I was just checking out our Key Canadian Financial Data page and realized and was shocked to notice that the inflation rate is double what you can get on a term deposit. Inflation is at 2.52% according to the Bank of Canada.
One year term deposits are half that (from .650 to 1.40 if you have over a $1,000,000). The actual banks are a little bit hungrier for money than that and will give you 1.5% on a one year term deposit, even starting at $1000.
Given the amount of money the American government is issuing to prop up the banking system and now to car manufacturers - the Canadian government is almost certain to follow in the US footsteps, although hopefully on a smaller scale - holding your money in cash or term deposits is a guarantee of starting next year with less money than you have now.
After what happened in the stock market, there are no easy answers but several life insurance companies in Canada offer risk free tax preferred solutions Many Canadians are unaware that Universal life insurance contracts offer risk free accounts which grow on a tax sheltered basis and with minimum investment guarantees of 4% or higher. A great feature in today's low interest rate environment
If you would like more information, give me a call at 905.248.4849 to discuss your own situation.
It's no secret the stock markets are way off. The Dow Jones is under 8000 knocking off 8 years of progress.
On the other hand, life insurance companies offer guaranteed investment policies. Sounds like the perfect solution...
Life insurers have long guaranteed to return 75 per cent of a person's original capital after 10 years, or sooner if the investor dies during a period of low stock prices.
They enjoyed a flurry of sales when they stepped up the guarantee to 100 per cent and allowed investors the right to more frequent resets of their capital guarantees....
Later, in response to competition, Manulife extended the 5 per cent minimum withdrawal benefit for a lifetime, thus turning its investment funds into something closer to a company pension plan or an old-fashioned life annuity.
Investors can now be confident that a $100,000 investment will assure them $5,000 of income each year from age 65, plus they have the potential to collect a larger sum if their investments do well and thus have their income keep up with rising prices.
Not so fast.
James Daw at the Toronto Star dug a little deeper, crunched some numbers and it's not quite so clear cut:
The 5 per cent bonuses that guarantee a steady increase in the base used to calculate the minimum income withdrawals are less than meets the eye.
Bonuses are based on your guaranteed capital – the original amount invested or any increase due to periodic resets – and ignore increases due to earlier bonuses. So, this is equivalent to a lesser percentage of compound interest than 5 per cent.
"Some agents are saying to people at 50, here is what you need to put in to guarantee a certain income at 65," says Pereira.
"It sounds wise, but at the same time, over 15 years you are looking at a potential of two market cycles, in which case you are taking a one percentage point hit a year. You have the potential over 15 years to at least double, if not triple the asset base."....
"I think the product is wonderful, that it was necessary in Canada and that it is going to be around for a long time, if not become one of the most dominant areas in the industry," says Pereira.
"However, I do believe there are a lot of pitfalls due to the complexity of this product that a lot of advisers are going to burn themselves on due to misunderstanding with the client, because I don't think a lot of advisers understand what is going on with this thing."
Regardless of the extra cost, the experience with the stock markets this year may drive more clients to look for guarantees so they can sleep at night, he says.
I think Daw may be underestimating the value of peace of mind.
Guarantee Minimum Withdraw Plans (GMWP) can also be a great fit for people who want to invest in stock market but are looking for ways to minimize their risk. But Daw is quite right - these guarantees do come at a price as many of the funds have significantly higher Management Expense Ratios (MERs).
Whether a guaranteed policy fits an individual - and which guaranteed policy fits - is something which needs to be evaluated on an individual basis. It's also a question of optimism and pessimism. If you think the market is going to do nothing but go up from here, there's no point in taking a guaranteed policy.
If you think there might be ongoing long term turmoil in the economy then a guaranteed return policy is the safest place to keep your money.
Assumption Life has one of the only non medical critical illness products on the Canadian insurance market. Applicants can qualify for coverage in 24 hours by answering “No” to five health related questions. There are no questions related to family health history. Applicants who have been declined or rated in the last two years will not be eligible – so applying to Assumption Life gives the insured a safety net if he/she is not approved elsewhere.
The coverage is available to policyholders aged 18 to 60 and is guaranteed renewable to age 75. The coverage increments are $10,000, $20,000 and $30,000 and are available on a single life or multi life basis.
The policy pays out a lump sum if the insured is diagnosed with any of the following five illnesses: cancer, stroke, heart attack, kidney failure or vital organ transplant. There are exclusions on the policy such as pre-malignant lesions, benign tumours or polyps. Sample policy documents are available for a full list of policy features and exclusions. Another terrific feature is the return of premium option on maturity. If the insured stays healthy until age 75, and a claim is not made, all premiums are returned.
The face amounts are smaller but the premiums are affordable. A 35-year-old male non- smoker applying for $30,000 of coverage will pay $30.40 a month. If the insured chooses to add the return of premium on maturity, the monthly premium is $37.09.
When the Insurance Journal talked to insurance experts on the recent concerns about AIG Life of Canada, Lorne S. Marr was among those interviewed by the magazine.
Read the whole Insurance Journal article and find out what Lorne had to say about AIG Life Insurance and why the existing clients with current AIG policies should not switch.
It was great working with Jee-Yun Lee. The topic of the show was "What You Need To Know When Getting Life Insurance". Jee-Yun Lee figured out the essentials of life insurance very quickly. Jee-Yun Lee's conclusion: "Life insurance can be great if you get a policy which works for you."
RBC Insurance has introduced an easier way to get both Term and Critical Illness insurance.
The company is now offering both solutions simultaneously as they have bundled the RBC Insurance Critical Illness Recovery Plan policy with Term 10 or Term 20.
Bundling Benefits:
Savings for the client
Two sales in one
Easier process: One application
One underwriter for both apps simplifies the process
Lorne's Comments:
This is nice enhancement to the RBC Insurance product line. Only one policy fee for both products is a great benefit. The $40 Term Life policy fee is permanently waived – this adds up to $800 savings over a 20-year period. On the top of this, two separate policies are issued so the applicant saves the policy fee down the road even if he/she cancels or makes a claim on the Critical Illness portion.
It should be noted that several other insurance companies also offer bundled Term and Critical Illness, including Empire Life, AIG and AXA Assurance.
Assumption Life has made a big splash in the guaranteed issue life insurance market. Guaranteed issue life insurance is a policy which is geared towards individuals who are not in optimal health but have a need for life insurance.
These policies are issued without a medical test and with limited proof of insurability. Most guaranteed issue plans limit the death benefit in the first two policy years but Assumption Life’s Golden Protection and Golden Protection Plus pay out from day one.
Four Day Work Week photo
Lorne with Jack in background
Our campaign for the 4 day work week turned up in the Globe and Mail last week as full page article in the business section. We were honoured that they chose Jack and I as the lead photo.
We were also thrilled to see that other companies are moving to a four day work week as well. Our staff is more productive than ever. Unfortunately for the moment we are finding that the four day work week doesn't apply to company owners.
Writer Kira Vermond analysed the Monday to Thursday work week in her piece "How Green is your four-day work week?". Some key findings:
34% of workers prefer a condensed work week
four-day work weeks are more difficult in a service business (that's us)
many people work part of the extra day from home
people don't necessarily go car-free on their extra day off
We at LSM Insurance will always be here to help you five days a week though. If someone is taking off Friday, somebody else is taking off Monday.
The recent fluctuations of the stock markets having left many investors running for cover. The equity markets historically produce generous returns over the long haul but many investors are spooked by the potential of losing 25% or more of their capital in any given year. For investors looking for a risk free alternative, whole life insurance in Canada can provide an interesting option.
The advantages of Whole Life insurance as an investment are the following:
All premiums and death benefits are guaranteed. Non Participating Whole Life policies which do not participate in the insurance companies profits and do not receive dividends are lower in cost and are fully guaranteed. Participating Whole Life policies do participate and the insurance companies profits and do pay a dividend. The premiums on these policies are higher and the dividends are not guaranteed
All life insurance death benefits are guaranteed
In addition to the death benefit, whole life policies also have a guaranteed cash value and in the case of Participating Whole Life policies they have guaranteed cash value plus the cash value of any policy dividend. As stated above the dividend rates fluctuate with the insurance companies profits and interest rates. But the fluctuations are modest when compared with traditional equity investments.
The primary disadvantage of whole life insurance as an investment is that death benefit only pays out when the insured dies. If the funds are being used to pass on proceeds to a spouse or child this is inconsequential because the policy never expires so the beneficiaries are guaranteed to receive the proceeds tax free in the future. Generally 90% to 95% of the cash values on a whole life policy can be withdrawn in the form of a policy loan and it is deducted from the death benefit along with any loan interest when the insured passes away.
Below is an example of pricing for $250,000 of Whole Life – Payable to 65 coverage for a 33 year old female non smoker.
The annual premium is $1175 a year and the policy is paid up at 65. The policy has a cash value of $100,500 at age 65 and $141,000 at age 75. The policy owner maximum contribution up to age 65 is $37,600. It is difficult to calculate the policies internal rate of return because the exact date of death is an unknown variable. However what is guaranteed is a tax free death benefit payout of almost seven times the applicant’s initial deposit – this could be an even higher multiple if the insured dies before 65.
A new study released recently found that Canadians continue to place a high value on financial protection. Some 61 % of Canadian organizations offer group term life insurance to their employees. An additional 42 % of organizations offer disability benefits to attract and retain skilled workers.
Over 2,100 payroll professionals across the country participated in the research by completing an extensive online survey, compiled by the Canadian Payroll Association. The first of its kind in Canada, the survey ranks all 39 categories of taxable employee benefits in terms of the percentage of organizations offering them.
Life insurance companies have been front page news the last week. American International Group (AIG) one of the world's largest life insurance companies has had three quarters of staggering housing-related loses and it has lost over 90% of its stock price.
