May 10, 2018 -
Waterloo, May 10, 2018 – The Equitable Life Insurance Company of Canada’s Board of Directors has approved a change to the current dividend scale for the period July 1, 2018 to June 30, 2019. There will be a reduction in the dividend scale interest rate from 6.5% to 6.35%.
The dividend scale is used to determine the dividend payment. Total dividend payments to policyholders are expected to increase due to the growing value of our whole life policies. Total dividend payments to policyholders will be approximately $27.6 million compared with $22.7 million in 2017/2018.
As a mutual life insurance company, Equitable Life® shares the earnings from its participating account through a credit of annual dividends to its participating whole life policyholders. 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. These factors are considered when calculating the annual dividend payment.
The dividend scale and dividend payments are not guaranteed. They are sensitive to all of the factors that affect the participating account, especially changes in investment returns. The participating account investments focus on long-term stability and growth. However, if low interest rates continue, investment returns in the participating account will be lower than what is included in the current dividend scale.
Equitable Life continues to monitor the impact of investment returns on the participating account and may need to make changes to the dividend scale in the future. As a result, future dividends can be lower than previously projected.
About Equitable Life of Canada
Canadians have turned to Equitable Life since 1920 to protect what matters most. We work with independent advisors across Canada to offer individual insurance, savings and retirement and group benefits solutions to meet your needs. But we’re not your typical financial services company. We have the knowledge, experience and ability to find solutions that work for you. We’re friendly, caring and interested in helping. And we’re owned by our participating policyholders, not shareholders, so we can focus on your interests and providing you with personalized service, security and wellbeing.
Director, Corporate Communications
The Equitable Life Insurance Company of Canada