Manu to close deposits on 2 guaranteed income products

Manulife Financial will close additional deposits on two of its guaranteed income products, IncomePlus Versions 1 and 2, as of 4 pm on August 8, 2012.

In a statement, the company blames low interest rates.

“Since the recent changes to payout percentages were announced on April 2 of this year, interest rates have continued to drop, which has significantly impacted Manulife’s ability to continue to allow deposits to the older versions of IncomePlus,” the company says.

It also warns, “Additional product changes may be required in the future in order to continue to adapt to changing market conditions.”

Read: RBC exits permanent insurance

IncomePlus Version 1 contracts are those purchased prior to October 5, 2009, and Version 2 contracts were purchased between October 5, 2009 and April 29, 2012.

The company will not inform clients about the closure of these contracts to additional deposits, and suggests advisors contact clients who may want to make further deposits.

Read: Transamerica cuts shelf to focus on life

There are no changes to IncomePlus Version 2.1 or the other GIF Select Series (InvestmentPlus or EstatePlus) at this time.

Read: Future bleak for guaranteed income products

In a further de-risking move, Manulife announced the following funds will be closed to new deposits and switches-in effective October 31, 2012 for IncomePlus Version 2.1 and EstatePlus only:

• Manulife CI Harbour Growth & Income GIF Select
• Manulife CI Signature Income & Growth GIF Select
• Manulife Dynamic Power Balanced GIF Select
• Manulife Dynamic Value Balanced GIF Select
• Manulife Fidelity Canadian Asset Allocation GIF Select
• Manulife TD Dividend Income GIF Select

For more information, read the release here.

Melissa Shin

Melissa is the editorial director of Advisor.ca and leads Newcom Media Inc.’s group of financial publications. She has been with the team since 2011 and been recognized by PMAC and CFA Society Toronto for her reporting. Reach her at mshin@newcom.ca. You may also call or text 416-847-8038 to provide a confidential tip.