Many policyholders of AIG and other insurance companies are asking the questions how safe is my life insurance policy? It’s a reality of the 21st century that even the largest and most reputable insurance companies can become subject to financial failure. In Canada three insurance companies have gone bankrupt:
Les Coopérants on Jan 3rd 1992
Sovereign Life on January 18th 1993
Confederation Life on August 11th 1994
In each of these instances Assuris – which was founded 1990 and is not for profit organization that protects Canadian policyholders in the event that their life insurance company should fail – was called upon to deal with the insolvency. Through the three insolvencies, Assuris’ coverage has protected almost three million people representing over 10 % of Canadians.
Below is a summary of how Assuris protects Canadian policyholders if a member insurance company becomes insolvent. You can find out if your insurance company is a member company if you visit the website of Assuris.
• Life Insurance death benefits up to $200,000 or 85% of the promised Death Benefit,
• Life Insurance cash values up to $60,000 or 85% of the Cash Value, whichever is higher.
• Critical Illness benefits up to $60,000 or 85% of the promised benefits, whichever is higher
• Disability Insurance benefits up to $2,000 per month or 85% of the promised Monthly Income benefit, whichever is higher.
• Long Term Care benefits up to $2,000 per month or 85% of the promised Monthly Income benefit, whichever is higher
One strategy to minimize risk of an insurance company bankruptcy is to take out policies with multiple insurance companies i.e. rather than an applicant taking out one $400,000 policy, he/she could take out two separate $200,000 policies. The policies have to be with separate insurance companies or Assuris will treat it as one policy. This strategy does have a downside you will be paying multiple policy fees and many insurance companies give volume discounts – the higher the coverage amount the lower the cost per thousand.
Find out in a 2-hour presentation given by five time number one Canadian life insurance broker Lorne S. Marr on Wednesday, October 8th in Toronto.
Lorne’s seminar will only be offered once this fall. Capacity is limited to the first twenty registrants, so register today and don’t miss the once in a lifetime chance to get the inside scoop on how to make six figures and more in the life insurance business for free.
Passion, empathy, ambitious, organization and good listening skills are just a few of the seemingly contradictory traits a top broker needs. Lorne will talk about all of the attributes during his seminar.
To participate in this unique event, simply fill out our registration form.
Following the potential bankruptcy rumours swirling around AIG, Lorne S. Marr was interviewed by the Toronto Sun. Lorne was talking about Assuris, as he put it, a "safety net" for the insured.
Here is a short excerpt form of the article:
"Broker Lorne Marr, president of Lorne S. Marr Insurance in Markham, said he's been flooded by e-mails and phone calls from clients and he's tried to ease their worries. Bottom line, he points out, is the insurance industry has a safety net, called Assuris, which is similar to the Canada Deposit Insurance Corp. (CDIC) that guarantees up to $100,000 in deposits in individual banks."
American International Group (AIG) has been front page news the last few days. The company has had three quarters of staggering housing-related loses and it has lost 90% of its stock price.
The questions many AIG Life of Canada policyholders are asking – how safe is my life insurance policy?
Comments from AIG Canada’s President Peter C McCarthy on Sept 15th reassured its broker network that the company is on solid financial footing. “AIG Life of Canada remains a strong, secure, well capitalized business. It is a separate legal entity that operates only in Canada and has not been affected by the U.S credit crisis,” he said.
The following are five additional reasons why you should stick with AIG:
New coverage will be based on your new age and your current health status. A new policy will also be subject to a new incontestability and suicide provisions
Cancelling your existing AIG life insurance policy may trigger a taxable gain. Many older AIG policies have valuable tax benefits. These benefits may not be available on new policies and cancelling your policy may increase your tax bill for the upcoming year.
Certain AIG policies carry surrender charges for cancelling the plan (this is not exclusive to AIG) these penalties can be in the thousands on certain Universal Life policies.
The office of the Superintendent of Financial Institutions of Canada (OFSI) regulates Canadian insurance companies for regulatory compliance and financial solvency. This includes ongoing financial reporting to OFSI and undergoing periodic financial examinations. OFSI regulates AIG Life of Canada
AIG is Member Company of Assuris. Assuris was founded in 1990 and is a not for profit organization that protects Canadian policyholders in the event that their life insurance company should fail. Assuris covers 100% of the death benefit on policies $200,000 or less. On policies over $200,000 they cover the greater of 85% of the original face amount or $200,000. Assuris also cover 100% of life insurance cash values up to $100,000.
If you do decide to replace your existing AIG policy, make sure the new agent/broker completes a life insurance disclosure form and has you sign it; this form is required by law and gives you a snapshot comparison of the your new proposed coverage and your existing plan. You have 20 days from the time you receive a copy of the disclosure form to withdraw the new application and receive a full refund of any premiums paid.
Effective September 15, Transamerica will offer more flexible limits and options for payment for both new and inforce insurance for their clients. From now on, they'll accept pre-printed personalized cheques from an authorized bank account, money orders up to $500, Counter Cheques for an amount up to $5,000, and pre-authorized debit plan.
Bank drafts will also be accepted for an amount up to $5,000.00 if the name of the remitter is pre-printed on the draft by the bank at the time of issue; and the font of the remitter’s name matches the font throughout the rest of the bank draft. Transamerica will also accept any dollar amount where both the remitter’s name and account number is pre-printed at time of issue; the font of the remitter’s name matches the font throughout the rest of the bank draft; and the draft is signed by a Bank Manager (or bank employee); or the draft is accompanied by a letter from the bank signed by a Bank Manager (or bank employee) verifying funds were purchased by the remitter from their bank account.
As for Counter Cheques, they'll be accepted for an amount up to $5,000.00 provided the account number is pre-printed and the signature on the cheque matches the owner/payer signature Transamerica has on file.
Pre-Authorized Debit (PAD) is the easiest and most convenient way for the clients to make premium payments. Quick to set up and simple to customize, PAD offers your clients flexibility in their payment plans and reduces the risk of an unintentional lapse in their policies from an accidentally missed payment due to a move, illness or travel. With no limitations or restrictions on dollar amount, using PAD to make premium payments is a great way to avoid payment related delays in the application process, Transamerica said in a press release.
Lorne's Comments:
It’s great to see an insurance company making a variety of payment options available for the consumer. Hopefully they will offer a credit card payment option in the future.
In times of mergers, absorbs and split-offs it’s not always easy to keep track of the top players in the life insurance industry. That's why we're bringing you the Top Ten List of World Insurance Companies. Among some other top lists we used Forbes Global 2000 special report as a source.
Our new section also contains details about each insurance company, together with their corporate history, number of clients and employees - everything that made them one of the Top 10 World Insurance Companies.
LifeAdvance T100 15-year pay plan – This new plan offers the same features and benefits as T100 LifeAdvance, but premiums are payable for only 15 years and then the policy is paid up for life.
New return of premium riders – More choices and simplified features. The ROP at withdrawal and ROP at withdrawal or expiry riders have been renamed. They’re now known as ROP15, ROP20 and ROP65. These riders have been streamlined for ease of use and to provide industry-leading flexibility.
Rate changes – All existing LifeAdvance plans have been re-priced to reflect enhancements and a competitive rate review.
Lorne's Comments:
The limited payment option is a terrific feature for clients who want Permanent Critical Illness insurance but do not want to pay into their retirement years. Canada Life is also joining several other carriers in an attempt to get standardized critical illness definitions. This is great news for the industry.
The insurance business is filled with opportunity. But this fact is tempered by the reality that over 80% of new brokers leave the industry within their first 12 months. Why is it so? What does it take for a new broker to succeed in insurance? Determine if you are ripe for success in this industry!
RBC Insurance will hold two client roundtables by their Life & Health Claims Department on September 24th and October 8th, 2008.
These events will involve small groups of clients who have had a recent claim with RBC Insurance. In a recent press release, RBC Insurance said that the information they receive directly from these clients will allow them "to better understand their perceptions, specifically with regards to their claims experience, provide us with valuable opportunities to improve on the many things that we are doing well and find ways to make our client experience even better than it already is."
Lorne's Comments:
It's great to see an insurance company investing in the improvement of the claim paying process. This is the backbone of what we do.
August 25th, 2008
Empire Life announced that effective August 25, 2008 they will significantly decrease the rates on their Optimax Participating Whole Life plan.
Transamerica Critical Advantage is a global medical care insurance providing immediate access to advice and the best care through Best Doctors.
If diagnosed with a covered medical condition, the client and their doctors or specialists have immediate access to Best Doctors, the world’s leading medical information resource. Best Doctors can provide clinical guidance and access to a second opinion to help arrive at the right treatment plan. This system draws on a global database of 50,000 peer-ranked doctors to arrange care with the world’s top experts and facilities for your client’s specific medical condition. $1 million in affordable global medical care $1,000,000 CDN in global medical expense coverage, in addition to a $10,000 CDN travel and accommodation allowance. This unprecedented coverage empowers clients to follow their desired path to healthcare, wherever it may take them on the globe.
Clients who choose treatment in Canada receive a single payment of $25,000 CDN and ongoing access to the advice and guidance of Best Doctors. A simple product that’s easy to apply for Fast and simple application form and no medical or paramedical examinations required, so policies can be issued on a same-day basis.
Critical Advantage covers the first occurrence of any one of the following 10 serious illnesses:
Cancer (life threatening)
Coronary artery by-pass surgery
Kidney failure
Major organ transplant – on waiting list
Aortic surgery
Heart valve replacement
Benign brain tumour
Multiple sclerosis
Motor neuron disease (ALS/Lou Gehrig’s)
Parkinson’s disease
Lorne’s Comments
This plan is unique to the industry in Canada. However, it should not be confused with traditional critical illness insurance. The $1,000,000 payout is limited to global medical treatment. Insureds who choose treatment in Canada will have the payout limited to $25,000 CDN. The plan is available without a medical but the premiums increase every five years and are not guaranteed.
