As of Oct. 15, Manulife lowered commissions in its level COI universal life product line to avoid raising pricing rates even more, says Paul Smith, Manulife’s vice-president of marketing and product development for individual insurance.
Among commission changes, its InnoVision UL product’s first year deposit commission has dropped from 6% to 5% and renewal year deposit commission has declined from 4% to 3%.
Manulife also lowered its Security UL draw commission rate from 7% to 3% but extended out the number of years the commission is paid. Previously this was paid from year two to year five. Now it will be applied from year two to year ten.
This move was made to align this product’s commission structure with that of the company’s InnoVision line. “Historically there’s been a disconnect between the prices and the commission on those two products…so what we’ve done is aligned the prices on both products. The commissions aren’t exactly the same, but we’ve tried to bring them closer together so that neither the advisor nor the client would be advantaged or disadvantaged by picking one product or the other.”
Peter Wouters, Empire Life’s director, retail insurance products & marketing and tax & estate planning, says his company also reduced commission for this product line earlier in the year. “When we did our restructuring on our universal life products, we reduced commission by 5%. Conversely, in our ten-year term product we increased our commissions by 5% in July. We looked at that product and said, we are making a reasonable return on that product…we would encourage people to sell that type of a product…we like that business, so we’ll pay more for it.” (DG)