Most group insurance policies in Canada do not require medical evidence with the application, meaning that employees in the company can obtain life, disability and health coverage without a medical. The one caveat is, the insurance company can adjust the company's premiums on renewal if they have a very high claims experience.

Most insurance carriers in Canada have a non-evidence limit on life insurance and disability insurance. The amounts for long-term disability insurance vary from company to company, but they're generally in the $1,500 a month benefit range and the $75,000 range in terms of life insurance.

Additional life and disability insurance may be obtained by the employee, subject to a medical. Larger companies may qualify for higher amounts of non-evident life and disability insurance coverage.

For more details on group insurance in Canada, please contact us at 1-866-899-4849, or visit our Group Benefits Online Quotes Page.

Group Insurance and Medical Tests

Post from: Life Insurance Canada

On February 2, 2012, the Ontario Superior Court of Justice ordered that Union of Canada Life cease all business operations and its remaining assets be liquidated, finding that the insurance company had insufficient capital to ensure long-term viability.

"Union of Canada Life was faced with unique challenges that caused the company to seek court protection,” Gordon Dunning, president and CEO of Assuris told Advisor.ca. “Our analysis indicates this company had extremely high strategic, market and operational risks and insufficient capital to ensure the long-term viability of the company in a low interest rate environment.”

Assuris is a non-profit organization that is under a Canadian federal regulation to protect policyholders should their insurance company become insolvent. This means that Union of Canada policyholders will maintain their benefits, their policies will simply be transferred to another insurance company in good financial standing.

Grant Thorton Limited has been named as liquidator and Assuris will be working with them to keep policyholders informed as to how their respective benefits are protected.

"The Canadian life insurance industry is very stable,” Dunning continued to Advisor.ca, “and Canada has one of the best regulatory systems monitoring financial institutions. The Financial Services Commission of Ontario (FSCO) has been closely monitoring Union of Canada Life and has kept Assuris fully informed of all developments."

While the liquidator is arranging the transfer of policies to a new, financially viable insurance company, the remaining operations of Union of Canada Life will continue from its head office in Ottawa.

"If full recovery of policyholders’ benefits is not achieved in the transfer process, Assuris is committed to providing its protection to all policyholders.”

Union of Canada Life Insurance, founded in 1863, is one of the oldest insurance companies in Canada. They offer life and accident insurance, mortgage and investment products; presently operating in the province of Ontario, Québec, New Brunswick and Prince-Edward Island.

For more information on the ordered liquidation, go to http://www.grantthornton.ca/services/reorg/creditor_updates/union_canada_life

Source: Advisor.ca

Union of Canada Life to be Liquidated

Post from: Life Insurance Canada

On January 30, BMO Financial Group, the parent company of the Bank of Montreal and BMO Life Insurance, released their 2011 Annual Report on their website.

It revealed that the company took in a reported net income of $3,266 million during the fiscal year, which is up 16 per cent or $456 million from the year before. Their adjusted net income rose 15 per cent from the year before to $3,281 million — a difference of $439 million.

The reported earnings per share rose to $5.26, up $0.51 from a year ago. Meanwhile, the adjusted earnings per share ended up at $5.29 for the year, which is up 10 per cent, or $0.48, from 2010.

"2011 has been a terrific year for the Bank of Montreal," said Bill Downe, president and CEO of BMO Financial Group. "We finished with a net income up $450 million to a total of $3.3 billion, having announced in late December, and closed in early July, a $4 billion acquisition that has fundamentally changed our position in the U.S. Midwest. I'm pleased with our progress against all elements of the integration plan to date. Our expectations around performance and our confidence in the potential of the business are unwavering. We are well positioned as a top-10 North American bank, with a clear and visible brand, a significantly expanded retail and wealth management footprint, and a well developed wholesale presence."

LSM Analysis

BMO Insurance markets their policies directly through their call centre and website and via their independent broker network. The independent channel offers a full range of Term policies — Term 10, Term 20, and Term 30 coverage. Each plan is available at standard and preferred rates. Their Term 30 plan is renewable to 100.

Their Critical Illness plans are among the most competitively priced in the industry.

BMO Insurance's Universal plans are only sold via their broker network and features over 400 investment funds. The pricing on their Universal Life level cost policies (as has been the case with most insurance carriers) have recently risen as a result of historically low interest rates.