According to the latest report by LIMRA International, Critical Illness insurance policy sales decreased by 3% between 2006 and 2007 from $84,983 to 82,397. For the industry premiums dropped from 78 million in 2006 to $77.2 million in 2007. These data were published in the August 2008 Insurance Journal.
Lorne's Comments:
The drop in sales can be largely attributed to many captive agents and brokers not properly understanding the product. Critical illness is a much more complicated form of insurance than life insurance. The underwriting is also much more stringent.
The AXA Group has introduced a new line of accumulife option funds that brings together investment managers with 12 investment options, offering funds that range from fixed income to maximum growth portfolios.
In a recent press release, AXA listed several advantages of these accumulife option Guaranteed Investment Funds. They include:
A wide range of possibilities offered through the funds and their diversification;
Very competitive management fees;
Guarantees and forms of protection not offered by mutual funds;
The international reputation and experience of fund managers: AllianceBernstein, AXA Rosenberg, Franklin Templeton and TD Asset Management.
Lorne’s Comments:
AXA’s Accumulife funds have competitive MERs when compared with other segregated funds on the market. Their fund line offers 12 funds in total; until now two of these were limited to institutional investors Global Equity and Canadian Equity, both offered by AXA Rosenberg.
Unity Life’s Plus Term is a non participating whole life policy available in Canada to applicants aged 18 to 45. The plan provides lifetime protection and is guaranteed paid up at age 65.
The policy has a guaranteed cash value available at age 65 and the cash value accumulates each year thereafter.
Below is an example of $250,000 coverage for a 41 year-old Female Non Smoker. Unity Life stacks up well against its Whole Life Paid Up at 65 competitors, especially in the cash value department.
Company
Monthly Premium
Contribution to age 65
Cash Value at 65
Manulife
$167.72
$48,303.42
$35,250
Unity Life
$184.73
$53,202.24
$100,500
Industrial Alliance
$186.75
$63,784.00
$37,850
• All three policies have a paid up death benefit at age 65.
The Manulife applicant saves about $4,900 over the 24 years but her cash value would be over $65,000 less at age 65. The Industrial Alliance plan has a higher premium and $62,650 less cash value at 65.
Unity Life’s Plus Term plan also has a unique Extended Insurance feature. In the event the policy owner is unable to pay premiums and the policy has been in force for 2 years, the insurance amount, less the outstanding loan and any interest due, will remain in force for one year from the date premiums was due. During this period the policy can be put back in force by paying the premium plus any interest. Policyholders can use this feature up to 3 times.
Additionally now that Unity Life has joined forces with The Foresters all policyholders are now Forester members and may be eligible for valuable complimentary member benefits such as postsecondary scholarships or a grant for a covered illness. These benefits may provide extra protection to help ensure new applicants and their families get the support they need through key life events.
In a recent press release, AXA Insurance announced that they were implementing a new teleunderwriting service for obtaining medical questionnaires:
Through BW Underwriting Services Inc., a teleunderwriter will be contacting your clients directly as needed to complete certain medical questionnaires. This third party will free you from repeated visits and from being accountable for information accuracy, and will improve the processing time overall, thus saving you precious time.
This new service is being launched gradually and will initially include the most common questionnaires requested, such as Arthritis, Diabetes, Epilepsy, Backache and Musculoskeletal Problems, Digestive System Disease, Nervous System and Respiratory Problems. Axa will eventually roll out all medical questionnaires that Underwriting needs to assess the risk.
Lorne's Comments:
AXA is on the cutting edge when it comes to underwriting. By gathering more accurate and detailed information, AXA will be able to limit the number of Attending Physician Statements (APS) they request. The APS is the primary delay in getting a life insurance application approved.
Another added benefit is this reduces the work load on the broker – as he/she is not responsible for gathering this information and because the calls are recorded AXA does not require a signature from the client.
We often hear that the a primary purpose of a life insurance policy is to replace the income of a family breadwinner in the event of his or her untimely demise. But what about families with minimal debt and full grown children? Why would they need or want life insurance? In our latest article we take a look at some benefits life insurance has for maximizing wealth.
RBC Insurance raised the limits on its future income option, effective July 30, 2008. The future income option allows disability insurance policyholders to increase their disability insurance monthly benefit without providing evidence of insurability. The increase applies to all occupation classes. New applicants qualifying for a 4A classification can now add a future income option of $25,000 per month, a significant increase from the previous ceiling of $15,000 per month.
Lorne’s comments: RBC Insurance’s future income option is a great way for professionals and those in other occupation categories to enhance their coverage without providing evidence of insurability.
To exercise this option, the applicant must still provide proof of income. This option would be a good fit, for example, for young interns in good health but making limited income. They can easily protect their current income while adding the future income option to protect their future earnings.
CBC News has again featured our four day work week initiative as a good example of how to combat high fuel costs. Now, Nova Scotia is looking at a four-day work week for government employees as a way to save energy, the online news service says.
Energy Minister Richard Hurlburt is reported to have said that his department is preparing a report on how how much the province would save in energy costs.
The article, among others, reads:
In Canada, some companies, such as LSM Insurance in Markham, Ont., have decided to offer employees a condensed work week to reduce commuting costs as gas prices soar.
Manulife’s children’s term rider, unique in the Canadian marketplace, just got even better. The rider allows a child to be covered for $10,000 at a cost of $2.50 a month. But even more important is the plan’s built-in conversion option.
On the policy anniversary nearest the insured’s 25th birthday (or earlier, at specified option dates), the insured child has the option to purchase $250,000 of new life insurance coverage without new medical evidence. That on its own is unique in the industry. Manulife goes even further, allowing $100,000 of that coverage to be critical illness insurance.
There are two caveats: 1) the total life and critical illness coverage is still limited to $250,000 and 2) to exercise the critical conversion option, Manulife must confirm that the insured does not immediately qualify for a claim. The insured can also not have more than $1.9 million of critical illness coverage in force. Manulife’s maximum retention limit is $2 million.
The private insurance dam has sprung another small leak with a new insurance product covering “medical administration costs”, Canada Free Press reported.
The website writes about a family doctor selling his own private insurance product.
The article recalls that Ontarians can purchase insurance to cover their doctor’s notes stating that they are too ill to attend work because they are waiting on a list to get treatment.
The doctor selling his own insurance product lists 23 administrative services for which he charges fees. These range from $11.72 for telephone prescription to $150 for the filling out of forms for a physical required for a driver’s license.
Long-term care insurance is used to help the insured cover the cost of care when they are no longer able to care for themselves and become functionally dependent. The cost of care can be significant. We've put together a table with typical home services and their costs in Ontario. In our latest insurance tips article you can also read Lorne's comments on costs of long-term care.
Manulife term products have a value-added option known as combined coverage.
Combined coverage offers two death benefits under a single policy, resulting in one policy fee and a 3% discount – terrific savings. In fact, Manulife combined life coverage often costs less than its competitors’ joint first-to-die plans.
If one of the insureds dies under a joint first-to-die policy, the surviving insured would have to apply for new coverage. At his or her attained age, this would translate into a higher premium. Under a combined plan, however, the surviving spouse automatically continues the coverage according to his or her original age at the time of last renewal.
The one caveat: the life face amounts for both insureds must be identical under a combined coverage plan.
Below is a cost comparison for Manulife combined coverage versus some of its competitors’ joint first-to-die plans. Assume $500,000 each of term-10 coverage for a 45-year-old male non-smoker and a 42-year-old female non-smoker (rates as of July 21, 2008).
Manulife combined coverage: $86.43 a month
RBC Insurance joint first-to-die coverage: $81.00 a month
Industrial Alliance joint first-to-die coverage: $88.20 a month
Desjardins joint first-to die coverage: $89.55 month
An exciting day. I woke up to see our 4 day work week on the front page of the city newspaper, The Markham Economist and Sun, with my picture.
It looks like my cover as a normal Markham family guy has been blown. Next thing you know I'll be stopped for impromptu insurance sessions in the local grocer's produce section.
The Markham Economist & Sun got the focus of the 4 day work week absolutely right: the tremendous benefits to employees:
Mr. Marr believes a shorter work week reduces fuel costs, increases family time and improves employee morale.
"In some way, they work more during the four days, since they're being more productive," Mr. Marr said. "Our company is based on salary and bonus pay, so they can actually make more money off the bonus pay by being more focused and working harder."
Mr. Marr came up with the idea because of skyrocketing gas prices.
"The employees choose which day they'd like off, which is usually Friday," Mr. Marr said. "As long as they get their work done, it doesn't matter to me which day they take off.
"I think more companies, sooner or later, will start doing this," he said. "The bigger companies, like IBM, can't do it as easily since they can't really think outside the box. They have more channels to go through, more people to consult with to make a decision like this."
Globe and Mail - Fuel Costs drive
Canadians to park their Cars
Canada's national newspaper, Globe and Mail brings a lengthy report on how companies are combating soaring gas prices. The paper interviewed our Senior Insurance Consultant, Jack Bendahan on his view of our decision to move to a four day work week.
Here's an excerpt from the article:
Life insurance broker Jack Bendahan, for example, has switched to a four-day work week and now parks his Mitsubishi Eclipse convertible at home on Fridays — saving roughly $250 a month on gas.
"There's a lot of driving in this business. I'm all over the place," said Mr. Bendahan, who also co-ordinates his appointments and plans his routes more carefully now to avoid excessive mileage. He has eased up on the gas pedal, as well.
His company, LSM Insurance of Markham, Ont., had given employees the option of compressing their work into a four-day schedule a year ago, "but I only got on board on that three months ago."
Mr. Bendahan is trying to sell his car, which takes premium gas, and is thinking about purchasing a more fuel-efficient Toyota Yaris.
CBC Radio has featured our 4 day work week as a great example of how to combat high fuel costs and save money.
Listen to the whole story!
