Permanent life insurance premiums continue to increase substantially across the industry. Just this week both Sun Life and Canada Life have increased their premiums on their life insurance premiums, and they’re the almost the last in a long line of insurers raising their premiums on these products.
Some of the companies have taken even more drastic measures and simply ceased offering these products entirely. Equitable Life and RBC Insurance have both ceased offering new sales of some of their guaranteed permanent life insurance policies this year.
The continued low interest rate environment makes it difficult for insurance companies to keep these products profitable. Due to the decades-long nature of these permanent life insurance policies, the rate of return they can earn on long term investments substantially impacts the profitability. Some companies have reacted with large increases and as noted, some are just saying ‘we’ll get back in the game sometime in the future when interest rates make these products profitable again’.
If you’re thinking permanent life insurance, now’s the time to lock in. I don’t forsee premiums on these products being brought down again in the near or even mid future.