Interest Options

Variable interest options (VIOs)

The returns credited on variable interest options follow the returns from widely recognized investment market indexes and mutual funds. The index-linked and fund-linked variable interest options credit interest each business day, based on daily changes to the underlying index or fund, after deducting applicable administration fees. Index-linked returns are credited net of an interest option fee. Fund-linked returns are credited net of the management expense ratio (MER) and, for ABC funds and funds with client bonus, an interest option fee (IOF).

The interest credited on any day may be positive or negative. If the interest credited is negative, the balance in that interest option is reduced.

The performance of variable interest options with a foreign element, such as the Global Equity and American Equity options, is affected by the value of Canadian currency, relative to the currencies measured in the indexes. A declining Canadian dollar generally enhances returns, while an escalating Canadian dollar generally has the opposite effect.

Guaranteed interest options (GIOs)

Millennium offers guaranteed interest options that earn compound interest. They earn interest on their balance daily, at the guaranteed interest rate, until the end of the term. Interest is credited to the balance monthly, until the end of the guarantee period. At maturity, the principal and interest are reinvested automatically in a guaranteed interest option of the same type and duration.

You can choose from several durations: 1, 3, 5 or 10-year terms. The minimum amount to start a guaranteed interest option is $25.

The minimum interest rate for terms from 1 to 10 years is:

*For policies without client bonus dated May 26, 2008 and later, the minimum 10-year GIO rate is 3.0%. The minimum 10-year GIO rate for policies with or without client bonus dated before May 26, 2008 is 2.5%.

For more information on guaranteed interest options, ask your advisor for a copy of the Millennium interest options brochure.

Daily interest option (DIO)

The daily interest option (DIO) provides daily interest earnings that earn compound interest with a fluctuating interest rate that is sensitive to short-term money market rates. Interest is calculated daily on the daily interest option balance and is credited each month to the daily interest option account.

Canada Life sets the effective annual interest rate for the daily interest option at least weekly. Canada Life guarantees a minimum interest rate calculation of not less than 90% of the yield on short-term Government of Canada treasury bills, minus 1.75% for Millennium universal life and 2.25% for Millennium universal life with client bonus. The interest rate credited to the daily interest option will never be less than 0%.

Based on the standard deviation of monthly returns over a 3-year period, the volatility is classed as low.