People in Toronto work long hours and long days. In the face of ever higher gas prices and unstable financial markets, many people are working more days and even longer hours.
Here at LSM Insurance, we have moved to four-day work weeks to combat high gas prices. All the team members welcomed the initiative, saving hundreds of dollars a month in gas costs. CBC Radio has aired our story and we also let the major Canadian newspapers know about our endeavour.
We have been featured for our efforts to help employees reduce commuting, save on fuel costs, reduce pollution and enjoy life more: we have instituted a voluntary 4 day work week. And our staff love it.
CBC radio also produced a story about our four day work week in July. Listen in by pressing the play button below.
Be wary about viaticals, the Toronto Star suggests. In a recent article they write about a Toronto company promoting investments with unusually high returns and tax-free advantages. "Company websites suggest one type of investment would pay an 8 per cent annual dividend, plus an average capital growth of 15 to 20 per cent. Another would pay a higher annual return, as well as a tax-free component of 10.2 per cent. The minimum investment is $10,000," the paper reports.
The investments offered by the New Life Capital Corp. are to life insurance policies of elderly Americans, who sign over their death benefits in return for discounted cash settlements.
Canadians should know the viatical or life settlements industry in the United States has been dogged by controversy, corporate failures, criminality and investor losses. So it is worth reading the entire article, to be found here.
As reported in the June/July 2008 issue of Insurance Journal, ACE Life is offering a new feature to help insured employees navigate their way through cancer treatments. On April 23, 2008 ACE Life announced it had added CAREpath as an option for its Spectrum group critical illness plan. The service assigns those who have been diagnosed with cancer a personal oncology nurse who can answer questions and provide advice before, during, and after treatment.
ACE Life said the plan will be available to groups of 100 or more employees.
Lorne’s Comments:
This product is well positioned to make inroads into the Canadian group insurance market. In the face of constant advances in medical technology and treatments, cancer patients may have a host of questions and concerns. This option helps give patients a sense of control. The cost, assuming 15% commission, is 84 cents per employee per month for groups ranging of 100 to 499 employees and 44 cents per employee for groups of over 500 employees. Hopefully, ACE and other carriers will extend the service to smaller groups.
According to the Canadian Cancer Society, 3,200 Canadians are diagnosed with cancer every week. There will be more than 166,000 new cases in Canada this year with over 73,000 people dying of their disease. These stats are quoted by the Toronto Sun, in a recent article written by Terri Williams.
She maintains that we all know that there is nothing more certain in life than death and taxes. "Life insurance can protect your family from the financial impact of your untimely death, but what happens if you develop a critical illness and you survive? Life insurance is paid on death, not illness," she writes.
I suggest that you read the entire article, it's very informative. You can also visit one of my pages with tips on critical illness insurance.
Desjardins Financial Security's National Health Survey results show that more entrepreneurs should turn off their blackberries and make relaxation a priority this summer for the sake of their physical and mental health.
Entrepreneurs who participated in the survey were asked to rate their current level of financial security, mental and physical health, and their stress level compared to the previous year. Close to 92 per cent said they were financially sound and 77 per cent were in very good physical and mental health. However, when asked to comment on their stress level, 31 per cent said their stress had increased.
For Barb Sawyers, a single mom of two who has run a communication business for more than 15 years, juggling family and client demands are the key sources of her daily stress. "July and December used to be slow months, but not any more. In an electronically-connected, 24/7 world, there are no breaks," Sawyers said.
Standard Life Mutual Funds Ltd., an affiliate of The Standard Life Assurance Company of Canada, announced the launch of the Standard Life India Equity Focus Fund, one of the first funds in Canada to capitalize on opportunities in India's fast growing economy. This fund is part of a wider launch, which also includes a T-Series for ten Standard Life existing funds, as well as the two new Portrait Portfolio fund-of-funds - Dividend Growth & Income Funds and Global Portfolio.
"I believe the new Standard Life funds further address four key concerns expressed by investors; namely diversification, risk management, income-producing solutions and tax efficiency," said Denis Berthiaume, Senior Vice-President, Retail Markets of Standard Life."The launch of these new funds complements Standard Life's ability to provide advisors with an integrated range of products to help them meet the retirement planning needs of their clients.
Grow, Protect, Live and Transfer assets - these are the ultimate objectives of our suite of wealth management products to ensure a better retirement for clients," continued Mr. Berthiaume.
Equitable Life has reprised their 10- and 20-year renewable and convertible term plans to be more competitive in their target markets. They have also discontinued their term conversion credit program. Equitable Life will continue to honour conversion credits for previously issued policies.
Lorne’s comments
Equitable Life has lowered their already competitive rates for most age groups.
Their term plans are also renewable and convertible, up to age 71, to permanent plans without a medical. Preferred rates are available for coverage of $250,000 and up.
On the downside, Equitable Life has discontinued their term conversion credit program on all new term policies. This feature gave a credit to all term policies converted to a permanent policy (i.e., a level rate plan) of up to 25% of the last 12 months of premiums.
Industrial Alliance (IA) has obtained all regulatory authority approvals for the acquisition of National Financial Corporation, the parent company of AEGON Dealer Services Canada Inc., Money Concepts Limited and National Financial Insurance Agency Inc, the company announced in a press release.
This transaction strengthens IA's position as a leader in the distribution of mutual funds in Canada by expanding its diversified network of independent financial advisors. IA's two mutual fund dealerships, Investia Financial Services Inc., and FundEX Investments Inc., have over $17 billion in mutual fund assets under administration and over 2,500 financial advisors, making IA one of the five largest non-bank owned mutual fund dealerships in Canada.
Effective July 7, 2008, the Vital Link Basic plan (three illnesses) will no longer be for sale and the name “Vital Link Plus” will become simply “Vital Link.” The Vital Link definitions for 22 of the 23 insured conditions will reflect new industry benchmark definitions.
Lorne’s comments
This is a good news–bad news scenario. Empire Life’s Vital Link Basic was a stripped-down critical illness plan for cost-conscious consumers. It provided a workable alternative for applicants on tight budgets.
The good news is that Empire Life’s Vital Link Critical Illness plan is still well priced and has a host of built-in features. It is also great to see Empire Life participating in the insurance industry’s push for standardized definitions.
Manulife Securities is the new trade name for a group of companies consisting of a mutual fund dealer, investment dealer and insurance agency operating across Canada, following Manulife’s purchase of Berkshire-TWC Financial Group Inc. “We are operating as a strong national firm that offers new opportunities for independent advisors serving their clients across Canada, committed to delivering the same high-quality service we provided in the past,” explained Manulife Securities’ President Rick Annaert in a press release.
“Manulife Securities is one of Canada’s pre-eminent financial organizations serving more than 1,500 investment professionals, with the backing of Manulife’s overall strength and expertise,” he added. “We have a new look and are focused on leveraging the strengthened market and financial position of the combined companies.”
Independent advisors continue to be the backbone of both Manulife and Berkshire, and that complementary culture has helped to complete a very smooth integration, Mr. Annaert explained. “Manulife and Berkshire both bring a great deal of value to the transaction, including the financial strength, resources and track record to execute the best possible integration. The whole is truly greater than the sum of its parts.”
The Canadian Life and Health Insurance Association (CLHIA) welcomes the Competition Policy Review Panel's report, Compete to Win. "The life and health insurance industry is pleased that the report recognizes that it is vital for Canada to enhance its competitiveness both domestically and internationally," said Frank Swedlove, President of the CLHIA in a press release.
The industry was particularly pleased with the Panel's recommendations for;
The continued reduction in capital, corporate and personal income taxes, as well as ensuring that Canadian companies operate on an equal footing abroad
The federal government providing leadership and working with the provinces in the elimination of all internal trade barriers
The implementation of measures to ensure that Canadian companies have access to a skilled workforce
These recommendations are consistent with those made by the life and health insurance industry in its response to the Competition Policy Review Panel's Consultation Paper, Sharpening Canada's Competitive Edge, the press release concludes.
The Standard Life Assurance Company of Canada introduced a new website to allow group savings and retirement plan members to take ownership of their plans. Offering a so-called "retirement dashboard", the site provides members with an overview of their planning activities, their contributions, account balances, asset allocations and projected retirement assets, every time they log on to the website.
"The new VIP Room for plan members, in my, and our clients' opinions, should position Standard Life very favourably in the market," said Anthony Cardone, Senior Vice-President, Group Savings and Retirement of Standard Life in a press release.
"We have leveraged Standard Life's expertise in group savings and retirement that we have developed over the years and used the latest technology to meet needs that our clients and benefit consultants have expressed. We have not simply updated the existing site; we have created a whole new way for members to manage their retirement assets. And this is only the beginning. We will be introducing new features regularly in the months ahead."
Standard Life's VIP Room is designed to motivate and involve plan members in the retirement planning process and to keep them coming back. It is interactive, flexible and user-friendly.
A recent StatsCan study found that businesses with under 100 employees added 185,000 jobs to the economy in 2006. These jobs were split evenly between businesses with 20 to 99 employees and those with under 20 employees. This growing number of small-to-mid-size businesses represents an expanding group insurance market and a tremendous opportunity for Canadian insurance brokers.
That is why I have written an article about five reasons why a new or experienced advisor may want to consider specializing in the group insurance market.
Do you know why you should watch out for captive agents? Are you aware that the cheapest life insurance plan isn’t always the best? Do you know why you should avoid accidental death insurance and be aware of policy exclusions? We've put together a list of seven life insurance sins you have to know of before signing a contract.
Through its Halifax Community Board, Manulife Financial will donate $10,000 to the Canadian Red Cross disaster management program in response to recent major forest fires near Porter’s Lake and Tantallon, Nova Scotia.
“Red Cross volunteers directly assisted hundreds of people and spoke in person or by phone with more than 3,000 evacuees to ensure they were safe and that any special needs were met,” said Gerard Ferguson, chair of Manulife’s Halifax Community Board. “The Red Cross needs our help to maintain its ability to provide immediate support for these types of disasters.”
