participating (par) life insurance
ANSWERS about …
• What Canadian participating (par) policies
are managed by Sun Life?
• What is par life insurance?
• What are the differences between policyholder
dividends and shareholder dividends?
• What determines the dividend payable
on a par policy?
• What is meant by “Experience”?
• How are par premiums invested?
• How do par portfolio investments respond
to market conditions?
• Is there investment risk associated with
• What safeguards are in place to protect
my interests as a par policyholder?
What Canadian participating policies are managed by Sun Life?
Sun Life Assurance Company of Canada (Sun Life) and Clarica Life Insurance Company (Clarica) were at
one time two separate mutual companies, owned by their participating policyholders.
Each company changed from a participating company to a publicly traded stock company in a process
called demutualization. This process complied with rules and regulations that outlined the ongoing rights
of par policyholders.
In 2002, Sun Life and Clarica amalgamated and formed one insurance company, “Sun Life Assurance
Company of Canada”.
The answers we are providing apply to the participating (par) policies issued by Sun Life, Clarica (formerly
Mutual Life), and also the Canadian par policies, acquired by Clarica, several years ago, when it bought
The Prudential Life Assurance Company of England (Canada) and the Metropolitan Life Insurance
Company of Canada.
What is par life insurance?
Life insurance involves the transfer of risk from an individual to a life insurance company. With
participating insurance, a portion of the risk is shared among the policyholders and the company.
We call it “participating insurance” (or “par insurance”) because the policyholder participates in
the risk along with the insurance company.
As part of this risk-sharing relationship, par policyholders may also share in certain rewards when their
policies perform better than originally expected. This rew