Over a CENTURY. of proven performance. Life s brighter under the sun

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1 P A R T I C I P A T I N G D I V I D E N D S Over a CENTURY of proven performance Life s brighter under the sun

2 Sun Life Financial has a long history of selling participating (Par) life insurance and issuing policy owner dividends. In 1871, we issued our first Canadian participating policy. During that same year, the first national Canadian census was taken and found that Canada had grown to nearly 3.7 million people;1 Queen Victoria was the head of state2; and British Columbia joined Confederation3. Six years after Sun Life started selling participating life insurance, the first policy owner dividend was paid and we ve declared dividends for participating life insurance policy owners every year since. Even during times of economic turmoil, Sun Life s commitment to participating policy owners has remained strong Sun Life starts selling Par life insurance. Founder s Application, 1871 Head office staff, ca First dividends paid to Par policy owners - during the Long Depression which began in the 1870s. $4,603 Annual Report, Over $16,000 in Par policy owner dividends paid and $343,413 for death claims, matured endowments and other payments to policyholders. $16,438

3 1918 Par policy owner dividends were paid and dividends increased every year from during World War I. Sun Life newsletter Sunshine Magazine, 1918, No. 1 $1,455, Agents Convention $1,563,954 Sun Life paid out over $1.5 million in policy owner dividends at a time when the average males annual salary was $1, Monthly rent was $24.80, one dozen eggs cost 70.9 cents, a quart of milk was 15.1 cents, and a loaf of bread was 9.3 cents The 1930s Great Depression left millions of Canadians unemployed, hungry and often homeless. 7 Sun Life continued to meet its commitment and paid an average of over $16.5 million per year to Par policy owners. $22,820,311 Illustration from Sun Life newsletter Monthly Agency Review, March 1936, 1944 $10,142,618 Even after 5 consecutive years of World War II, Sun Life still paid over $10 million to its Par policy owners. Annual Report, 1944

4 How has Sun Life managed to declare dividends every year since 1877, even during times of economic uncertainty? Strength of Sun Life Financial: Our history and longstanding commitment to our clients has made us a leading player in the Canadian financial services market. We re a strong, well-capitalized enterprise, and have an established record of financial strength and a tradition of honouring our financial commitments. Long-term investment strategy: Sun Life manages the Sun Life Participating Account to meet the long-term needs of Par policy owners, with the objective of providing superior, stable returns. We invest in a variety of holdings including: public bonds, private fixed income, commercial mortgages, real estate and equities. Diversification and long-term investment expertise are the keys to our success across and within the asset classes. Large, well-established Par account: The Sun Life Participating Account is over 140 years old, giving us balanced exposure between recently purchased assets and those purchased over the course of the last 30 years. With invested assets over $8.5 billion in the participating account, Sun Life has access to a range of attractive investment opportunities that may not be available to a smaller investor or account. Use of smoothing techniques: We employ smoothing techniques that help keep the dividend scale interest rate more constant over time. The 25-year standard deviation of the Sun Life Participating Account dividend scale interest rate has remained more stable and over half that of the Government of Canada 10-year bond interest rate. Prudent management philosophy: Sun Life s Board of Directors uses its discretion to determine the distribution of dividends to Par policy owners and sets the policy for managing dividends for Par policies. Our dividend policy requires us to use a fair and equitable process for managing the total distribution to policy owners. Sun Life s board of directors has been ranked as one of the top board of directors in Canada for five years in a row. 11

5 1978 $115,578,044 Par policy owner dividends increased each year during the 1970s Oil Crisis. In 1978, inflation increased to nearly 9%,8 unemployment rose to 8.3%,9 and Sun Life still paid out over $115 million in Par policy owner dividends $701,000, In the face of the global financial crisis dubbed The Great Recession, Sun Life Financial remained among the world s strongest insurance companies and continued building its businesses. We paid policy owner dividends of over $500 million every year since the stock market crash in late In 2011, Canadians named Sun Life the most trusted brand in life insurance in Canada10 an honour it s maintained for seven consecutive years since. $590,000, By the end of 2015, Sun Life had over 1.3 million Par policy owners, and issued dividends for the year totaling $697 million. During the year, Sun Life also paid $3.5 billion in death and disability benefits, demonstrating that we meet our obligations to Par policy owners. $697,000,000

6 We re dedicated to helping you achieve lifetime financial security. At Sun Life, our mission is to help Canadians achieve lifetime financial security. Talk to your advisor about how Sun Life s participating life insurance can help you achieve a brighter financial future by providing life insurance protection, coupled with the opportunity to receive policyholder dividends from one of the strongest participating accounts in Canada. Questions? We re here to help. Talk to your advisor about Sun Life Financial today! For more information and resources visit Call SUN-LIFE / Statistics Canada. 2 Parliament of Canada. 3 Historica Canada. 4 All dividends declared from Sun Life sources: Sun Mutual Life Insurance Co., Annual Report; 1893, 1918, 1920, 1930, 1944, 1978, 2009, Sun Life Assurance Company of Canada, Annual Report; Sun Life Assurance Company of Canada, Information for voting policyholders booklet. 5 Statistics Canada. 6 Statistics Canada. 7 Historica Canada. 8 inflation.eu Worldwide Inflation Data. 9 National Bureau of Economic Research. page 5 10 In 2016, Canadians named Sun Life the most trusted brand in life insurance in Canada for seven years in a row, according to a consumer poll commissioned by Reader s Digest for its 2016 Trusted Brands awards program. Trusted Brand is a registered trademark of Reader s Digest Association Canada ULC. 11 Board shareholder confidence index, Rotman school of management. ShareholderConfidenceIndex.aspx Life s brighter under the sun Sun Life Assurance Company of Canada is a member of the Sun Life Financial group of companies. Sun Life Assurance Company of Canada,