National Life introduces Hedge Accounts

Date: Monday, June 23, 2003

National Life announced Monday that it is now offering Hedge Accounts to new and recently issued Flex Account and e-Universal Life policies, providing policyowners with greater protection against the volatility of stock markets. The company says the accounts act as a convenient access point to the benefits of hedge fund investing. It is the first Canadian insurance company to offer Hedge Accounts in universal life policies. "Many investors are looking for investments that can stand up to poor performance in the stock market," says Promod Sharma, Actuary, Individual Insurance. "We've added a new category of investments which offer performance based on hedge funds." "Our first Hedge Account is the Multi-Strategies Account. Returns are based on the well-received National Life Multi-Strategies (Univest) Fund, which is part of our Alternative Investment Strategies segregated fund product," says Sharma. "The aim of the underlying fund is to give a higher rate of return than traditional investments with lower risk than a typical Canadian bond index." The company says Hedge Accounts are similar to Market Index Accounts in that returns are based on the percentage change in the unit value of an underlying reference investment. Both MIAs and Hedge Accounts have the potential for positive or negative returns. The minimum deposit or withdrawal amount from a Hedge Account is $1,000. Deposits may be made annually, monthly, or on an ad hoc basis. The maximum allocation to Hedge Accounts is 80% of new deposits, whether scheduled or ad hoc. Hedge Accounts are available on the current version of Flex Account and e-Universal Life, and National Life says more are planned for in the future.