This article is an extension of Important deadlines for new business and current tax rules, published October 6, 2016, and includes additional information.
Additional information - Deadlines for new business and current tax rules
The new tax rules governing life insurance takes effect on January 1, 2017. As a result, some of the opportunities that exist today for universal life insurance plans will only be available for policies issued by December 31, 2016.
The industry has been working with the Canadian Life and Health Insurance Association (CLHIA) and governing bodies, advocating for transition rules. Recent changes to the transition rules now allow for clients to receive 2016 tax treatment for policies with temporary insurance agreements into the early part of 2017.
Below are key dates to help you manage your universal life insurance new business with ivari.
November 14, 2016
We will launch our new enhanced prosperity Universal Life product under current tax rules (G2)
prosperity Universal Life™ insurance makes it easy and affordable for clients to achieve a complete and balanced financial plan, by providing four key components that make up a strong foundation:
- Discipline
- Investment growth
- Tax–deferred growth
- Income protection
Stay tuned for more information on these products.
November 15, 2016
This is the deadline to submit any current prosperity applications to be issued under the current 2016 tax rules (G2).
December 5, 2016
This is the final date that our current prosperity Universal Life product will be available for sale.
We strongly recommend that any new business and/or policy changes requiring underwriting on the current prosperity product be submitted well before the December 5, 2016 date to ivari’s Head Office.
If we receive an application and illustration (LifeView 10.4 WFG) for the current prosperity after this date, we will set up the application as a new prosperity Universal Life. A new illustration under the new prosperity universal life product will be required upon delivery.
What you need to know
- The insurance application that was submitted and underwriting is still valid.
- We will set up the new prosperity Universal product once the new illustration (LifeView 11.0 WFG) and new supplement to the insurance application as an outstanding delivery requirement.
- Underwriting for applications on current prosperity Universal Life with a Temporary Insurance Agreement (TIA) will not be extended into 2017.
- As of December 5, 2016, for any multi-life policy where one life is approved and one life is still pending, we will issue the approved life as a single policy in order to take advantage of the G2 tax legislation.
Cut off deadline
Paper applications
Deadline for receiving app at ivari’s Head Office: December 5th 2016 5:00 p.m. EST
Electronic application
Deadline for receiving AppVantage app at ivari’s Head Office: December 5th 2016 11:59 p.m. EST
December 31, 2016
This is the deadline for new prosperity Universal Life applications with valid TIA to be considered for G2 tax treatment into 2017 (March, 31 2017).
While we will do everything we can to issue polices prior to December 31, 2016, we cannot guarantee that all applications submitted by the above deadlines at ivari’s Head Office, will be issued under the current 2016 tax rules (G2).
January 1, 2017
We will re-launch prosperity Universal Life under new tax rules (G3).
Summary Chart of Key Dates
How you can help
You can help us get your clients' policies issued faster by ensuring that all applications are submitted with the following requirements:
- The application and TIA is In Good Order.
- A cheque for the first premium payment is included with the application.
- You quickly complete any underwriting, issue or delivery requirements that are outstanding.
- If your application is a multiple life policy or a corporately owned policy we strongly suggest that you submit these applications well before November 15, 2016.
If Applying for a TIA:
- Complete the application for temporary insurance for each proposed insured on page 25 of the insurance application.
- The application for temporary insurance must be signed by all the Proposed Insured(s) and the Policy Owner(s).
- A cheque payable to ivari or written authorization to withdraw the initial premium (one monthly modal premium) must be submitted with the application for temporary insurance.
- The TIA receipt (page 31 of the insurance application) must be given to the Policy Owner.
All limitations and conditions as stated on the application must be followed.
Keeping you informed
We will keep you updated on important dates related to the upcoming tax changes and the launch of our new prosperity universal life product in future issues of ivari info and in the 2017 tax changes section of ivari.ca.
You can also reach us at WFG ROCKS at 1-866-934-ROCK (7625) between the hours of 8:00 a.m. and 7:00 p.m. EST. Monday to Friday.