BMO Releases 2011 Annual Report

Post from: Life Insurance Canada

How Group Insurance works in Canada

The group life insurance component can be subdivided into basic life insurance, which provides the employee with the basic amount of coverage. This coverage amount can be a flat amount or a multiple of the employee's earnings.

Generally speaking, the larger the group, the more generous the basic life insurance amounts. Optional life insurance allows the employee to take out additional life insurance on top of his or her basic life insurance coverage. This optional life insurance is subject to underwriting requirements. Optional life insurance rates can also be adjusted at the group's renewal rate, which is often set as part of a five-year rate band.

Most group policies also provide spousal life insurance coverage.

This provides a basic amount of life insurance for the spouse and dependent children.

Group life policies end at the employee's retirement, but many plans provide the employee with a small amount of paid-up coverage and allow the insured to convert their group coverage to an individual life insurance policy. The insurance company does build a buffer into the group pricing on Group Life Conversions, so individuals who are in good health are often better off looking into an individual life insurance policy at the time of retirement.

For more details on group insurance in Canada, please contact us at 1-866-899-4849 or visit our Group Benefits Online Quotes Page.

Group Life Insurance in Canada

Post from: Life Insurance Canada

Hello I'm looking for life insurance policy in Canada that: 1) Requires no medical exam, 2) Can be paid up in 10 years or less and, 3) May be purchased without going through a broker. Thanks for your help

Thanks for the question. In term of a no medical life insurance options. You can choose between Guaranteed Issue (no health questions and no medical tests) and Simplified Issue (3 to 12 health questions and no medical tests) Simplified Issue plans have lower premiums, higher face amounts and can provide coverage from day one. Guaranteed Issue plans have a two year waiting or longer on non accidental deaths. Most direct suppliers of No Medical Life Insurance plans offer Guaranteed Issue plans and non that we are aware of are paid up in 10 years.

Read more questions and answers about Life Insurance FAQ.

New question in Life Insurance FAQ

Post from: Life Insurance Canada

Statistics from the government of Canada indicate that Canadian registered nurses, totalling 273,051 across the country, earn an average of $36.22 an hour.

Many of them get opportunities to purchase life insurance through their group benefits plan or professional associations or organizations. However, individual life insurance can give them more personal customization options to their current life situation.

Life insurance can be broken down into two categories, Term insurance and Permanent Insurance.

Term Insurance starts off lower in costs and increases as the insured gets older. The length of the term can vary. As a rule of thumb, the longer the term, the higher the initial premium, but the shorter the term, the lower the initial premium.

Most term life policies in Canada are renewable and convertible, which means the insured can renew coverage without a medical exam, albeit at a much higher premium. They can also convert the coverage into a permanent plan without a medical exam. Term rates can vary significantly from company to company, and many companies offer preferred rates, which can lower the insured’s premium by as much as 30 per cent, but only if the insured happens to be in very good health and has an excellent family health history.

Permanent Life Insurance can be subdivided into three types of plans:

Term-to-100 insurance provides level premiums and lifetime protection. Term 100 policies generally do not build cash value. However, some companies offer reduced paid-up coverage if the insured wants to stop paying. Most Term 100 plans have increased in cost in recent years due to historically low interest rates, and many carriers in Canada no longer offer Term 100 coverage

Universal Life coverage offers lifetime protection with flexible premiums, and most Universal life policies come with an increasing cost of insurance — for example, where the cost of insurance starts off lower and increases as the insured gets older, or a level cost-of-insurance option, which provides a fixed cost-of-insurance for the life of the policy. Similar to Term 100 coverage, most Universal Life, level cost-of-insurance policies in Canada have increased in price as a result of low interest rates.

Whole Life policies can be broken down into non-participating and participating policies. The former offer lifetime protection, guaranteed premiums, and a guaranteed cash value. However, these policies do not produce a dividend. The latter (participating policies) offer fixed premiums, lifetime protection, and guaranteed cash value, but they also produce an annual dividend, which allows the insured to participate in the profits of their life insurance carrier.

For more details on which life insurance policy is best for you, please contact us at 1-866-899-4849 or visit our Term Life, Whole Life, or Universal Life quote pages.

Life Insurance for Nurses

Post from: Life Insurance Canada

Group health and dental insurance plans provide coverage for a group of people, while individual health and dental coverage provides coverage to an individual and/or his family.

