Industrial Alliance Introduces Universal Life Insurance with Adjustable Premiums Tied to Long-Term Interest Rates
On June 3, Industrial Alliance Insurance and Financial Services Inc. (TSX: IAG) launches its new universal life insurance product that will allow clients to take advantage of premium reductions should long-term interest rates go up.
An innovative new product, Trend is an advantageous alternative to the permanent life insurance products on the market today. It provides clients with the protection they need, all the while saving them money. Policyholders benefit from a guaranteed premium discount for the first 10 years of the contract, and they can save even more starting year 11 if long-term interest rates are higher at that time.
Trend is intended as a breath of fresh air for consumers. Over the past few years, guaranteed level-premium permanent life insurance products have seen several price increases given the persistently low level of long-term interest rates. The coverage currently provided by these products offers no opportunity for clients to regain ground and pay lower premiums in the future should interest rates go back up. Trend is turning things around to the benefit of the consumer.
"Interest rates are currently at an all-time low," states Clément Gignac, Senior Vice-President and Chief Economist. "But Canadians can expect them to rise once the U.S. economic recovery has firmly taken hold."
"We have designed an affordable permanent life insurance product in comparison to the level-premium permanent solutions currently on the market," adds Marie-Élaine Gaudreault, Senior Director of Marketing in Individual Insurance and Annuities. "Right from the start, clients get a rate discount that is guaranteed for 10 years. Then, in addition to this savings, policyholders can benefit from potential further savings should interest rates increase down the road."
After the first 10 years, the premium is adjusted using a formula specified in the initial contract and based on a reference index. The index value is equal to the average of long-term provincial bond yields over the previous five years.
When the Trend contract is issued, a maximum premium is also established and guaranteed to the client. This guaranteed maximum premium acts as a buffer for the insured, who will never pay more than the amount specified in the contract. Trend also offers the opportunity to take advantage of tax-sheltered savings.
A promotional video for this new product is available on YouTube: http://youtu.be/JHVcprqoMtw
About Industrial Alliance
Founded in 1892, Industrial Alliance Insurance and Financial Services Inc. is a life and health insurance company with operations in all regions of Canada as well as in the United States. The Company offers a wide range of life and health insurance products, savings and retirement plans, RRSPs, mutual and segregated funds, securities, auto and home insurance, mortgage loans and other financial products and services for both individuals and groups. The fourth largest life and health insurance company in Canada, Industrial Alliance contributes to the financial wellbeing of over three million Canadians, employs 4,300 people and has assets under management and administration of more than $87 billion. Industrial Alliance stock is listed on the Toronto Stock Exchange under the ticker symbol IAG.
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Pierre Picard, Manager, Public Relations
Office: 418-684-5000, extension 1660