Universal Life

Performance Plan RS97

Original line of business: Maritime Life

Updated on: Dec 20, 2018

Product snapshot

Performance Plan is a universal life insurance plan which provides flexibility of premiums, coverage level and investment options. The cost of insurance structure is Yearly Renewable Term (YRT) which may provide maximum cash accumulation in the early years. It should be noted all premiums are deposited to the general account, deposit allocation would need to be an investment selection within the general account options. Those investment options are TSE 300 option, S & P 500 option, Japanese Equity option, International Equity option, Canadian Bond option and Managed option.

Basic product information

Dividend options: Yes

Bonus: N/A 

Dividend options

Interest bonus:  

  • An interest rate bonus is available beginning in the 11th policy year
  • Starting in year 11, the investment return applicable to the general account and each new guaranteed investment account deposit or reinvestment will be increased by the lesser of: 
    • 1%; and 15% of the most recently declared income fund rate 

Bonus

N/A 

Premium paying period

Options: 

Scheduled premium 

  • The initial scheduled premium is the premium level which will be billed to the policy owner
  • It is any amount between the minimum and maximum premium levels determined for the client based on their age and smoker status
  • In the first two policy years, the scheduled premium may not be decreased below the minimum premium level
  • After the first two policy years, the premium may be skipped entirely, or reduced to any amount subject to the minimum requirement of $20 

Target premium 

The target premium represents a level of premium where the policy will likely reach "crossover" and will not require premiums for life  

Flexible premiums 

  • Additional flexible premiums can be made subject to limits designed to retain the tax-exempt status of the policy
  • The minimum flexible premium is the greater of:
    • $20 monthly premium, and
    • The shortfall, if any, between the sum of the general account and the t-bill account and the sum of the deductions to be made from the general account up to the next processing date
  • These premiums are treated as premiums more than the target premium 

Policy fees

$50.00; $25.00 for additional policies

Deposit load

An applicable premium tax based on province will be charged. The charges may be changed if provincial tax rates change

Values, loans & withdrawals

Non forfeiture option: Yes

Loans: Yes

Withdrawals: Yes

Non-forfeiture option

Lapse processing: 

The policy will terminate without value if either of these two conditions are met:   

  • After a scheduled premium payment is missed and a grace period of thirty days expires, the cash value becomes less than zero, or
  • At any time, the working capital is less than zero  

Please note all riders will fall off of the policy if the policy goes on extended, unless immediate payment arrangements are made. The 87 and 91 contracts state the client may resume payments subject to evidence of insurability should they meet certain criteria

Loans

Loans are available to a maximum of the income option reduced by one year’s interest

Withdrawals

  • There is no partial withdrawal fee. Market value adjustments or a possible administration charge may occur if the face amount is reduced in order to maintain coverage. The minimum withdrawal amount is $100.00
  • Please note that if the death benefit is level and the client requests to withdraw funds, the face amount of the policy will be reduced by the withdrawal amount. A letter is sent to the policy owner with the cheque explaining that if they do not want the face amount decreased, the cheque must be returned uncashed

Cash value

Working capital 

  • A policy's working capital is the sum of all investments in the general account, t-bill account, and fixed interest options 

Cash value 

  • The cash value is equal to the sum of the value of all investment accounts (working capital) less any applicable market fund adjustments, surrender charges, and any outstanding loan

Reduced paid up

N/A

Riders & benefits

Premium offset/holiday: Yes

Premium offset/holiday

If the working capital is sufficient to support the coverage for life at the assumed investment rates, an inforce illustration showing no further deposits can be ordered to confirm if there will be enough working capital to support for life

Death benefit

  • Level coverage
  • Coverage plus
  • Indexed option

Reinstatement period

If this policy has lapsed, the basic coverage may be reinstated within two years of the date of the last premium payment upon written application to the company and evidence of insurability will be required

Convertible

The base coverage is already a permanent product and is not convertible, only a term rider could if it has not passed the conversion expiry date