Group plans can be established through a company, an association, or a religious organization. There are many advantages to a group health and dental plan versus an individual plan. The following are some of the advantages:

1. Group insurance premiums often provide a better value because the cost of coverage is pooled among a larger number of individuals.

2. Group insurance policies generally do not require a medical exam, making it easier for individuals who have a past history of poor health and pre-existing conditions to qualify for the coverage.

3. Employers generally cover all or part of the group insurance premium.

4. Some group life, disability, and critical illness coverage plans allow the employee to continue all or part of the coverage.

However, the one downside of a group policy versus an individual plan is that the coverage is not tailored to the individual but rather the group. Individual health and dental plans generally allow the individual to choose from a variety of coverage options.

For more details on group health and dental insurance, please visit our Group Benefits Online Quote Page. For individual health and dental insurance, visit our Individual Insurance Quote Page or contact us at 1-866-899-4849.

Group vs. Individual Health and Dental Insurance

Post from: Life Insurance Canada

When assessing the value of your MGA, don't expect the same level of consistency as you would when assessing a bottle of wine: neither individual books of business, nor MGAs have aged very well.

"It's important to be aware that you can't assume that things will be the same as they have been," said James Hilton, managing partner of Jacox-Hilton Producer Consulting, during an audio presentation sponsored by Advisor.ca.

James Hilton and Cameron Jacox have also joined forces with LSM Insurance for a series of articles on buying or selling a book of business.

"You have to factor in the unpredictable [regulatory] world we are now entering and its impact on margins, and you have to factor this risk into the valuation because the risk is now higher than ever before," he continued.

Traditionally, businesses were valued purely based on revenue multiples such as three to five times service fees or three times segregated fund trailers.

"The problem here is it really assumes the MGA operates in a vacuum and it's purely cash-flow based," said Hilton. "It ignores the advisors and their books of business, and these are what generally comprise the MGA." Jacox added, "A shoddy advisor base with low productivity that's retirement age is far more important than historical service fees".

Jacox-Hilton's valuation model considers the advisor-centric business, so you can't ignore their books of business and their skill in managing them when valuing the MGA.

Though it may be difficult to accurately pin a price on something since prices change on a daily basis, Hilton and Jacox firmly believe that you can go deeper than the traditional calculation being used in the financial industry today.

Advisor Level

"You can be more accurate by looking at the advisor level," said Jacox. "So, we would look at a cross-section of advisor books in a very efficient way and look at the growth opportunities there and actually perform book valuations as well. Then, you can actually find out where this business is heading, so you'll look at the age of the advisors, in-force monetization, process improvement using technology, and all the other critical factors."

Book Valuation

Typically, Jacox-Hilton sees 2.5 to 3.5 times renewals and new business at about zero to two times. However, based on experience, they also see a high level of attrition (client loss) in the event of any succession by the advisor. These levels usually fall between five to ten percent, but can be much lower and much higher depending on a host of factors.

"We say five as a minimum because no matter how good the plan for succession is, there is really no way of getting rid of the feelings the clients might have of being pushed aside. So, you're going to have some kind of attrition that has to be factored in to the renewal rate calculations," continued Jacox.

He added that this number would be higher if the advisor lived by the 80-20 rule or if there were high differentiation in her practice, so the valuation would get more complex in those cases.

During this analysis of the cross-section of books, Jacox and Hilton would also go as deep as client and policy structure, asking questions such as, "What's the age of clients?"

"For example, if most of the clients are over the age of 65, the reality is going to be seg fund business down the road and renewal attrition."

Other elements during the book valuation process include looking at internal growth opportunities so that MGAs could better service policy holders and increase advisor-level production, normalizing revenues to route out excessive expenses or one-off cases, and evaluating the revenue capacity of the book itself.

Advisor Loyalty

Advisor loyalty is another factor used to evaluate the value of an MGA. "We define advisor loyalty as the amount of time an advisor has been with their primary MGA," says Hilton. "When advisors are retiring, there's no guarantee that the new advisor is going to stick with the same MGA, so there is a retention issue here."

They both also believe that advisor age is the variance of where the advisor might be in the business cycle for the books. "Age is just as important as production, so you have to know whether they will be looking at retirement soon," said Hilton.

"To minimize policy holder attrition when the book is transferred, we think that the brand and its relationship with the policyholders is what really drives attrition to be lower. So, if you can transfer books to a close colleague and maintain that relationship, in our experience, we've seen a lower degree of policyholder attrition after a transfer."

