds over 10 years were around 3.21% on January 10, 2024, after reaching a peak of 4.07% on October 3, 2023. 

Rate war 

In comparison, iA Financial Group announced in the November 14, 2023, issue of InsuranceINTEL Weekly that it would increase the interest rate of the participation scale for its whole life to 6.25% for 2024. The current rate offered by iA is 6.00%. 

The competition is fierce. On July 1, 2023, Desjardins Financial Security increased the participation scale rate to 6.20%. On the same date, Equitable Life Insurance Company of Canada, recently renamed Equitable, raised its rate from 6.05% to 6.25% in its Equimax Estate Builder and Equimax Wealth Accumulator products, for the period up to June 30, 2024. "We were the number one seller of participating whole life insurance in the country, in terms of the number of policies," states Taylor Stavenjord, Assistant Vice President, Individual Products and Marketing, at Equitable. 

Insurers are competing in a bustling market. According to LIMRA’s Canadian Individual Life Insurance Sales Survey for the second quarter of 2023, whole life insurance sales have been growing strongly since the beginning of the year. In terms of new annualized premiums, they increased by 15% in the first half of 2023, compared to the first half of 2022. This reflects both participating and non-participating whole life insurance sales. 

Driven by interest rates 

At Canada Life, interest rates have boosted universal life insurance sales in 2023, observes Andrea Frossard, Senior Vice President, Participating Life Insurance Solutions. "We’ve recently repriced our universal life (UL) level cost of insurance product," notes Frossard. 

She explains that the high-interest rate environment allowed this adjustment. "We’d seen a decrease in our UL sales prior to the reprice. But with the reprice, we’ve seen a pickup again," reports Andrea Frossard. 

Meanwhile, Taylor Stavenjord says that a new universal life product, Equitable Generations, launched in September 2022 is bearing fruit. "The growing popularity of participating whole life is the continuation of a long history, and we see it at Equitable. But a year after the launch of Equitable Generations, we have seen the share of universal life insurance grow in our business portfolio," reports Stavenjord. 

He adds that whole life remains the flagship product of Equitable and still represents the majority of its permanent life insurance sales, "but we are now a very serious competitor in universal life insurance." 

BMO Insurance announced several changes to its universal life in 2023, including the addition of 20-year and 30-year guaranteed interest accounts.

In 2024, we will publish articles on the year-end interview with the new President and CEO of BMO Insurance, Rohit Thomas. One of them will detail the changes made by BMO to its insurance and investment products. 

A new T100? 

The launch of a Term 100 (T100) is rather rare in the industry. In the October 31, 2023 issue of InsuranceINTEL Weekly, Empire Life announced the launch of a new permanent life insurance product, called Term to 100. 

One has to go back to the January 26, 2021, edition of InsuranceINTEL Weekly to read a similar story: Specialty Life Insurance then added a T100 product by launching the second phase of its Evolution Life Insurance Series. On July 7, 2020, Humania Assurance launched its first T100 accessible without a medical exam. 

Empire Life said it offers its new T100 not only at competitive prices but also at competitive remuneration rates. The Kingston, Ontario insurer grants a first-year commission rate of 50% to advisors who sell Term to 100. Their commission increases to 55% when they use the insurer's digital insurance proposal, Fast & Full, and to 60% when the client selects the digital health questionnaire and online contract delivery.