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. | Questions and answers about the dividend scale change
ABOUT THE DIVIDEND SCALE
1. What change did Manulife make to the dividend scale?
Effective September 1, 2008, the dividend scale will decrease for the following participating policies:
Aetna traditional
Maritime Life traditional
Confederation Life traditional
Gerling Global traditional
2. Why did the dividend scale decrease?
The premiums paid for participating policies are put into a separate account called the participating account. You put your trust in us to make sure there is always enough money in this account to pay future death benefits, cash values and dividends.
As you know, dividends and the dividend scale are not guaranteed. They are sensitive to changes in any of the factors that affect the participating account such as investment returns, operating expenses and payment of death benefits.
A number of the factors, but in particular investment returns, have played a role in our decision to reduce the dividend scale. This reduction will help maintain the integrity of the participating account well into the future.
3. How long do you expect the dividend scale to remain at the new level?
The dividend scale is effective for policies with anniversaries after September 1, 2008. Each year, the dividend scale is reviewed and a recommendation made to Manulife’s Board of Directors. Dividends are dependent on many factors. All of the factors, and in particular investment returns, will change over time. It’s impossible to predict the extent of the change and ultimate effect on dividends.
4. Why are participating policy dividends decreasing when Manulife's profits continue to be strong?
The dividend scale is affected by things such as claims paid on participating policies and the investment performance of the participating fund. The participating account is managed separately such that dividend scales are not affected by profit or loss experienced by Manulife as a company.
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HOW THE DIVIDEND SCALE CHANGE AFFECTS YOUR POLICY
5. Will the dividend scale reduction affect my policy?
Yes. When you purchased your policy, you may have been shown that the amount of cash value, and perhaps the death benefit, of your policy depends on the level of dividends your policy receives. If dividends decrease, the future values of your policy will also decrease.
6. What will happen to my death benefit?
There is no change to your basic death benefit. However, if a portion of your death benefit of your policy is based on dividends, that portion may be impacted by the dividend scale reduction.
7. Are my guaranteed values affected?
If your policy has contractually guaranteed values, such as a guaranteed death benefit or guaranteed cash values, these values do not change and are not affected by the dividend scale change.
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WHERE CAN I GET MORE INFORMATION?
8. If you have questions that weren’t answered with any of the information posted on this website, please contact your advisor or call us directly at one of the numbers below:
Outside Quebec: 1-888-626-8543 – Monday to Friday from 8 am to 8 pm ET.
In Quebec: 1-888-626-8843 – Monday to Friday from 8:30 am to 5 pm ET.
Outside North America: Call collect: 1-519-747-6600 – Monday to Friday from 8 am to 5 pm ET.
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