Lapse Rates

Lapse rates are only good if they're low, but at the same time, they're enormously revealing in terms of what is in a book and the quality behind a book. "We have to ask, 'How was the book approached by previous advisors?'" said Hilton. "Was the book used by an unscrupulous advisor that made big sales for big payoffs, though there wasn't necessarily longevity to the policyholders, meaning the policies will lapse in a year or two?"

Obviously this is a concern because lapsed policies will negatively impact the value of the book to the point where there is actually little to no value left. "We want to look at the books and determine the stability behind them. At almost all times, if lapse rates are high, revenue is on a downward slope," he continued.

Of course, both Hilton and Jacox thoroughly understand that most advisors are honest and hard-working people. However, in spite of this, lapse rates still need to be considered.

Regulation Valuation Impacts

From a valuation point of view, the increasingly regulated industry environment will reduce margins — plain and simple — but it has to be factored in just for the element of uncertainty that currently exists.

"If we're going to be extremely objective about putting that into a valuation, what we would assume is that the mandates are going to be in place and therefore ask ourselves, 'How you can adapt to those hypothetical mandates?'" explained Jacox.

For example, he would get you to ask questions like, "What's your client to product suitability?" "Are you currently doing any oversight in that regard?" "Are you doing any advisor oversight?" or "Any advisor screening?" He explains, "If not then you're going to have a difficult time financially and operationally absorbing any type of hypothetical mandates that may come in."

Enhanced technology that improves your ability to move paper around and communicate with your advisors will also greatly improve your ability to respond to new regulation mandates.

"Also, there will be some MGAs that will benefit greatly from a new mandate transition period because they have multiple carrier contracts," said Jacox. "So, if we saw a mandate of one MGA at a time then some people would see huge attrition, while other people would see huge growth. Those folks who are more differentiated and have a more loyal base are going to really grow through this period, while others might just fade away or be bought up."

Maximizing the Value of Your MGA

Most people only go through valuation when their looking to buy or sell a book of business, but Hilton says it's also helpful as a barometer of your MGA.

"A valuation is very revealing in terms of an MGAs strengths and weaknesses and areas of opportunity," says Hilton. "So we find a periodic valuation can actually help with business development and improving profit margins just through having a thorough understanding from a third party of what the book actually looks like and what the business looks like."

Organic Revenue Growth

Similar to what public companies do when they want to increase share value, this is about short-term growth. "The way to really drive profit is through organic revenue growth. If you look at driving profit, there are really only two options, cut costs or increase revenue," said Hilton. "However, if you start cutting costs, to a certain degree, you will be sacrificing client services."

Organic revenue growth is basically the practice of increasing advisor production while bringing a new level of service to policyholders. "As advisors become more successful, the MGAs become more successful," confirmed Hilton.

Advisors are traditionally focused on making new sales, and their books are generally very large by the end of their careers, but Hilton revealed that they often lose sight of the type of value their policyholders are receiving in the face of current alternatives.

"Essentially, they are sitting on alternatives that could benefit everybody — not only the policyholders and the advisors, but also the MGA and all the way up the supply chain to the insurance carriers. So, in a sense, servicing policyholders is no longer an obligation; it's a tremendous opportunity," said Hilton.

"We believe the way to really take advantage of these opportunities and find the client value is to identify them systematically and equip the advisor with everything she needs to make the new sales and bring value to the client."

A Real-World Example

For example, one value opportunity could be in a heavy policy loan against a cash value. The loan has a premium that's being paid on it, but the premium doesn't even cover the total cost.

"The total cost has to take into account loan interest. It has to take into account the risk involved and maybe even opportunity costs because the net cash is sitting on the sidelines of the market and is being eaten away by a loan. The policy then costs 10 or 20 to 30 per cent higher than the premium being paid," said Jacox.

From there, the question becomes, "Is this policy the best for that client?"

"We find that roughly 5 per cent of the policies in an advisor's book have loans against them, and there are two types of loans: the Christmas loan, where the client borrows $25,000 against their policy in time for Christmas, and then there's the one's where the client is in real financial trouble," said Jacox. "What this does is reduce lapse rates because these policies are all in danger of lapsing in the near future."

Interestingly, 32 per cent of clients with loans against their policies are over the age of 50 and their policies were sold prior to 1999. "This really tells us that advisors don't look closely at the older clients, who are supposed to be all set because their older, they've been with them a long time, and they're supposed to be all set with the policy they'll probably die with.

