Compensation guide changes effective Feb. 12, 2024

• Universal life policies with level cost type – The chargeback period for advisor-related policies will change from two years to five years. The reason for this is that we’re removing surrender charges from policies with level cost type. This change doesn’t apply to policies with annually increasing cost types.
  
• Par policies – The chargeback period for advisor-related policies will change from five years to seven years. The reason for this is to further protect the par account.
  

Here are some illustrative examples. This isn’t an exhaustive list:

• The insured person is your niece and the owner is your brother. This would be considered advisor-related, because the owner would be considered a related party of the advisor, as a family member (sibling).
  
• The owner is another licensed advisor at your firm. This would be considered advisor-related, because the owner is an advisor with Canada Life.
  
• The owner is an employee at your firm who isn’t a licensed advisor and doesn’t directly sell insurance. This would be considered advisor-related, because the definition of related party extends to an employee of the firm.
  
• The owner is a holding company owned by your firm, where you have no direct ownership in that company. This would be considered advisor-related, because the definition of related party includes subsidiaries of the firm.

• If you’re applying for a new policy – Use the appropriate section of the application to check “yes” and indicate the policy is advisor-related. 
  
  • In SimpleProtect™, this section is in Advisor Information. 
    
  • In Web App, it’s in the Advisor’s Report in General Information. 
    
  • In the paper app, it’s in the Advisor’s Report. 
    
• If you’re transferring ownership of an in-force policy to an advisor or a related party of an advisor – When you complete the Title Change Form (584 CAN), check “yes” for advisor-related. The advisor-related chargeback schedule will apply from the in-force policy’s date of issue.
  
• If you’re converting a policy to a par policy or a universal life policy with level cost type – Inform Client Services the policy is advisor-related when you submit the conversion requirements. We will add this notification to the conversion form.

Yes. If a policy goes reduced paid-up or has a base coverage reduction, within the chargeback period, there would be a chargeback. The compensation guide states that in a situation where premiums cease (or reduce), a chargeback would be applied to the first-year commission and first-year override or bonus, in line with the chargeback schedule. Where a policy goes reduced paid-up, since the premium reduces to zero, the chargeback would be applied to the full first-year commission and first-year override or bonus, based on the schedule in the compensation guide. Where the policy has a base coverage reduction, since the premium reduces, the chargeback would be applied to the full first-year commission and first-year override or bonus related to the reduction in premium, based on the schedule in the compensation guide. For more information on the chargeback schedule, see the compensation guide.