More than 50 Canadian Red Cross volunteers worked around-the-clock for several days. They provided dozens of evacuees with emergency shelter and ensured that hundreds more had free access to meals; water, childcare and pet care, and helped arrange emergency replacement of prescription medicines. They reunited people who had lost touch with family members due to the suddenness of the evacuations. The Red Cross identified for emergency officials which residents needed help retrieving pets, and they coordinated information meetings with authorities to keep residents fully informed throughout the evacuation.
"This is what our volunteers are highly trained and equipped to do, but it does cost money and the Red Cross gratefully acknowledges this support from Manulife Financial, said John Byrne, General Manager of the Canadian Red Cross in Atlantic Canada. "Donations like this will also allow us to address the longer-term disaster management needs of the Atlantic region."
The Canadian Life and Health Insurance Association (CLHIA) applauds the House of Commons Standing Committee on Industry, Science and Technology on its report on Canada's service sector, The Goods on Services. "The life and health insurance industry strongly supports the recommendations of the Committee. They have recognized the vital role that the services industry plays in the health and prosperity of our economy," said Frank Swedlove, President of the CLHIA in a press release.
The services sector now accounts for almost 70 per cent of Canada's GDP. Further, the financial services sector is responsible for a major portion of Canada's direct investment abroad. "The government should seriously consider how they should respond to these excellent recommendations," added Mr. Swedlove.
The industry was particularly pleased with the recommendations that the Government of Canada:
Continue to improve Statistic Canada's collection and dissemination of data on the services sector;
Develop a services sector innovation strategy;
Ensure that staff in foreign missions have the expertise, knowledge and resources to promote the services sector;
Seek further favourable and comprehensive bilateral and multilateral trade agreements that would include services sector obligations;
Work with the provinces and professional organizations to streamline the entry of foreign workers into the labour force, particularly as it relates to the recognition of foreign credentials; and
Take a leadership role in encouraging the provinces to bring down inter-provincial trade, investment and labour mobility barriers.
AIG Life Canada has recently made the following five changes to its life and critical illness product line-up as of June 2008:
Changes to Yearly Renewable Term (YRT) plans on their Universal Life Dimension series
New lowered Preferred Term 10 and Term 20 rates
A new Business Guaranteed Insurability Option for business clients
New T100 Rider on all Life Dimension plans
A new 15 Pay Living Benefit 100 (CI) plan plus bench mark definitions on all CI plans
Lorne’s Analysis
These are all consumer friendly changes. The YRT COI insurance options allows clients to maximize the cash accumulation during the early years of the Universal Life plan.
Lower Term 10 and Term 20 rates make an already attractively priced Term line-up even more competitive.
The business guaranteed insurability option allows business owners to protect their insurability while their business grows.
Term 100 Riders lower the cost of adding Term 100 coverage to their Universal Life policies.
AIG is now one of the company’s in Canada to offer a 15 pay feature on their critical illness policies.
Tim Cestnick, a well-known author and tax commentator has written a very informative article for the Globe and Mail on “cascading life insurance.” He explains that buying life insurance on the life of your children can actually make sense. As he points out, this strategy takes advantage of the fact that you can invest money inside a universal life insurance policy on a tax-sheltered basis. The death benefit, he continues, along with the accumulated investments in the policy, are all paid out tax-free to the beneficiaries when the insured dies.
I encourage you to read this excellent article and learn how to transfer assets to the next generation without giving up control during your lifetime, and eliminate current taxes in your hands on the money deposited into the policy. You can find the whole article here.
The stigma around schizophrenia is one of the reasons Canadians don't want to talk about it. "Let's Talk About It", a provincial campaign organized by Schizophrenia Digest, will hold the fifth and final in a series of province-wide community public forums in Toronto on June 10th at the Centre for Addiction and Mental Health Centre.
According to a Toronto based poll, 92 per cent of respondents agree the cost of medications prescribed to someone with schizophrenia should be covered by provincial health insurance plans. In Toronto, 60 per cent of residents surveyed are willing to pay an extra $1 in taxes every year to ensure better treatment for people with schizophrenia.
Over 4,000 participants are expected to attend the 26th edition of Step Up for the Children with Standard Life, to be held on Saturday, June 14 on Ile Sainte-Hélène at Parc Jean-Drapeau in Montreal. The event will begin at 8:30 a.m. with the 10-km race, followed by the 5-km family walk at 10 a.m.
Event ambassador and Montreal Canadiens defenceman Francis Bouillon and child spokesperson Valérie Bernier will open the walk. It will also be a fun celebration for children, with inflatable games, entertainment and free food for everyone.
"I encourage families to come out and participate. This year, the objective of the Step Up for the Children with Standard Life campaign is to raise over $400,000 in support of the Foundation of Stars. People can register online until Thursday, June 12 or on site on the day of the event," explains Francis Bouillon.
Unity Life has been selling insurance in Canada for over 100 years, and although they advertise less than some of their competitors they have one of the strongest term insurance lineups in the Canadian marketplace.
They are one of the only companies to offer 5, 10, 15, 20, 25 and 30-year terms. And unlike most companies, their entire term lineup is competitively priced.
Unity Life’s Term plans come in face amounts of $50,000 to $5,000,000 and are available on a single life or joint first-to-die basis.
The applicant can also add a children’s term rider, accidental death benefit, waiver of premium and indexing option. The indexing option increases the face amount and premium by 5% per year, up to 150% of the original face amount.
Unity Life also offers an E-Z Term 10 application which is available without a medical and with simplified underwriting.
Below are examples of Unity Life Term 10 rates at $250,000 of coverage:
Insured..............Standard Rates.......Preferred Rates
35-yr male N/S:....$19.58/month…........$15.30/month
45-yr male N/S:....$33.53/month…........$26.78/month
55-yr male N/S:....$75.38/month…........$57.83/month
On April 3, Foresters and Unity Life of Canada announced completion of the agreement under which Unity Life becomes a wholly owned subsidiary of Foresters.
This will strengthen the company’s position in the Canadian marketplace. Unity Life has a great Term Life insurance lineup and the Foresters has an innovative Universal Plan. New policyholders will also now be eligible for the following free Foresters member benefits.
Critical Illness member benefit – policyholders are eligible to receive up to $4,000 financial grant in the event of a critical illness
Terminal Illness member benefit – if the insured is diagnosed with a terminal illness they can receive an interest free loan up to 75% of the face amount in the event of a terminal illness
Young Family member benefit- if a child loses one or both parents they may be eligible for a scholarship up to $6000 a year for a maximum of 4 years
(Effective January 1, 2012, Standard Life will no longer sell individual life insurance and critical illness policies).
In a recent press release, the Standard Life Assurance Company of Canada announced the addition of a Whole Life insurance product to its portfolio. This plan offers premiums and values that remain unchanged for the duration of the contract.
It is targeted to individuals approaching retirement and looking for tax-efficient ways to maximize wealth transfer between generations.It can also fit the needs of younger individuals looking to ensure that their families are financially protected.
Furthermore, it provides an alternative to existing Standard Life term insurance policyholders who want to convert their temporary insurance to a permanent form of life insurance coverage. Standard Life's Whole Life product is available immediately through independent financial advisors across Canada.
Cigar aficionados beware! Indulging in the occasional stogie could cost you more than the $150 you paid for that box of Cuba Caimans. Most, but not all, life insurers still let you have the occasional large cigar – usually one a month.
The Canadian employment landscape is changing. Most people no longer work for large corporations or the government. More Canadians either work on contract or are in business for themselves. They must decide what type of health and dental coverage is best. Let's have a look at advantages and disadvantages of both individual coverage and group plans!
Individual coverage is all that is available to one-person operations. Such insurance does have some advantages. The insured has some individual flexibility in the type of coverage sought. Coverage ranges from basic protection to more enhanced plans with higher drug maximums over $5000 a year. On the downside, premiums and renewals are based on an insurer’s experience with the pool of individual clients, so the rates cannot be negotiated. As well, most individual plans must be fully underwritten and include exclusions for pre-existing conditions, such as high blood pressure.
Group Plans pool the rates for all employees of a particular company into a single plan. These plans are available for groups as small as two people. Group plans offer the following advantages:
No exclusions for pre-existing conditions
One family rate is charged. Individual coverage penalizes large families, as each family member is charged a premium. Someone with five children pays a premium for each child. Under a group plan there is one family rate, no matter the number of family members.
Group critical illness is often available without a medical for larger groups.
Higher limits on drug and dental claims. Individual plans often limit the amount of dental coverage in the first year.
Group premiums are tax deductible for a corporation. Individual plan premiums, however, are not deductible according to federal tax guidelines.
More selection. Few insurance companies offer individual coverage, while significantly more offer group plans. More competition generally means more competitive rates.
Group renewal rates are negotiable, while individual renewals are pooled and non-negotiable. Your ability to negotiate an unjustified rate increase generally means lower overall premiums.
Great-West Life has four disability plans. Their Professional plan is high-end disability insurance geared toward professionals, business owners and key employees. The Boss Plus plan targets business owners who are concerned about cash flow if they become disabled. The Protector plan targets employees, and the Competitor plan offers low-cost disability coverage for people whose occupations or current work situations make it challenging to obtain coverage, such as part-time or seasonal workers.
Great-West’s Professional plan is their flagship program, and competes with RBC Insurance’s Professional Series and Canada Life’s Lifestyle Protection plan in the high-end market. The Professional plan has the following standard policy features:
Recurrent disability – the insured’s monthly income benefit will resume immediately if the same (or related) disability recurs within a specified period.
Waiver of premium – if the insured has been disabled for 90 days, Great-West will refund the premiums paid for this period, and waive the premiums while the disability continues.
