In January, I had the privilege of being invited to the Manulife Elite Forum in Austin, Texas. A small cadre of select financial advisers attended the meeting. Over 3 days we heard from the CFO, CEO, Head Pricing Actuary and Senior Investment Officers plus Legal, Tax and Underwriting department heads.

These leaders have access to big data, and their insights are pointing to higher costs for personal life insurance.  Here is what that data means to you:

1.   Life Insurance Companies are regulated by the Department of Finance, specifically The Office of the Superintendent of Financial Institutions where capital reserve requirements have been dramatically changed. The industry has been given a whole new set of rules as to the amount and exact type of reserves that must be kept.

What this means to you

The industry will have to amass greater reserves, costing the consumer more money; in short, your costs WILL go up!

2. Actuaries make pricing assumptions on the cost of Life Insurance, which includes many variables. Two of the most important are death rates per thousand and interest rates on bonds.

While mortality has improved slightly tilted in the actuaries’ favor, they have been sideswiped by low interest rates and the gradual decline of their bond portfolios. Current government 30-year bonds range around 2%, which is about 4% less than the actuaries originally assumed. This widening gap leaves the pricing actuaries with no other room to move.

What this means to you

An increase in new insurance costs and, dramatically, higher renewal rates.

3. The tax department as of January 1st, 2017 has imposed a substantially higher transaction and investment tax internally on insurance policies.

What this means to you

 These new taxes will flow through to you in the form of higher premiums.

4. The dreaded Bill S-201*

This piece of odious legislation will preclude the Life Insurance industry from asking applicants any questions about genetic testing.  Let's be clear.  This is not the industry doing genetic testing, but asking if you have ever had any genetic testing.  This barrier of access to information will work against the Life Insurance industry.  It creates anti-selection.  If the client goes out and has a genetic test and finds out he/she has a mutant DNA gene and immediately applies for a boxcar full of insurance, this would create a very uneven playing field against insurers.

What this means to you

This piece of legislation alone will force the industry to dramatically increase pricing and remove guarantees. I would remind you, that Canada is the only country on the planet that issues guaranteed renewal rates for such plans as Critical Illness. I foresee us going the way of the United States and Australia where there never was a guaranteed rate product.

Your Action Plan

If you have any thoughts of shoring up or adding to your existing Insurance Portfolio, now would be the time.  Additionally, if there is any reason for you to consider long-term or permanent insurance, grab it now while you can.

Let's Talk!

I find it interesting that so many events have conspired against the buyer at the same time. Let’s schedule a 30-minute call and talk about what your next steps could look like. I can be reached at or (604)874-4429.

* Footnote: Either house in Canada’s Parliamentary system, Senate or House of Commons, may be the proposer of a bill. It will be denoted with the letter C or S, depending where the bill originates.