Original age conversions to participating life insurance
Original age conversion overview: Within the first 6 policy years, we’ll allow Clients with the original age conversion wording in their contracts to convert their Term policy to a participating life insurance policy with the same original issue date as the Term policy without having to provide new evidence of insurability. When they convert, the Client must pay the greater of:
- The difference between the Term insurance premiums from the date of issue and the premiums for the new participating life insurance policy, plus interest* compounded annually.
- 102% of the cash value of the converted policy, including the cash value of any dividends credited to the policy.
*The interest rate charged on the total participating life insurance premiums from the original policy date to the date the new policy is applied for will be equal to the dividend scale interest rate applicable to the converted policy in each applicable policy year.
Adding the Plus premium benefit: We’ll allow Clients to add the Plus premium benefit to the new participating life insurance policy at time of conversion without having to provide new evidence of insurability if the Term policy being converted is less than 5 years old, otherwise limited underwriting is required (same rules as regular conversions). We do not allow backdating of the Plus premium benefit; however, we may allow a lump sum payment of Plus premium at the time of conversion provided there is enough tax-exempt room. Adding the Plus premium benefit is subject to our capacity and retention rules.
Commissions: Commissions paid on the new participating life insurance policy would be the difference between the commissions already paid for the Term policy and those that are to be paid for the new participating life insurance policy.
Adding the original age conversion contract wording: The original age conversion contract wording is automatically included on Term policies issued from 2019 onwards with face amounts of $20 million or more, and on Term 10 policies with the renewal protection benefit with face amounts of $5 million or more.
The original age conversion contract wording can be manually added to Term policies with face amounts of $5 million or more on request before the policy is issued.
Splitting Joint policies
We will now allow Clients to split their Joint life policies into new single life policies at attained age and current rates without providing new evidence of insurability. The following criteria must be met:
- The request to split a Joint life plan must be received within 90 days of obtaining a signed legal separation, divorce or dissolution of business partnership.
- Splitting of Joint plans will be available for currently sold Joint First-to-Die or Joint Last-to-Die permanent life insurance products, and for currently sold Joint First-to-Die Term life insurance products. Splitting of Joint plans will not be allowed on plans sold prior to January 1, 2017.
- The new single life plans will be the same type of policy as the original Joint plan. If the same type of policy is not available, Sun Life will determine what type of plans can be issued.
- The face amount of the new single life plans can be no greater than 50% of the original Joint life base plan or a proportional split if more than 2 lives were insured on the Joint plan.
- Premiums for the new plan(s) must be received at the time of application.
- Upon splitting of the Joint plan, a full taxable disposition will occur. Any cash surrender value or fund value, less any outstanding loans or premiums, will be paid to the policy owner(s). This may result in tax implications, including increasing taxable income.
Canadian Life and Health Insurance Association (CLHIA) product disclosure requirements
You are responsible for providing clients with a copy of the SunTerm client guide
and a product illustration. This requirement complies with CLHIA product disclosure guidelines effective January 1, 2006 for new products, and January 1, 2007 for existing products.
Making a claim
You may assist clients in making a claim by calling 1 877 272 2020 to request claims forms.
Completed forms, including proof of the insured person’s death are mailed to:
Life Claims Services
Sun Life Assurance Company of Canada
227 King St. S.
PO Box 1601, Station Waterloo
Waterloo ON N2J 4C5
Payments to the plan
Clients can pay monthly using the Pre-Authorized Cheque plan (PAC) option or pay annually