Cash flow – the insured can qualify for a two-month extension of benefits when he/she returns to work full-time in the same occupation as prior to the disability.
Rehabilitation program – Great-West will cover the cost of a pre-approved vocational program, and the insured will still receive his/her monthly benefit while totally disabled. This feature can assist the insured learn a new occupation.
Transplant surgery – if the insured donates an organ, he/she will be covered during the recovery, if the policy has been in force for six months.
Survivorship – the insured’s estate will receive a lump-sum benefit if they die while receiving their monthly disability income.
The following optional riders are also available on the Professional plan: return of premium rider; limited first day accident rider; cost of living adjuster rider; future earnings protector option rider; future savings protector rider; lifetime accident and graded sickness benefit rider; accidental death and dismemberment rider; and a health care rider.
More than 1,200 cyclists and walkers are limbered up and ready to boost Kitchener-Waterloo's heart health this weekend as they take to the streets and paths to raise $200,000 for St. Mary's Regional Cardiac Care Centre. Sponsored by Manulife Financial since 1993, this year's Bike and Hike takes place Sunday, June 1. To date, the Bike and Hike has raised more than $2.5 million for regional heart health, with $1.4 million directly benefiting St. Mary's Cardiac Care Centre.
Dr. Marla Shapiro, author, columnist and CTV's Canada AM Medical Contributor is Honorary Chair of the 2008 Manulife Bike and Hike for Heart. "Manulife is pleased Dr. Shapiro has agreed to be the event's Honorary Chair because she knows the positive impact healthy and active lifestyles have on our lives," said Paul Rooney, President and CEO Manulife Canada. "We are also very proud of our volunteers and participants for helping us raise more than $2.5 million dollars for local heart health."
Moira Taylor, president of St. Mary's General Hospital, added: "We're very appreciative for the community's ongoing support of the Manulife Bike and Hike. It's important to our continued success in providing the best cardiac care to our patients. Thanks to the efforts of the event's participants and
sponsors, we were able to accommodate more than 40,000 visits to our Regional Cardiac Care Centre last year and look forward to continuing to deliver the excellent care our patients deserve."
Starting at RIM Park, this year's Bike and Hike includes 15- and 25-kilometre courses for all ranges of cycling skills. Walkers can follow a three-, five-, or eight-kilometre trail in RIM Park. Cyclists will start at 9 a.m., while walkers start to stroll at approximately 9:20 a.m. Post-event celebrations, including lunch, will continue until closing ceremonies start around 10:45 a.m.
The Manulife Bike and Hike for Heart (originally known as The Manulife Ride for Heart) has grown and benefited from community-wide support from a diverse group of individuals and companies. For 16 years walkers, cyclists, supporters and volunteers have given their time, energy and donations to help ensure quality heart care is available in Kitchener-Waterloo.
Canada Life Assurance Company, one of Canada’s oldest and most reputable life insurance companies, has a very well-priced traditional term 10 and term 20 plans. The plans are renewable and convertible to any of their permanent policies. Both plans have a $100,000 minimum face amount; the Term 10 plan is available to applicants aged 18 to 75, while the Term 20 plan is available to applicants aged 18 to 65.
Canada Life offers preferred rates for those who qualify on amounts over $250,000, on both smoker and non-smoker policies. The plans also have the following riders/benefits available as add-ons: accidental death benefit, guaranteed issue rider, waiver of premium rider, limited waiver of premium rider, and children’s life insurance rider. The children’s life insurance rider is available in multiples of $2,500, up to $25,000. It covers all children—natural, adopted or step-children of the insured—up to the age 25; they can then convert up to five times their coverage without a medical to a permanent plan.
On the downside, the $100,000 minimum face amount makes it problematic for older applicants on a tight budget to cover a temporary insurance need, such as a mortgage or business loan.
Below are examples of Canada Life’s Term 10 rates at $250,000 of coverage:
Insured..............Standard Rates.......Preferred Rates
35-yr male N/S:...$18.00/month….........$13.73/month
45-yr male N/S:...$31.95/month….........$25.20/month
55-yr male N/S:...$73.80/month….........$56.70/month
The group benefit marketplace in Canada is very sophisticated and highly competitive. The following summarizes some of the differences between group carriers in Canada. This is just a partial list; when analyzing your company’s group insurance needs, we would provide a complete analysis.
Great West Life has excellent infrastructure for processing life insurance claims on-line. This saves our clients time and money. Our brokers find, however, that they are not particularly flexible on renewals.
TheDesjardins head office allows direct communication with brokers, facilitating faster, more efficient communication for our clients. Their renewal formula, however, is complicated and cumbersome to explain.
Manulife is very flexible in the small group market. A husband and wife working together in the same business can get a traditional group plan with no underwriting. Head office will not speak directly to brokers, though, who must deal with the divisional office. This slows our response time.
Encon offers a large non-evidence maximum on life insurance for groups of three and up. This can be a huge benefit for a small group with an uninsurable employee. Encon, however, uses a third-party administrator to handle claim payment.
Empireis well established in the Canadian marketplace. They provide excellent service to their in-force groups. On the downside, they offer only a 12-month rate guarantee on their premiums. Many carriers offer a 16-month rate guarantee.
Blue Cross offers excellent name recognition and a 16-month rate guarantee. White fillings are standard in their dental coverage. We think, though, that they could enhance their technology. For example, Blue Cross just recently put in place a pre-authorized system for paying premiums.
Industrial Alliance Pacific and its parent company Industrial Alliance Insurance and Financial Services Inc. offer a unique Pick-a-Term program. The plan is available on an individual or joint life basis. Applicants can be between 18 and 70 years of age, and is available in face amounts as low as $20,000.
The unique feature about the Industrial Alliance Pick-a-Term plan is the applicant gets to select a term between 10 and 30 years. This is a terrific feature for anyone who wants to cover a debt for a specific period of time, such as a mortgage.
Pick-a-Term plans with terms between 10 to 15 years can be issued with a level or decreasing death benefit. The latter option allows the coverage to be issued with a lower premium—the coverage decreases at each policy anniversary but the premiums remain level for the length of the term.
Another very unique feature of the Industrial Alliance Pick-a-Term plan is the ability to add a disability rider. The coverage is offered with a benefit period of 2 or 5 years, and will end at the termination of coverage or at age 60, whichever comes first. The coverage is based on a loan balance that must be equal to or lower than the face amount of the life insurance. A monthly benefit is then specified. The benefit must be between $300 and $3,500 per month, up to a maximum of 1.5% of the loan. For example, a $100,000 loan balance allows for a maximum monthly benefit of $1,500 per month.
Below are examples of Industrial Alliance’s Pick-a-Term 10 rates at $250,000 of coverage:
Insured..............Standard Rates.......Preferred Rates
35-yr male N/S:....$21.38/month….........$16.88/month
45-yr male N/S:....$38.93/month….........$29.48/month
55-yr male N/S:....$84.38/month….........$62.55/month
Group insurance plans offer a full range of options. Deciding on the right benefit plan starts with choosing the right broker. The following are five reasons why LSM Insurance is the right choice for your company’s group benefit needs.
Extensive experience – Our brokers have almost thirty years of experience in the group benefit business. This experience helps our clients in many ways. We have built strong relationships with our insurance partners and their group underwriters. This has a tangible impact on the premiums your company pays.
Full-service team – All inquiries are responded to the same day. After-sale service is our top priority. The account executive assigned to your group is available to you seven days a week. You always deal directly with the person who put your company’s benefit plan in place. We don’t shuffle your questions to a third party. This means fast, knowledgeable, personalized service. One of our top brokers, Joel Cadesky, was recently called on Christmas Eve at 10 pm about an employee who was hospitalized with a broken leg while in Florida. Joel made a point of speaking with the hospital administrator to ensure all necessary paperwork was in place.
We are independent group specialists – We have a team of brokers specializing in employee benefit plans. We are not aligned with any one insurance company; instead, we survey the market and choose the plan and company that best suit your needs. Group carriers frequently change their pricing and plan features, so we monitor these changes and make any necessary adjustments.
No-charge individual and personal financial planning for your employees – Each group account is assigned a certified financial planner. You not only receive first-rate group coverage – your employees also receive personalized help with their individual insurance and retirement needs.
No fees for our services – Many brokers, even without our qualifications, charge consultation fees in addition to being compensated by the insurance carrier. We charge NO additional fees; all of our services are included in your monthly premium. We are compensated directly by the insurance carrier.
Unity Life of Canada has been selling insurance in Canada for over 100 years, and although they advertise less than some of their competitors they have one of the strongest term insurance line-ups in the Canadian marketplace.
They are one of the few companies to offer 5, 10, 15, 20, 25 and 30-year terms. And unlike most companies, their entire term line-up is competitively priced. Unity Life’s Term plans come in face amounts of $50,000 to $5,000,000 and are available on a single life or joint first-to-die basis.
The applicant can also add a children’s term rider, accidental death benefit, waiver of premium and indexing option. The indexing option increases the face amount and premium by 5% per year, up to 150% of the original face amount.
Unity Life also offers an E-Z Term 10 application which is available without a medical and with simplified underwriting.
Below are examples of Unity Life Term 10 rates at $250,000 of coverage:
Insured............Standard Rates:....Preferred Rates:
35-yr male N/S:....$19.58/month…....$15.30/month
45-yr male N/S:....$33.53/month…....$26.78/month
55-yr male N/S:....$75.38/month…....$57.83/month
True group benefit specialists know how each insurance company ranks when it comes to key plan features. There are features that shouldn't be overlooked when choosing a company benefit plan. We have compiled these into a list for you. If you read our recommendations you'll be able to get the best group insurance value.
Manulife Financial and its staff and agents are donating at least RMB2million (CAD284,000) to support the relief efforts in the areas of China affected by Monday's earthquake.
