Life’s brighter under the sun

P A R T I C I P A T I N G D I V I D E N D S

CENTURYof proven performance

Over a

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 state;2 and British Columbia joined Confederation.3 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.

First dividends paid to Par policy owners - during the Long Depression which began in the 1870s. $4,603

Dividends declared4

Head office staff, ca 1887

Annual Report, 1893

Founder’s Application, 1871

1893Over $16,000 in Par policy owner dividends paid and $343,413 for death claims, matured endowments and other payments to policyholders. $16,438

Dividends declared4

Sun Life starts selling Par life insurance.

1877

1871

Sun Life newsletter ‘Sunshine Magazine’, 1918, No. 1

1921 Agents Convention

1918

1920

Par policy owner dividends were paid and dividends increased every year from 1914-1919 during World War I.

$1,455,118Dividends declared4

$1,563,954Dividends declared4

Sun Life paid out over $1.5 million in policy owner dividends at a time when the average males’ annual salary was $1,057.5 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.6

1930 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

Dividends declared4

1944Even after 5 consecutive years of World War II, Sun Life still paid over $10 million to its Par policy owners.$10,142,618

Dividends declared4

Annual Report, 1944

Illustration from Sun Life newsletter ‘Monthly Agency Review’, March 1936,

$115,578,044Dividends declared4

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.

$701,000,000Dividends declared4

2009

1978

2017$599,000,000

Dividends declared4

In 2010, Canadians named Sun Life the most trusted brand in life insurance in Canada10 – an honour it’s maintained for nine consecutive years since.

2010

By the end of 2017, Sun Life had over 1.2 million Par policy owners, and issued dividends for the year totaling $799 million. During the year, Sun Life also paid $3.8 billion in death and disability benefits, demonstrating that we meet our obligations to Par policy owners.

$799,000,000Dividends declared4

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 2008.

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 145 years old, giving us balanced exposure between recently purchased assets and those purchased over the course of the last 30 years. With invested assets of $9.9 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 seven years in a row.11

Life’s brighter under the sunSun Life Assurance Company of Canada is a member of the Sun Life Financial group of companies.© Sun Life Assurance Company of Canada, 2018.810-4641-05-18

Questions? We’re here to help.

Talk to your advisor about Sun Life Financial today!For more information and resources visit www.sunlife.ca | Call 1 877 SUN-LIFE / 1 877 786 5433

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.

1 Statistics Canada. www.statcan.gc.ca/pub/98-187-x/4151287-eng.htm2 Parliament of Canada. www.parl.gc.ca/about/senate/monarchy/senmonarchy_00-e.htm3 Historica Canada. www.thecanadianencyclopedia.ca/en/article/british-columbia-and-confederation/4 All dividends declared from Sun Life sources: 1877 - Sun Mutual Life Insurance Co., Annual Report; 1893, 1918, 1920, 1930, 1944, 1978, 2009, 2011 - Sun Life Assurance Company of Canada,

Annual Report; 2010 & 2017 - Sun Life Assurance Company of Canada, Information for voting policyholders booklet.5 Statistics Canada. www65.statcan.gc.ca/acyb02/1937/acyb02_19370800009a-eng.htm6 Statistics Canada. www65.statcan.gc.ca/acyb02/1937/acyb02_19370800009a-eng.htm7 Historica Canada. www.thecanadianencyclopedia.ca/en/article/great-depression/ 8 inflation.eu Worldwide Inflation Data. www.inflation.eu/inflation-rates/canada/historic-inflation/cpi-inflation-canada-1978.aspx9 National Bureau of Economic Research. www.nber.org/chapters/c11148.pdf page 510 In 2018, Canadians named Sun Life the most trusted brand in life insurance in Canada for nine years in a row, according to a consumer poll commissioned by Reader’s Digest for its

2018 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. www.rotman.utoronto.ca/FacultyAndResearch/ResearchCentres/ClarksonCentreforBoardEffectiveness/Board-

ShareholderConfidenceIndex.aspx