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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, 2011, the dividend scale will decrease for the following policies:
For Manulife:
- Performax
- Security Builder
- Whole Life / Endowment
- Life Income
- Manulife 75
- Manulife Protector
- Econolife
- Executive Protector
- Estate Protector
- Twenty One Plan
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For former North American Life:
- Whole Life
- Limited Pay Life
- Enhanced Protection
- Endowments
- Indexed Protection
- Genesis
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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.
The investment environment continues to be a challenge. Interest rates are historically low and these low interest rates have impacted the overall participating investment portfolio yield. Consequently, to maintain the integrity of the participating account into the future, we are decreasing the scale this year for the majority of our participating policy owners.
It’s important that you understand that we review the participating account every year and the dividend scale may be adjusted again in the future.
3. How long do you expect the dividend scale to remain at the new level?
The dividend scale is effective September 1, 2011.
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. Are participating policy dividends decreasing because Manulife's profits decreased?
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 affected 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.
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