There is intense competition among insurers regarding the dividend interest rates offered on participating whole life insurance policies, according to exclusive research conducted by AssuranceINTEL for the Insurance Portal.
AssuranceINTEL, a key source of insurance product information in Canada, focused on what insurers refer to as the dividend scale interest rate. In addition to dividends, it includes other components such as investment returns, mortality gains, and expenses. The insurers review this rate annually and may choose to adjust it each year, or leave it unchanged.
The AssuranceINTEL research covers the years 2022 to 2024, and reveals notable discrepancies. Equitable Life offers the highest dividend rate in 2024, at 6.40 per cent. In comparison, Canada Life and Foresters Financial offer the lowest, both at 5.50 per cent.
Desjardins Insurance shows the most significant change in its dividend scale rate between 2022 and 2024. Over this three-year period, Desjardins' rate increased from 5.75 per cent to 6.30 per cent, a difference of just over half a percentage point (0.55 per cent). iA Financial Group posted the second-largest increase, raising its rate by half a percentage point as well.
Canada Life increased its rate by a quarter of a percentage point (0.25 per cent) between 2022 and 2024, as did Manulife, RBC Insurance, Sun Life, and Empire Life. Serenia Life raised its rate by 0.20 per cent, while Co-operators posted a smaller increase of 0.10 per cent. Foresters Financial and Assumption Life maintained their rates at the same level over the three-year period.
Across all comparison periods, dividend scale interest rates of participating whole life insurance products have remained higher than the Bank of Canada’s prime rate and the long-term average yields it observed. The Bank of Canada's long-term yield data is based on typical returns from long-term Government of Canada bonds.
Search: Jean-Alexandre Doyon / Text: Alain Thériault
