Manulife streamlines universal life product

Toronto-based Manulife Financial Corp. has streamlined its universal life product and lowered the rates of various term products.

Alex Lucas, head of insurance at Manulife Canada, said the company is expanding its universal life (UL) product shelf and closing some of its other products “to streamline and simplify our offer for customers and advisors.”

Manulife is adding a minimum interest rate guarantee of 1% to its Performax Gold Investment Fund account and making the account more accessible. Advisors will be able to invest their clients in the Performax fund and other investment accounts in the same universal life policy, the firm said Monday.

The universal life product provides single and joint last-to-die coverage and Manulife has lowered the minimum face amount for UL coverage to $25,000. Death benefit types are divided into two cost structures: level (face plus and percentage of account value on each death) and yearly renewable term (YRT, with face plus and level death benefit), the firm said.

With a YRT structure, insurance rates will increase over time, while rates remain flat with a level structure. The universal life product’s underwriting classes include smokers and non-smokers.

Manulife is also offering rate enhancements for clients’ UL managed accounts. For bond accounts, client will earn an annual rate of return that’s 0.25% higher than the underlying retail mutual fund, the firm said; for equity and balanced accounts, the rate enhancement is 1%.

Lucas said Manulife was looking to make its “core product and client solutions streamlined, simpler, easier for the advisor and customer to find the right solution, and easier for us to service and support with a more focused product shelf.”

“The future of insurance is really about making it easier to buy and more enjoyable to own,” he added.

Manulife is also lowering its term rates for T-10 (10 years) and T-20 (20 years) family term, business term and family term with Vitality insurance by up to 13%.

“We’re ensuring we’re competitive from a rate perspective,” Lucas said. “If you talk about most Canadians and their basic protection needs and need for insurance, term insurance is the best solution for that.”

On the purchase side, Manulife is improving its underwriting requirements, allowing clients 18 to 50 to buy up to $5 million in life insurance without fluid testing, Lucas said.

The company is also introducing new digital tools to help advisors offer clients a more seamless purchase experience.

A new e-application combines illustrations and the application into one platform, with data from the illustration pre-populating fields in the e-application. This allows Manulife advisors to carry forward basic client information, such as tombstone benefits, product options that are selected and the amount of insurance being applied for. The e-application will save advisors time as they won’t have to do as much double-entry from the illustration tool to the e-application, Lucas said.

The illustration feature for advisors displays items such as the type of insurance policy and amount being purchased by a client, as well as the policy writers. The tool can produce rate tables and reports for advisors. Advisors can also view all the premiums and projected values of policies.

Products that are being closed in place of Manulife’s revamped universal life product are a security universal life product and portions of the firm’s InnoVision universal life product shelf, Lucas said.

Reducing the universal life options with this refreshed product makes it easier to use, he said.

“It’s just less choice,” he said, making it easier for advisors and clients to navigate while offering “more certainty on the outcomes.”