The donation will primarily go to the Red Cross Earthquake Appeal and be used to provide aid to the areas of China impacted by the disaster.
The company has a total of 766 staff and agents in Sichuan Province.
In 2003, Great-West Life Assurance Company acquired Canada Life Assurance Company. The transaction brought together three of the largest insurance companies under one financial roof—Canada Life, Great-West Life and London Life Insurance Company.
Great-West Life’s Term 10 and Term 20 plans mirror Canada Life’s Term 10 and Term 20 plans, but each company brands its own plan and uses its own distribution team. They are renewable and convertible to any of their permanent policies. Both company’s plans have a $100,000 minimum face amount, and the Term 10 plan is available to applicants aged 18 to 75, while the Term 20 plan is available to applicants aged 18 to 65.
Great-West Life offers preferred rates on amounts over $250,000 for those who qualify, on both smoker and non-smoker policies. The plans also have the following riders/benefits available as add-ons: accidental death benefit, guaranteed issue rider, waiver of premium rider, limited waiver of premium rider, and children’s life insurance rider. The children’s life insurance rider is available in multiples of $2,500, up to $25,000. It covers all children—natural, adopted or step-children of the insured up to age 25, and they can convert into a permanent plan up to five times their coverage without a medical.
On the downside, the $100,000 minimum face amount makes it problematic for older applicants on a tight budget to cover a temporary insurance need, such as a mortgage or business loan.
Below are examples of Great-West Life’s Term 10 rates at $250,000 of coverage:
Insured..............Standard Rates.......Preferred Rates
35-yr male N/S:....$18.00/month….........$13.73/month
45-yr male N/S:....$31.95/month….........$25.20/month
55-yr male N/S:....$73.80/month….........$56.70/month
Should I buy term insurance or permanent insurance? This is likely the most frequently asked life insurance question. Many insurance and financial “experts” will give a uniform answer, but reality is not so simple.
Canada Life Assurance Company offers four types of disability plans: lifestyle protection plan, independence plan, overhead expense plan, and a buy/sell plan. Its flagship disability product is their lifestyle protection plan. The plan is non-cancellable (i.e., you can cancel the plan but the insurance company cannot) and is guaranteed renewable. The policy is designed for professionals, business owners and executives.
The plan is very flexible—providing basic injury and illness protection, and allowing the applicant to choose from a host of riders which enhance the level of protection. One unique feature is their “own occupation” feature, which ensures that the insured will be entitled to a claim under the plan as long as an injury or illness prevents them from doing their own occupation. This can be advantageous, especially for highly skilled professionals such as surgeons.
A cost of living feature can also be added which provides for the benefit to stay in line with inflation. Future income options allow the insured to upgrade coverage as their income increases, without any additional medical requirements.
Another very popular feature is their return of premium benefit, which returns 50% of the eligible premiums paid after seven years, if no more than 20% of the premiums have been paid out in claims. As an example, an individual who contributes $20,000 to their Canada Life disability plan over seven years and remained healthy for the entire period would receive $10,000 back. Therefore, the net cost of the coverage is $10,000.
Canada Life’s independence plan is geared toward the blue-collar worker. The coverage is more limited than their lifestyle plan, and is available with or without protection from illness-related disabilities. The latter is available without a medical.
This year marks Standard Life's 175th anniversary in Canada, and to commemorate this event, Standard Life is creating a $1.75 million endowment fund to enhance its current community investment program. "Standard Life's 175 years in Canada have been marked by important achievements and major contributions to the economic and social fabric of the country," said Joseph Iannicelli, President and Chief Executive Officer in a press release.
Check out our Standard Life company profile, news, and policy reviews.
Industrial Alliance Insurance and Financial Services Inc. is continuing its wealth-management expansion with a deal to take over National Financial Corp., whose operations include Aegon Dealer Services Canada, Money Concepts (Canada) and National Financial Insurance Agency.
Industrial Alliance did not disclose the terms of the transaction with the Canadian unit of Dutch insurer Aegon Group. The deal announced Friday is the 13th takeover in the Quebec City-headquartered company's drive into the wealth-management business in recent years.
The financial services business can be invigorating and highly rewarding, but it can also sap the energy of the most seasoned advisor. The stress of the industry can adversely affect an advisor’s health and personal life. We have recently launched a newsection of articles written on how to be a better life insurance broker. The latest addition to this growing list of tips for brokers focuses on creating work-life balance. Check out our tips that will help improve your morale and enhance your bottom line.
Transamerica Life offers a Term 10 and Term 20 plan. Their Term 10 plan is available to individuals from 0 to 70 of age, and their Term 20 plan is available to individuals ages 0 to 60. Both plans are available in face amounts from $50,000 to $10,000,000 –- amounts in excess of $10,000,000 are available on a special case basis. Both plans are also renewable to 80 and convertible up to age 65. Available riders include: children’s life rider, accidental death and dismemberment benefit, and a waiver of premium on disability.
Transamerica’s Term insurance plans are also available on an individual, multi-life or joint first-to-die basis. Individuals who are in good health and have a very good family health history can qualify for preferred rates; or better yet, those in excellent health can get the elite non-smoker rate.
Transamerica also offers Turbo Term 10 and Term 20 policies. These plans are issued very quickly and without a medical test. But the rates are higher, and the insured still has to answer all the basic health questions. The Turbo Term policies would not be available to individuals with manageable health issues—even if under control—such as diabetes.
Below are examples of Transamerica’s Term 10 rates at $250,000 of coverage:
Insured.............Standard Rates.....Preferred Rates
35-yr male N/S:...$19.80/month…......$15.53/month
45-yr male N/S:...$34.65/month…......$27.00/month
55-yr male N/S:...$76.05/month…......$56.03/month
AIG Life offers Term 10 and Term 20 plans which are well priced and provide some competitive advantages. Both plans are renewable to age 85, and are convertible up to age 70. The plans also allow you add a living benefit rider, thus saving the $6.75 per month policy fee.
Their Easy Term 10 plan is available without a medical; however, it should be noted that the applicant will still have to go through the traditional application process, and may require a physician’s letter.
Individuals who are in good health and have very good family health history can qualify for preferred rates; better yet, those in excellent health can get preferred plus rates.
Below are examples of AIG’s Term 10 rates on $250,000 of coverage:
Insured.............Standard Rates......Preferred Rates
35-yr male N/S:...$20.03/month…........$14.80/month
45-yr male N/S:...$33.54/month…........$25.65/month
55-yr male N/S:...$75.38/month…........$55.80/month
Unfortunately the plan name itself is confusing. AIG refers to two of their term policies as Preferred Term 10 and Preferred Term 20, but the plan name implies that all policies are issued at preferred rates when, in fact, the majority of policies are issued at standard rates (yet still carry the Preferred Term name). In addition, the plans are not available at face amounts under $100,000—this can problematic for older applicants on a tight budget.
Empire Life is one of the few life insurance companies in Canada to offer both participating and non-participating whole life policies.
Their non-participating policy – the 20 Pay Solution – is fully guaranteed and very well priced. The plan is fully paid-up after 20 years, after which cash values are available by loan or surrender at any time. The one caveat is if the policy owner cancels his/her policy before its twentieth anniversary, the plan has no value.
Both types of plan have a whole host of riders available, including term life, critical illness, accidental death benefit, and children’s term riders.
A 35-year-old male non smoker can take out $100,000 of Empire Life’s participating whole life plan for a premium of $205.65 a month. Based on the current dividend rates, which are not guaranteed, the plan has a cash value of $132,533 and a death benefit of $326,813 at age 65.
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Manulife Financial has two universal life plans, Security Life and InnoVision. Security Life is available with face amounts from $50,000, and is geared toward the family market. The policy is one of the few universal life plans within the Canadian marketplace to allow withdraws from the accumulation fund without any surrender penalties.
The InnoVision program has some key advantages for the long-term investor. It has a value bonus beginning in year five to all clients who have held their Manulife Universal Life policy for more than five policy years and every policy year after that. The plan also has additional bonuses for policyholders who make additional deposits.
Manulife Universal Life plans allow you to choose between multiple cost of insurance (COI) options, including an increasing COI which allows the applicant to focus on cash accumulation in the early policy years.
They also offer a level COI which guarantees that the rates are fixed for life, and quick pay COI options which provides for the COI charges to end after 10, 15 or 20 years. Their universal plan has a both guaranteed and market-based investment options.
Both the Security and InnoVision plans are available with preferred rates for applicants in very good health with a good family health history, but the savings are much less pronounced than on their term plans.
Their rates are very competitive at most age levels. As an example, a 45-year-old male non-smoker who applies for $250,000 of universal life level cost coverage would pay a minimum premium (i.e., the premium to keep your plan in force) of $163.93 per month with the Security Life plan, and $165.47 per month with InnoVision.
The British Columbia and Alberta governments have introduced amendments to their respective insurance laws to live up to the spirit of the Trade, Investment and Labour Mobility Agreement (TILMA), aimed at removing trade barriers between the two provinces.
The amendments include improved coverage, better access to insurance contract information, and improved dispute resolution mechanisms, the B.C. government said in a news release, quoted by The Vancouver Sun.
Wawanesa Life, a major property and casualty carrier, offers Term 10 and Term 20 insurance, coined LifeStyle Term. The Term 10 plan is available for applicants between the ages of 18 to 70, and the Term 20 plan is available for applicants between 18 to 60 years old. Both plans are renewable and convertible, and are available on an individual, multi-life or first-to-die basis.
The plans are available with a disability waiver, accidental death benefit, and children’s term rider. The children’s rider is available in amounts of $2,000 to $20,000, and the cost is $5 per year per thousand dollars of insurance regardless of the number of children. One quirk in these plans is that children’s term riders are not available on Joint Life policies.
Both plans also have preferred rates on face amounts greater than $250,000, and are convertible without a medical to age 70 into permanent policies.
