2017 TAX CHANGES
What changes will apply to SSQ products available
for sale as of January 2017 and what modifications
will be allowed thereafter?
Following a series of measures adopted in the 2012 federal budget, a number of changes will be made to tax rules affecting life insurance contracts,
effective January 1, 2017. A contract will be governed under the new tax rules as soon as one of the following two dates takes place after 2016:
– the approval date by underwriting; or
– the policy date (or the coverage effective date);
unless certain conditions are met and the contract is then governed under the current tax rules (to that end, please refer to the document Administrative rules).
Products available for sale as of January 1, 2017 will comply with the new tax guidelines. Here are the details on changes to SSQ product features that
will be available for sale in January.
CHANGES TO SSQ PRODUCTS – JANUARY 2017
Product
Change
Details
This also means that since September 15, 2016:
SSQ Universal Life insurance
Multi-life coverage option is no longer
offered since September 15, 2016.
Term life insurance, critical illness insurance or a critical illness rider
within a universal life contract cannot be offered:
- If the coverage is for another insured, in the case of an individual
policy; or
- If the policy is joint.
Other additional benefits however remain available.
Term Life insurance
(Term Life and Term Plus)
The conversion of multiple term
life coverages covering more than
one insured into different universal
life coverages within the same
contract is no longer possible since
September 15, 2016.
Permanent Life insurance
(Whole Life 20, Whole Life 100
and Term 100)
No changes to product features.
Critical Illness insurance
No changes to product features.
Prescribed annuities
No changes to product features.
Each insured needs to convert their coverage into separate universal
life insurance contracts.
However, conversions to traditional permanent life insurance
benefits offered by SSQ (Whole Life 20, Whole Life 100 and
Term 100) within the same contract remain possible.
Individual insurance
Change requests affecting contracts governed under the new tax rules will be handled as follows:
CHANGES TO IN-FORCE CONTRACTS GOVERNED UNDER THE NEW TAX RULES
Handling of requests based on type of policy
Change request
Traditional Life insurance
Universal Life insurance
A traditional life insurance policy
is a life insurance policy other than universal life.
Term life insurance or critical illness insurance cannot be
added:
- If the coverage is for another insured, in the case of an individual
Addition of a benefit
policy; or
Allowed according to administrative rules in effect at time
of request.
- If the policy is joint.
Other additional benefits however remain available, as long
as they are in accordance with the administrative rules in
effect at time of request.
Addition of an insured Allowed according to administrative rules in effect at time
Not allowed
person
of request.
On Term Plus, it is still possible to change the option from Level The change in death benefit option is only allowed when
Change to the death
to Decreasing and vice-versa, according to administrative the net amount at risk is the same or lower (change without
benefit option
rules in effect at time of request.
proof of insurability).
The following policy modifications will still be possible:
- Additions without evidence of insurability (exercising an insurability benefit
option, increase of insurance amount on Term 10 indexed or when the
death benefit option, on universal life, is Indexed, automatic increases due
to the insurance amount adjustment option on universal life);
- Change from a joint policy to individual policies;
- Change from YRT to Level T100 cost of insurance (for universal life insurance
policies);
- Change of owner, payor or beneficiary;
- Change to the billing premium (for universal life insurance policies);
- Changes to the insurance amount adjustment option (for universal life
insurance policies);
- Change to non-smoker rates;
- Conversion or exchange of a term life insurance benefit;
- Division of a multi-life policy into individual policies (for traditional life
insurance policies);
- Exercising the reduced paid-up option (for whole life insurance policies);
- Improving a risk classification;
- Partial withdrawal;
- Policy loan;
- Policy reinstatement;
- Reduction of insurance amount;
- Removal of a benefit or additional benefit;
- Removal of an insured;
- Revision of rating.
ILLUSTRATION SOFTWARE
A new version of the illustration software (6.0) will be available on December 20, 2016. It will
reflect changes as required by the new tax rules as well as any product changes.
Please contact your SSQ representative for more information.
ssq.ca
Quebec Sales Office
Ontario, Western and Atlantic Canada Sales Office
Client Services
Tel.: 1-888-292-8483
Tel.: 1-888-429-2543
Tel.: 1-800-565-4550
MIND0236A (2016-11)