How does it work?
Participating life insurance premiums that you or any other policyholders pay are pooled and deposited in a separate account called a participating account. This account is managed separately from all other Desjardins Insurance accounts.
As a policyowner of a participating life insurance policy, you’re participating to grow this account by receiving dividends. Dividends are credited annually, on the policy anniversary, when the participating account results are better than the assumptions used to determine the guaranteed values.
Note: dividends are not guaranteed as they are subject to various factors such as the investment returns, mortality rates, and taxes and expenses paid by the insurer. Once they are credited, they belong to you and cannot be taken away.
You can use dividends to:
- Take out additional insurance to increase the cash surrender value of your policy and maximize your estate’s growth3
- Reduce the annual premium payment4
- Receive a cash payment5
- Deposit into saving accounts to earn interest5
The dividend scale interest rate
- The dividend scale interest rate is used to reflect investment returns and is one of the key factors that helps determine your dividends. Its variation may result in an increase or decrease in the policy's non-guaranteed values.
Our Par Life dividend scale interest rate will increase to 6.3% on the 1st of July 2024, for our current lineup of participating life insurance policies.
The smoothing method
- To minimize market fluctuations, a smoothing method is applied to spread investment gains and losses over several years. This method reduces volatility and helps stabilize the dividend scale interest rate.
Solid financial performance
- In addition to the investment return smoothing method used to mitigate performance fluctuations, the long-term stability of the dividend scale interest rate is also based on a robust portfolio composition that relies on the diversification of asset classes to reduce volatility.
Want to feel confident about where your money is going?
3 Enhanced insurance is the only option available at the time of sale of the 5 Pay PAR product. PUAs, Cash payment and Dividends on deposit options may be available 10 years after the policy is issued, if the exempt test is met.
4 This option is not available with the 5 Pay PAR product.
5 Tax consequences are to be expected.