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2012 Sun Life Dividend Scale

Posted in Software, Sun Life  ·    ·  (permalink)

At the December board meeting, the Board of Directors of Sun Life Assurance Company of Canada (‘Sun Life”) approved a recommendation to decrease the dividend scale for most participating policies issued by Sun Life Financial.

This dividend scale will be in effect from April.01, 2012 to March 31, 2013.

Inforce Business

  • The 2012 dividend scale interest rate* will decrease by 25 basis points (bps), resulting in a new dividend scale interest rate of 7.15%
  • The dividend on deposit rate will be 3.75%, except for RRSP policies and Bermuda policies with a variable loan clause.

New Business

Sun Par Protector and Sun Par Accumulator continue to be very competitive product offerings, providing clients with lifetime protection.  In many cases, our competitive positioning has improved despite this modest dividend scale decrease as several other carriers have announced their own dividend scale reductions.

  • The 2012 dividend scale interest rate* will decrease by 25 bps, resulting in a new dividend interest rate of 7.15%
  • On average Sun Par Protector and Sun Par Accumulator will see a decrease of approximately 3% in their annual dividend with the 2012 dividend scale.
  • The dividend on deposit rate will decrease by 25 bps to a rate of 3.75%

New software reflecting these changes will be available January 27, 2012.

*The dividend scale interest rate is nor the portfolio yield of the Sun Life Participating account.  The rate is based on the portfolio yield and is used in calculating the dividend scale.  The dividend scale interest rate is only one component of many that are used to calculate the dividend scale that is applicable to a specific policy.  Other factors include mortality, expenses and lapse experience.

Sun LIfe: New Universal Life Rates Effective January 7th, 2012

Posted in Sun Life  ·    ·  (permalink)

Effective January 7, 2012 Sun Life Universal Life Level COI rates are increasing to align with the movements in the Canadian market.

Transition rules

The new rates are effective January 7, 2012, at 12:00 a.m. EST. No exceptions will be made. The old rates will no longer apply starting at this time.

Applications that Sun Life Financial’s New Business area receives before 11:59 p.m. EST on January 6, 2012, will be eligible for old rates if:

  • the policy or coverage is issued on or before April 6, 2012, and
  • the policy is placed within 42 days of issue.

Old rates will apply even if the illustration and application use the new rates.

 

Product Profile – Sun Life Child Critical Illness

Posted in Product Profile, Sun Life  ·    ·  (permalink)

  

Underwriting CI applications can be a challenge.  What better way to get a policy issued than applying for it when your child is still young and healthy.  Sun Life will now issue a CI policy on children as young as 30 days.

  Coverage:  From the date of issue the child plan includes the standard 24 covered group one conditions, and the usual partial benefits for Ductal Carcinoma in situ of the breast, Stage A Prostrate Cancer, Stage 1A Malignant Melanoma and Coronary Angioplasty (15% to a maximum of $50,000). The policy will also cover 2 additional group one conditions starting at age 18 with no additional charge; Acquired Brain Injury and Loss of Independent Existence.

  The childhood diseases which are covered until the child’s 24th birthday are Type 1 Diabetes, Congenital Heart Disease, Cerebral Palsy, Cystic Fibrosis and Muscular Dystrophy.

 The riders available are Return of Premium on Death (ROPD) and Return of Premium on Cancellation or Expiry (ROPC/E).  The return of premium on death is straight forward, but it is the return of premium on cancellation or expiry that makes this an interesting policy.

 Assuming there is no claim for a group one condition, the ROPC/E will automatically refund 75% of the returnable premium on the later of the 15th policy anniversary or the policy anniversary following the insured’s 25th birthday.  The client can continue to maintain the policy following the refund, including the ROPC/E rider.

 Should the client subsequently cancel the policy at any time on or after the later of the 30th policy anniversary or the policy anniversary following the insured’s 40th birthday 100% of the returnable premium will be paid to the policy owner.  The returnable premium is defined as all premiums paid minus any automatic return of premium amount paid.

 Example:  If your client purchased a $250,000 T75 policy on their son at age one and included ROPD and ROPC/E the annual premium would be $1,537.50.  The automatic ROP at the anniversary following the child’s 25th birthday would be $27,675, just in time to pay off his student loans (to the government or his parents!).

 If the client decided to surrender the policy at any time after age 40, 100% of paid premiums, minus the automatically refunded amount, will be returned.  If the policy was held to expiry, the refund at expiry would be $86,100.