May 28, 2019 -
May 28, 2019 – The Equitable Life Insurance Company of Canada’s Board of Directors has approved a change to the dividend scale for the period July 1, 2019 to June 30, 2020.
We use the dividend scale to determine the dividend payment. Dividends are sensitive to all the factors that affect the participating account, but especially changes in investment returns.
- The dividend scale interest rate will change to 6.2% (from 6.35%) as the sustained low interest rate environment has continued to put downward pressure on the experience in the participating account.
- The expense factors have been improved due to reduced operating costs.
- Other factors used to calculate the dividend scale have not changed.
Total dividend payments to policyholders from July 1, 2019 to June 30, 2020 are expected to increase to approximately $38.4 million compared to $29.8 million for the same period in 2018/2019. Equimax® participating whole life continues to deliver excellent value by providing lifetime protection and an opportunity for tax-advantaged growth.
As a mutual life insurance company, Equitable Life® gives its participating whole life policyholders the opportunity to share the earnings from its participating account. The participating account is mainly impacted by returns earned on investments and by death benefits, but also other factors such as policy loans, terminated policies, taxes and expenses. Every year, the dividend scale is reviewed to ensure that it is set at an appropriate level. If a dividend is declared, it is credited to the policy as a dividend payment. If low interest rates continue, investment returns in the participating account will also be lower. We continue to monitor the impact of investment returns and may need to make further changes to the dividend scale in the future. The dividend scale and dividend payments are not guaranteed.
® denotes a registered trademark of The Equitable Life Insurance Company of Canada.