What is Adjustable Whole Life Insurance?

Adjustable whole life policies are permanent policies that provide lifetime protection but do not offer guaranteed premiums.

At first glance, this may not seem like a good deal for the consumer. However, given that historically low interest rates have forced many Canadian life insurance companies to either pull permanent life insurance products from their product shelf altogether or significantly increase their premiums, many carriers have raised guaranteed permanent life insurance premiums by as much as 35 per cent.

Adjustable whole life policies split the risk of low interest rates with the consumer and the insurance company. If interest rates continue to remain low or decrease even further, premiums may adjust upwards. However, if interest rates increase, premiums will do the logical opposite and shift downward.

Given the current state of interest rates in Canada, now may be a good time to look into Adjustable Whole Life Insurance.

Update: Empire Life Introduced an adjustable Term 100 policy and Industrial Alliance introduced an Universal Life policy with a level cost of insurance with an adjustable feature.

LSM Insurance’s Take: Personally I find the influx of Adjustable Whole Life Insurance policies somewhat worrisome.  This is especially problematic for life insurance contracts that do not have a formula to measure how the premiums will be adjusted or do not have any maximum premium tables in the contract.  Without a maximum premium and without a clear formula the insurance company can increase the premium as high as they see fit.  This is not a good scenario for the Canadian consumer.  One possible option that I have communicated with several industry executives is to charge a higher premium and high cash value option within their Guaranteed Whole Life policies.  The higher cash values will help justify the increased premiums and will give the insured and incentive to cash their policy at later ages.  Which is actually what the insurance company wants in many instances.  As many of the Non Participating Whole Life policies are lapsed supported meaning that a certain percentage of policies are assumed to be cancelled when the insurance company sets the initial pricing.

For more details on Whole Life Insurance in Canada, please contact us at 1-866-899-4849 or visit our Whole Life Insurance Quote Page.

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  • Holly
    March 1, 2014 at 6:52 am

    How much is life insurance for a 45 year old. I’m in good health but travel back and forth to Iran and was recently declined

    • LSM Insurance
      March 1, 2014 at 10:30 am

      Thanks for the note Holly. We could do a preliminary inquiry on a traditional application to see if any carriers would issue coverage based on your travel.

      Another and likely more viable options would be a Simplified Issue application which does not have a travel related questions. Because you were just declined there would likely be a two year waiting period on non accidental deaths.

  • Kalem
    November 28, 2013 at 6:30 pm

    Can you add a disability policy after you have taken out your life insurance

    • LSM Insurance
      November 28, 2013 at 7:22 pm

      Hi Kalem, Yes you can add a disability policy after you have applied for life insurance there would be additional underwriting.


  • Jason
    November 14, 2013 at 11:08 am

    How do I now if my premium will incrase

    • LSM Insurance
      November 14, 2013 at 11:27 am

      The premium schedule or a note premium being adjustable should be stated within the policy summary page of your contract. You could also contact your insurance company or broker.

  • Moshe
    July 2, 2013 at 7:27 am

    Which company is the best for Whole Life. I was thinking of the same plan sister has through Canada Life

    • LSM Insurance
      July 2, 2013 at 7:52 am

      Hi Moshe,

      Depending on when your sister took out her plan, the same plan may no longer be available. The best plan really depends on your date of birth, smoking and the amount of coverage you need. We will be in touch by email shortly.

  • CB
    June 29, 2013 at 4:15 pm

    Does Empire offer an adjustable term 20 policy. I like the concept but dont want or need a term 100. i like the idea of lower premiujms

    • LSM Insurance
      June 29, 2013 at 7:02 pm

      Hi CB, Empire has a Term 20 policy, but not an adjustable Term 20 policy. Some association plans have adjustable term plans but many of those are higher priced than guaranteed term plans

  • LSM Insurance
    April 19, 2013 at 9:01 am

    Kevin, Adjustable Whole Life policies are popping up in response to the pressures created by historically low interest rates. Most of these plans have a cap on how much the premiums can increase by. Also keep in mind the plans being introduced now are being priced in an already low interest rate environment.
    If someone needs but can’t afford a guaranteed level cost Permanent plan this may be a good alternative.

  • Kevin Greenfield
    April 19, 2013 at 7:24 am

    What exactly meant by adjustable Whole Life? Does that mean my premiums can go sky high if my health changes? Doesn’t sound like a good deal to me. I would be better off with a company like Primerica that just sells Term policies atleast I know what I’m getting.