Additional deposit option (ADO) flexibility and term conversion to the iA PAR participating product.
Clients with insurance coverage of $2M or less
ADO flexibility
Clients can now, at any time, make the maximum annual ADO contribution indicated in their application. Consequently, they are no longer required to secure the maximum ADO amount within the first year of the policy.
This additional flexibility allows them to accelerate the growth of their life insurance amount and total cash surrender value while optimizing how they manage their liquidity.
Term insurance conversion
Clients can now convert their term insurance coverage to a coverage of the same amount under an iA PAR participating product with the maximum ADO allowed, without additional evidence of insurability. The net amount at risk (NAR) from the illustration no longer needs to be considered.
For clients with term insurance coverage exceeding $2M, the current conversion rule still applies.
Clients with insurance coverage exceeding $2M
ADO flexibility
Your clients now have two years to secure their maximum ADO amount. In fact, the highest total annual ADO contribution made between the first and second years of the policy, no matter the premium payment method, will become the secured amount going forward. Clients may stop contributing at any time and resume at a later date1.
Examples are available for more details.
Good to know
Remember, to contribute to the ADO, your client must have selected the Paid-up additions dividend option and specified the ADO amount in their insurance application.
Also, lump-sum contributions to the ADO made in the two months leading up to the policy anniversary date will apply to the dividend calculation for subsequent years.
The iA PAR product has been a tremendous success since its launch and the dividend rate was raised to 6.25% in 2024.
1 It’s important to note that for policies issued up to March 6, 2024, some clients paid a monthly premium to secure the full annual ADO amount. For policies issued after March 6, 2024, only the total annual contribution actually paid will be secured.
