Whole Life

Interest Sensitive Life

Original line of business: Zurich

Updated on: Jan 9, 2019

The Interest Sensitive Life product is a whole life policy with an additional account. The additional account provides a pre-funding feature, with the goal that the additional account would be sufficient to pay future premiums for the basic coverage on the policy.

Product administration guide: N/A

Sample contract: N/A

Dividend options: N/A

Bonus: N/A

Dividend options

There is no dividend option as the dividends are reflected in the premiums payable



Premium paying period 

  • Flexible premiums (from a minimum to a maximum level)
  • Minimum premium level is guaranteed for the first 10 years
  • At the 10th anniversary and each subsequent 10th anniversary, a new premium or face amount will be determined based on the current pricing assumptions
  • Maximum premiums are based on the maximum allowed to keep the policy tax exempt
  • If a premium remains unpaid at the end of the grace period and provided there is sufficient account value in the additional account, an amount equal to the unpaid premium will be withdrawn to pay the premium 

Policy fees

  • Guaranteed expense factor of $50.00 per year
  • There is a $0.40 fee for polices on PAC

Deposit load


Non forfeiture option: Yes

Loans: Yes

Withdrawals: Yes

Non-forfeiture option

If the minimum premium remains unpaid at the end of the grace period, and provided there is sufficient additional account value, the company will transfer an amount equal to the unpaid premium from the additional account. Once the additional account value is depleted, the overdue premium will be paid by an automatic premium loan, provided there is sufficent basic policy cash value (the basic coverage)


Loans are available


  • While the contract does not allow withdrawal of funds, from the additional account, the company, at their sole discretion, may allow this
  • Withdrawals are currently available only if there are funds in the additional account. There are no fees or surrender charges
  • The face amount will not decrease
  • The client can request to take all or part of the funds in the additional account as a withdrawal


Cash value 

  • This policy has guaranteed cash values
  • These are based on a minimum of 5% interest


Reduced paid up


Premium offset/holiday: Yes

Premium offset/holiday

Premium offset / Vanishing premium option (VPO): 

  • Premium offset (also called Vanishing Premium Option or VPO) automatically begins, once the value of the additional account is sufficent to fund future premiums for life (based on the current basic coverage's annual premium, which is subject to change every 10 years)
  • Once the account attains the VPO value, the system will suspend billing and a letter will be mailed to client to advise that payments are no longer needed. The client does not have the choice to continue with base premium payments
  • Riders are not included in the VPO calculation or process
  • Once the policy is on VPO, there could be a time when the customer will need to begin paying premiums again (e.g. reduction of interest rates, annual premium increase, etc.)
  • Clients' can make additional deposits while on VPO 
  • Clients' can take a premium holiday, by requesting a forced VPO to take place. Once the funds in the additional account are depleted, they would then need to resume payments

When a client is making extra deposits after VPO has started, they must make the payment by cheque or online as we cannot PAC for the additional deposits

Death benefit

Sum insured plus additional account value, less  loan balance, less outstanding premiums

Reinstatement period

2 years