Canada Life Dividend Scale Announcement for Policy holders in 2011

Canada Life

Canada Life has just announced that the dividend scale interest rate for 2011 will continue to be 7.36 per cent. The dividend scale interest rate is used to calculate the investment component of participating policyowner dividends. Participating policyowner dividends are estimated to be valued at $125 million in 2011, compared with the estimated distribution of $116 million in 2010.  

I’m sure you’re wondering how this is possible given that fixed-income investment returns have continued to remain low.

Well, as part of the ongoing management of the dividend scale, the investment experience was reviewed for the 12-month period ending June 30, 2010. There continues to be downward pressure on the dividend scale interest rate due primarily to the low interest rate environment. There are a number of factors that have helped to offset the lower fixed-income returns, including the following:

1. The stabilizing effect of the fixed-income investment strategy, which has approximately 5% of assets invested at then-current new money rates each year.
2. Asset quality –100% of bonds held are investment grade. (BBB or higher, as of June 30, 2010)
3. Residential and commercial mortgage arrears (from over 90 days) of 0.02% of total mortgage holdings are below the 0.31% average for the industry. (as of June 30, 2010)
4. Actual market-value experience of common stocks performed approximately as assumed. (assumption of 6%, for the one-year period ending June 30, 2010)
5. For the Canada Life open block, improvement in mortality and other factors as compared with those assumed in the current dividend scale.
6. Policy loans positively contributed to the dividend scale interest-rate.

For info on Canada Life insurance products or to find one that’s right for you, please call us at 1-866-899-4849 or visit our Term Insurance Quote Page

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  • LSM Insurance
    July 13, 2012 at 8:12 am

    Canada Life is a subsidiary of The Great-West Life Assurance Company which is a stock company.

  • Nevill
    July 12, 2012 at 11:10 pm

    Is Canada Life a mutual company?