The Canadian insurance industry continues to tweak products to stay competitive and profitable.

In a move to offset negative effects of low interest rates, BMO Life and Canada Life have made rate changes to their insurance products.

Read: More insurance products on the chopping block

In an internal memo obtained by, BMO Life has announced changes to preferred Term 20 rates and Universal Life plans and riders.

The changes made to the 20-year preferred term life pricing include improved premiums, guaranteed and renewable to age 85, convertible at any time prior to age 70, and a preferred rate of $100,000.

“These improvements benefit the client on both issue and renewal rates for most ages and risk classes,” says Steve Carter, senior vice-president, product management & development, BMO Insurance. “This change is also beneficial for insurance advisors because BMO has increased the first year commission paid from 45% to 50%.”

Effective May 13, 2013, BMO Life is also increasing the level cost of insurance (LCOI) for its UL plans by +7% for smokers and +11% for non-smokers.

“The rate changes being made to LCOI bring BMO Insurance in line with industry pricing standards and reflect the low interest rate environment we find ourselves in,” says Carter.

Canada Life, according to an internal memo, is repricing its disability insurance (DI) and universal life (UL) insurance products.

Read: RBC suspends permanent insurance

For DI, base rates for occupation class 4A are increasing an average of 4%, effective Friday, May 24, 2013. Further, some riders are increasing an additional 2% to 5% while return-of-premium (50%) rider is increasing an additional 5.6% for all occupation classes.

“Historically, low interest rates have put pressure on insurance companies and products,” says Saundra Edwards, assistant vice-president, market development, Canada Life. “The changes we are making reflect this reality.”

Canada Life is also increasing the level cost of insurance rates of its UL products by an average of 2%.

Read: Empire Life restricts GMWB deposits