PPI, in collaboration with two insurers, has launched two new life insurance products that are designed to provide clients with a high level of coverage in the early years of the policy, and less coverage later in life. And, as an incentive for advisors to provide ongoing advice to the clients purchasing them, the new products are structured to provide long-term compensation to advisors.

Toronto-based PPI, which markets insurance solutions though two channels, PPI Advisory and PPI Solutions, announced on Thursday the launch of the two products: LifePhases and The Signature Universal Life Plan.

Both products provide a level of coverage that’s highest at the beginning. That’s when a client’s coverage requirements are typically the greatest, since they’re often raising children, managing debt, and juggling a slew of other financial obligations, says Yves Bergeron, president of PPI Advisory in Vancouver.

“When you purchase life insurance, you have all kinds of obligations,” he says. “So, your insurance needs typically tend to be maximized close to the time when the insurance is purchased.”

The coverage provided by LifePhases and Signature Life begins to decrease as clients get older and their need for coverage declines. “As you accumulate assets through life and get closer to retirement, most likely your insurance needs are decreasing,” says Bergeron.

LifePhases is offered as either a term or a permanent policy. Under the term policy, the level of coverage begins to decrease when the client turns 65, falling to zero by the time they turn 75. Under the permanent policy, the coverage begins declining when the client turns 70, falling to 25% of its original value by the time the client turns 80. After age 80, the client is covered by the permanent policy for the rest of their life, with no further premiums required.

“It maximizes the coverage when we feel clients need it most,” Bergeron says.

LifePhases was designed as an alternative to renewable and convertible term insurance policies, which are typically offered with premiums that start very low, but become exponentially higher each time they’re renewed. In contrast, LifePhases features premiums that are higher at the beginning, but increase less over time. Each time the policy is renewed for another 10-year term, Bergeron says the premiums only increase by a maximum of 50% of the prior level of premiums.

“Despite the fact that R&C term is incredibly cheap to buy, and it’s sold quite a bit in the Canadian marketplace, it’s also unfortunately impossible to keep, and that’s because of these premium increases,” he says. “We’ve designed this product exactly to address this.”

LifePhases, which PPI launched in collaboration with Moncton-based Assumption Mutual Life Insurance Company, is targeted at the broad mid-market.

Signature Life, meanwhile, is a low-fee universal life insurance product aimed at more affluent clients. PPI launched the product in partnership with BMO Insurance.

Similar to LifePhases, insurance coverage under the Signature Life product decreases as the client gets older.

The product was designed, in part, to address the rising cost of insurance products, Bergeron says.

“The MERs have gotten so large within the universal life products, unfortunately, that it’s made the investment component of the universal life product less attractive than it was in the past,” he says. “Signature Life is designed specifically to address this problem, and to offer a much lower management expense ratio.”

Bergeron says the management fees associated with the product will be an additional 50 basis points lower than other low-cost universal life policies on the market.

Both LifePhases and Signature Life are designed to provide advisors with ongoing compensation throughout the duration of the policy, rather than just a high volume of commissions when the policies are first sold, Bergeron says.

“We want to encourage independent advisors to sell products that have lifetime compensation,” he says, “because we feel that the long-term compensation is there to ensure that independent agents will have an incentive to give good service to clients on a long-term basis.”

The products are available to independent insurance and financial advisors contracted with PPI’s two channels: PPI Solutions and PPI Advisory.