"Using this example is an opportunity to look at the very micro level to better service clients, boost that valuation, and provide a differentiating factor," he continued.

Going Shopping

Another huge opportunity for increasing the value of your MGA is buying other MGAs or books of business.

"This is a huge opportunity," said Jacox. "The primary reason we think so is because valuation multiples are low.

"We think that if we really aggressively face the challenges that are in our industry today in an entrepreneurial manner, multiples can be driven much higher and book acquisition or MGA acquisition can allow you to take advantage of some of that growth. It also mitigates the risks of your current revenue model by providing a steadier stream of renewal premiums."

Multiples can be Boosted

The margins in insurance business are considerably higher than they are in other industries. Even still, Jacox and Hilton believe that they can go even higher. "We believe multiples can be boosted to five or seven times if we see these changes: high technology adoption, strong differentiating factors among MGAs, succession strategies not just being talked about but being implemented as advisors reach these critical ages, advisor sales assistance, and of course, regulatory certainty," said Jacox, while Hilton ended with the following:

"We also believe that if we can continue to our jobs and service policyholders by bringing a new level of stability and security to them, we can do so in a much more profitable way more than ever before."

Strategies for Maximizing the Value of Your MGA

Post from: Life Insurance Canada

Individuals who are looking at augmenting their individual disability insurance but who also have group disability insurance should be aware of how group offsets work.

Group insurance offsets protect the insurance company from over-insuring individuals for disability insurance. If an individual has group disability insurance coverage, their individual disability insurance may be offset by their group coverage.

An example of this is an individual who has group disability insurance coverage and is approved for individual disability insurance coverage with a $1,500-a-month offset.

This means that every dollar on group disability insurance amounts in excess of $1,500 a month will offset the individual's disability insurance coverage. If the individual is covered for less than $1,500 a month in group disability insurance coverage, there would be no offset.

For more details on group disability or for more details on disability insurance in Canada, please contact us at 1-866-899-4849 or visit our Disability Insurance Quote Page.

How Does a Group Disability Insurance Offset Work?

Post from: Life Insurance Canada

According to the Canadian Government, there are 33,288 pharmacists working across the country making an average salary of $41.10 an hour. Though they may already have life insurance coverage through their employer's group benefit plan or as a member of a professional organization, there are a myriad of options that may be better suited to their needs.

Life insurance can be broken down into two categories, Term insurance and Permanent Insurance.

Term insurance starts off lower in costs and increases as the insured gets older. The length of the term can vary. As a rule of thumb, the longer the term, the higher the initial premium, but the shorter the term, the lower the initial premium.

Most term life policies in Canada are renewable and convertible, which means the insured can renew the coverage without a medical exam, albeit at a much higher premium. They can also convert the coverage to a permanent plan without a medical exam. Term rates can vary significantly from company to company, and many companies offer preferred rates, which can lower the insured’s premium by as much as 30 per cent, but only if the insured happens to be in very good health and has an excellent family health history.

Permanent Life Insurance can be subdivided into three types of plans:

Term-to-100 insurance provides level premiums and lifetime protection. Term 100 policies generally do not build cash value. However, some companies offer reduced paid-up coverage if the insured wants to stop paying. Most Term 100 plans have increased in cost in recent years due to historically low interest rates, and many carriers in Canada no longer offer Term 100 coverage

Universal Life coverage offers lifetime protection with flexible premiums, and most Universal life policies come with an increasing cost of insurance — for example, where the cost of insurance starts off lower and increases as the insured gets older, or a level cost-of-insurance option, which provides a fixed cost-of-insurance for the life of the policy. Similar to Term 100 coverage, most Universal Life, level cost-of-insurance policies in Canada have increased in price as a result of low interest rates.

Whole Life policies can be broken down into non-participating and participating policies. The former offer lifetime protection, guaranteed premiums, and a guaranteed cash value. However, these policies do not produce a dividend. The latter (participating policies) offer fixed premiums, lifetime protection, and guaranteed cash value, but they also produce an annual dividend, which allows the insured to participate in the profits of their life insurance carrier.

For more details on which life insurance policy is best for you, please contact us at 1-866-899-4849 or visit our Term Life, Whole Life, or Universal Life quote pages.

Life Insurance for Pharmacists

Post from: Life Insurance Canada