Sun life recently announced that they are lowering their dividend scale for 2012-2013 (announcement). Note that this is refererring to their dividends within their participating (typically whole life) insurance policies and has nothing to do with their stock dividends.
If you are a Sun Life policyholder (again, this does not affect Sun Life stocks directly) these dividends can drive quite a few features in your policy. Dividends can affect your cash value, your amount of insurance and when/if your policy becomes paid up.
When these participating polices are sold to consumers, a projection is assumed for dividends over the life of the policy. This projection that is being made is not normally overtly obvious to consumers. A decrease in dividends being paid that differs from what was assumed originally will affect your policy’s performance, to your detriment.
If you have a Sun Life policy, now would be a good time to call head office or your agent and ask for an illustration using the ‘current’ dividend scale to project your future values in your policy. Better to find out now if you need to plan for contingencies than to find out in 10 years time when you’re 10 years older.
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