Policyholder Dividends

In Canada, the opportunity to earn policyholder dividends is unique to participating life insurance policies. Participating policyholders share in the experience of the pool of participating life insurance policies through the payment of policyholder dividends.

You choose how you want your dividends to be used. The most popular dividend options are to use dividends either to buy additional permanent life insurance coverage each year or to buy a combination of term and permanent life insurance, which can make a larger amount of coverage more affordable.

Canada Life manages the investment portion of a participating policy, so it doesn’t require hands-on management by you. Assets in the participating account are managed in a diversified portfolio and are invested primarily in bonds, mortgages, equities and real estate.

Dividend scales are used to calculate dividends credited to policies. Dividends aren’t guaranteed and will fluctuate, in actual experience, from those shown in sales illustrations provided by your financial advisor. Dividends into the future will depend on future dividend scales. The dividend scale, including dividends paid under it, is affected by a number of variables such as investment returns, mortality experience, expenses (including taxes) and other relevant factors.

Dividends credited to a policy have a cash value associated with them. This cash value, once credited to the policy, is vested and can’t be reduced or used in any way without your authorization other than to pay premiums.