Canada Life converts whole-of-life plan to pure protection product

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Canada Life is converting its whole-of-life Flexible Life Plan into a pure protection product, meaning it can continue to pay commission post-Retail Distribution Review (RDR).

From 31 December this year, when new rules following the RDR are implemented, it will no longer pay the surrender value of the fund in the investment element of the policy.

Instead, the money will be used to continue to pay the policyholder's premiums, until the fund amount is exhausted.

Canada Life said most consumers take out the plan on a maximum cover basis, meaning little is diverted into a fund for investment. Few policyholders have any surrender value on the fund, it said.

Commission, though banned for retail investment products from next year, can continue to be paid on pure protection policies.

The move is part of the group's preparations for life post-RDR.

Canada Life is also closing two investment bonds: the Total Access Bond will only be available for top-ups post-RDR, while the Select Investment Bond will be closed completely.

The group is set to share its plans on how it will facilitate adviser charging payments.

It will officially announce its plans next week, though the group is set to permit adviser charge deductions from its entire product range if the charge is agreed before policy set-up.

If the charge is agreed after set-up, the group will facilitate the payment of the charge on most of its investment products.

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