Changes effective Nov. 26, 2012
Today Canada Life announced some changes to their CI product offering and a subsequent software update to follow toward the end of November. It’s our goal to ensure that you have updated information on the upcoming changes in the industry so that you are equipped to advise your clients accordingly. The proposed Canada Life CI changes are more in regards to “rates” and not so much pertaining to key products being removed from the shelf or modified in a significant way. However, any changes are important to note. The details of Canada Life’s CI announcement are outlined below along with the transition rules. Please read below and let me know if you have any questions or concerns…
What’s changing:
Critical illness insurance rates are increasing
Removing critical illness insurance premier value premium reduction and dual solutions premium reduction for critical illness and disability insurance
Why the change in rates:
The continuing low interest rate environment has caused Canadian insurers to re-evaluate the pricing of their products with long-term guarantees. As a result, Canada Life will increase critical illness insurance rates. This is in line with a number of competitors who recently announced rate increases.
Rate change overview
For the most part, you’ll see changes to all critical illness insurance plans.
While most base plans will increase, 10 year renewable term to 75, convertible to 65 (T10) will only see minor increases and decreases. Generally there will be larger increases at younger ages and for females. Adult and child plans with return-of-premium at withdrawal or expiry riders will see larger increases. Child base rates will not change.
Note: All percentages are an estimate only and represent an average of age 30-50 rates and are based on standard risk $100,000, non-smoker plans.
Base plan:
10-year renewable term to 75, convertible to 65 (T10) – minor increases and decreases
Permanent level premium, paid up at 100 (T100) – average increase of 13.5 per cent
Level premium term to 75 (T75) – average increase of 5.5 per cent
Permanent level premium, paid-up in 15 years (Limited pay 15) – average increase of 7 per cent
Plans with return-of-premium at withdrawal (year 15, year 20 and age 65) and return-of-premium at death rider
T100, T75 and limited pay 15– average increase of 22 per cent
T10 – average increase of 30 per cent
Child critical illness insurance
Base plan will not see any changes
Plans with return-of-premium at expiry will see an average increase of 30 per cent
Removing critical illness insurance premier value premium reduction and dual solutions premium reduction for critical illness and disability insurance
We’re removing the dual solutions premium reduction and the premier value premium reduction as a way to lessen the increase in rates. In addition, few competitors offer premium reductions.
Transition rules for critical illness insurance applications
New rates in the illustration software will be in effect Nov. 26, 2012.
There will be no exceptions to the rules stated below, including extensions to the final placement date.
We are unable to accept applications sent by fax or email.
All requests for product changes or increases in coverage during underwriting will be at new rates.
All requests for reissues will be at new rates.
Placed means delivery requirements have been received in head office.
| Applications received in Canada Life’s head office fromOct. 24, 2012 to Nov. 26, 2012 at 5pm EST | To be eligible for old rates, all requirements (including evidence) must be received in Head Office on or before March 1, 2013.All policies must be placed no later than 30 days after issue. |
| Applications pending in Canada Life’s head office on or beforeOct. 23, 2012 | To be eligible for old rates, all requirements (including evidence) must be received in Head Office by the earlier of six months after the application signed date or March 1, 2013.All policies must be placed no later than 30 days after issue. |
| Request for changes:Allowed at old rates: Not allowed at old rates: | Decreases will be allowed at old rates.Any re-opening of an application previously closed, declined or postponed will be at new rates. Any other changes requested (during or after underwriting), such as requests to change current dating or adding benefits, will be at new rates. Any request for increases will be at new rates. |
Canada Life Concourse™ software updates
Rate changes are effective Nov. 26, 2012. Details on software updates will follow.
Marketing materials
Please note that some marketing materials can’t be updated for Nov. 26 and will be temporarily removed from RepNet until they can be updated and re-posted.
by: Jonathan Mullett, Inside Sales Coordinator
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