June 14, 2013 - The Equitable Life Insurance Company of Canada
announced today that its Board of Directors has approved a change
to the dividend
scale, effective July 1, 2013.
The dividend interest rate for most Equimax® Participating Whole Life
policies purchased from November 2004 to February 2012 will
decrease. Policyholders who purchased an Equimax Participating
Whole Life policy before November 2004 or after February 2012 are
not affected by this dividend scale change. Base insurance
coverage, guaranteed values, and previously credited dividends are
not affected by this change and will continue to provide
policyholders with excellent value.
"Equitable Life's Participating Account yield
has remained strong despite challenging economic times and low
interest rates," said Ronald Beettam, President and Chief Executive
Officer at Equitable Life. "The prolonged low interest rate
environment continues to put pressure on those yields, which needs
to be reflected in the dividend scale."
Even though the dividend scale is reducing,
total dividend payments to policyholders are expected to increase
due to the growing total value within our in-force block of whole
life policies. Total dividend payments to Participating Whole Life
policyholders will be approximately $11.7 million during the period
from July 1, 2013 to June 30, 2014, compared with approximately
$10.7 million the previous year.
As one of the largest mutual life insurance
companies in Canada, Equitable Life shares the distributable
earnings of its Participating Account through a credit of annual
dividends to its participating whole life policyholders. The
Company considers a number of factors when determining its annual
dividends. One consideration is the investment returns from the
Participating Account, which is managed for investment yield as
well as to cover the risk associated with paying all future
obligations of the participating block of policies. Other
considerations include death claims, policy lapses, taxes, and
other expenses associated with the sale and administration of the
participating block of policies.
An objective of each year's dividend is to maintain reasonable
equity between classes and generations of policyholders. This means
that different classes of policies may have different adjustments
to the dividends they receive. Dividends are not guaranteed and
future dividends can be higher or lower than previously
projected.
Participating whole life policyholders can contact their advisor
or Customer Service at 1.800.668.4095 to find out how this change
may impact their policy.
ABOUT EQUITABLE LIFE
Since 1920, people have been depending on Equitable Life of
Canada for financial protection. As one of the largest mutual life
insurance companies in Canada, Equitable Life is dedicated solely
to its policyholders. Everything we do is focused on providing them
with personalized service, security and wellbeing. Through
independent Advisors across Canada, we offer a wide selection of
competitive Individual Life and Health, Savings and Retirement and
Group Benefits products to meet a range of financial planning and
health needs.
www.equitable.ca
Media relations contact
Don Bisch
Director, Corporate Communications
1.800.722.6615 ext. 8017
dbisch@equitable.ca
