INSURANCE COMPANIES TARGET MIDDLE-INCOME MARKET WITH LESS COMPLEX UNIVERSAL LIFE PRODUCTS
Marie-Josee Boucher - "Life Insurance Journal" (continue)

"Advisors just want a product that they can understand and that they can offer to their clients, said Saundra Edwards, assistant vice-president, marketing, life Insurance at Great West Life.

After focusing on whole life insurance for the past few years, Great-West is now completely overhauling its UL product. It plans to launch a new version in 2005.

"The one we have is not competitive on the market," explained Ms. Edwards. "We have to create a product that meets our profitability target."

Universal Life insurance accounts for 50% of individual life insurance sales in Canada, Ms. Edwards added, quoting figures compiled by LIMRA International for the first half of the year. Of this total, Great-West controls less than one per cent.

When it launched Foundational Life early this year, RBC Insurance targeted a very precise market. "We had the idea of creating a product for the mid-market, a little simpler than the initial one. There's definitely a market for a product at mid-point between a more sophisticated product and a basic one. We had to respond to the emerging trend", said Neil Skelding, president and CEO of RBC Insurance.

For its part, Manulife began marketing two UL versions several years ago. The insurer wants to satisfy the needs of the two major profiles of UL customers, said universal life insurance product manager, Michelle Lennox. The simpler product is tailored to the profile of a family market that wants permanent protection, that does not want a slew of investment accounts, and that only wants to pay a small excess premium. The target profile of the traditional UL product is that of a clientele with high net value, whose main goal is to protect their wealth.