Below are examples of Wawanesa Life’s Term 10 rates at $250,000 of coverage:
Insured..............Standard Rates.....Preferred Rates
35-yr male N/S:....$19.13/month….......$15.08/month
45-yr male N/S:....$33.08/month….......$25.65/month
55-yr male N/S:....$72.45/month….......$55.35/month
AXA Canada offers two universal life plans—Universal Life Protection and Universal Life Investment. The former is available on face amounts from $25,000 to $499,999, and the latter is available on amounts of $500,000 and higher.
Universal Life Protection is geared toward younger families; there are no surrender fees, but withdrawals must be a minimum of $500. Universal Life Investment is geared toward business owners and applicants over 50 years of age. This plan has two additional costs of insurance options, but also has surrender penalties on all withdrawals during the first nine policy years.
Both plans offer four guaranteed investment accounts, nine index investment accounts and 12 managed investment accounts. Both also have an Extreme Disability feature built into the policy. This feature (which is also available on AXA’s Term 10 and Term 20 plans) pays out an advance of 50% of the death benefit (up to $250,000) if the insured has an extreme disability.
Both plans also include three assistance benefits free of charge: identity theft, legal assistance, and lifestyle service. Applicants in good health with very good family health history can also qualify for preferred rates.
There are two significant drawbacks: the plans are poorly priced at many age groups, and they do not have a level cost of insurance option. This means that the cost of insurance on these plans will increase significantly in the later policy years.
Canada Life offers two participating whole life policies: Estate Achiever, which aims to maximize the insured’s estate, and Wealth Achiever, which focuses on cash accumulation.
Unlike non-participating whole life policies, participating whole life policies pay a dividend based on the profits of the company. They offer guaranteed premiums and lifetime protection, though the dividends are not guaranteed.
Both of Canada Life’s participating whole life policies have five dividend options: paid-up additions, premium reduction, dividend on deposit, premium reduction, and enhanced coverage.
The plan is available on single life, joint first-to-die, and joint last-to-die bases. The last-to-die policy, which is used for estate-planning purposes, pays a tax-free benefit on the death of the second spouse. The policy owner can also add a disability waiver of premium benefit or an accidental death benefit.
A 35-year-old male non smoker can take out $100,000 of Canada Life’s Wealth Achiever Life plan for a premium of $182.61 a month. Based on the current dividend rates, which are not guaranteed, the plan has a cash value of $119,915 and a death benefit of $260,514 at age 65.
AIG’s whole life plan is referred to as 20 Pay Life. It is a non-participating whole life policy, as it does not participate in the profits of the company as does a participating whole life policy.
AIG’s 20 Pay life is more expensive than competing non-participating policies, but it has features unavailable in rival plans. The main benefit of 20 Pay Life is that it starts building cash value and offers reduced paid-up insurance in the eleventh policy year. Most competing plans only offer cash values and paid-up values after the twentieth policy year. The plan also offers a host of riders, including term riders on the primary insured or a spouse, a children’s term rider, accidental death coverage, and a waiver of premium in the event of disability.
A 35-year-old male non smoker can take out $100,000 of AIG’s non-participating whole life 20 Pay Life plan for a premium of $107.67 a month. The cash value is $8,407 after 10 years and $22,420 after 20 years.
Low-income British Columbians can now receive some added pain relief as the B.C. government became the first in Canada to include registered acupuncturists under its Medical Services Plan premium-assistance program.
About 963,500 British Columbians living in households earning a combined $28,000 or less a year - including welfare recipients, students, the disabled, and seniors - are covered by the supplementary benefit.
The government estimates about two per cent of that population will initially use the treatment at a cost to the taxpayer, based on an average of five visits, of about $2.2 million, the Times Colonist wrote.
Unity Life of Canada, a Foresters Company, expands its product portfolio with the addition of Forester Passport Universal Life. This universal life product complements Unity Life's competitive term and solid permanent products and is available to Canadians nationwide through its extensive brokerage distribution network.
"Forester Passport Universal Life is designed specifically to meet the needs of the middle market," said Rob Baboth, Unity Life's Vice President, Sales and Marketing.
Desjardins Financial Security is the fourth largest life insurance company in Canada in terms of policies written; they are the largest in Quebec. They employ both a captive and an independent sales force.
Their Term 10 and Term 20 plans are offered with face amounts as low as $50,000, and the plans have a host of available riders, including disability insurance, accidental death or dismemberment coverage, accidental fracture coverage, coverage for the insured person’s spouse or children, guaranteed insurability, and a premium waiver in the event of disability.
Both plans are convertible without a medical to a permanent policy (i.e., a plan where the rates are level and the insured has lifetime protection).
Individuals who are in good health and have very good family health history can qualify for preferred rates; better yet, those in excellent health can get super preferred rates.
Below are examples of Desjardins’ Term 10 rates at $250,000 of coverage:
Insured.............Standard Rates...Preferred Rates
35-yr male N/S:...$20.25/month…......$16.43/month
45-yr male N/S:...$34.65/month…......$27.00/month
55-yr male N/S:...$76.05/month…......$58.50/month
RBC Insurance, part of the RBC Financial Group, is a newcomer to the Canadian marketplace. Their Term 10 and Term 20 plans are renewable and convertible to any of their permanent policies. Both plans have a $100,000 minimum face amount, and the Term 10 plan is available to applicants aged 18 to 70 while the Term 20 plan is available to applicants aged 18 to 60. Both plans are renewable to age 80.
RBC Insurance offers preferred rates for those who qualify on amounts over $250,000 -- non-smokers qualifying for optimum rates can get rates 25% lower than standard rates.
RBC Insurance term policies offer the following built-in features: the insured can convert to permanent insurance without medical evidence prior to age 71 (most companies only offer this feature to age 65); their Term 10 policy has an exchange option which allows the insured to exchange a Term 10 policy for a Term 20 policy without providing medical evidence. You can elect this option at any time prior to either the 5th policy anniversary or the policy anniversary nearest the policyholder's 60th birthday, whichever comes first.
RBC Insurance's term policies also have the following riders/benefits available as add-ons: accidental death benefit, guaranteed issue rider, waiver of premium rider, and children’s life insurance rider.
Below are examples of RBC Insurance’s Term 10 rates at $250,000 of coverage:
Insured.............Standard Rates.....Preferred Rates
35-yr male N/S:...$18.90/month..........$13.95/month
45-yr male N/S:...$31.95/month..........$25.20/month
55-yr male N/S:...$73.80/month..........$54.45/month
Empire Life’s Term 10 is available to applicants aged 18 to 75; their Term 20 plans are available for those 18 to 65. The plans are available on an individual or joint life basis, and are guaranteed renewable to age 100—Empire Life is one of the few insurance companies to offer this renewable feature.
The plans also allow for a critical illness rider, accidental death benefit, children’s term rider, and children’s critical illness rider. The children’s critical illness rider covers all children over 10 months, including legally adopted and stepchildren, all for one monthly premium. This is an exceptional value for large families. This benefit covers 15 illnesses and up to $50,000 of coverage. The cost of this coverage is $10.80/month per $10,000 of coverage.
The term plans are available with face amounts as low as $25,000—this is a big plus for older applicants with a small temporary insurance need such as for a mortgage or line of credit.
On the downside, Empire Life does not offer preferred rates—applicants in very good health and with good family health history may be paying more than they would with other carriers.
Below are examples of Empire Life’s Term 10 rates at $250,000 of coverage:
Insured............Standard Rates:
35-yr male N/S:...$19.58/month
45-yr male N/S:...$35.33/month
55-yr male N/S:...$77.63/month
Standard Life offers a Term 10 and Term 20 insurance plan. The Term 10 plan is available to individuals aged 18 to 70, and the Term 20 plan is available to individuals aged 18 to 65. Both plans are renewable to age 85 and they are convertible up to age 65. The plans also allow you to add a wide selection of riders, including 10-year or 20-year term life riders, critical illness insurance rider, children’s life rider, and children’s enhanced protection rider, guaranteed insurability benefit, accidental death benefit, and a waiver of premium on disability.
Their term insurance plans are also available on an individual or joint first-to-die basis. Individuals who are in good health and have a very good family health history can qualify for preferred rates; better yet, those in excellent health can get a super preferred rate. On the downside, plans are not available at face amounts under $100,000; this can be problematic for older applicants on a tight budget.
Below are examples of Standard Life’s Term 10 rates at $250,000 of coverage:
Insured.............Standard Rates......Preferred Rates
35-yr male N/S:...$20.70/month….......$16.43/month
45-yr male N/S:...$38.48/month….......$28.58/month
55-yr male N/S:...$83.93/month….......$61.20/month
Transamerica Life offers a Term 10 and Term 20 plan. Their Term 10 plan is available to individuals from 0 to 70 of age, and their Term 20 plan is available to individuals ages 0 to 60. Both plans are available in face amounts from $50,000 to $10,000,000 –- amounts in excess of $10,000,000 are available on a special case basis. Both plans are also renewable to 80 and convertible up to age 65. Available riders include: children’s life rider, accidental death and dismemberment benefit, and a waiver of premium on disability.
Transamerica’s Term insurance plans are also available on an individual, multi-life or joint first-to-die basis. Individuals who are in good health and have a very good family health history can qualify for preferred rates; or better yet, those in excellent health can get the elite non-smoker rate.
Transamerica also offers Turbo Term 10 and Term 20 policies. These plans are issued very quickly and without a medical test. But the rates are higher, and the insured still has to answer all the basic health questions. The Turbo Term policies would not be available to individuals with manageable health issues—even if under control—such as diabetes.
Below are examples of Transamerica’s Term 10 rates at $250,000 of coverage:
Insured.............Standard Rates.....Preferred Rates
35-yr male N/S:...$19.80/month…......$15.53/month
45-yr male N/S:...$34.65/month…......$27.00/month
55-yr male N/S:...$76.05/month…......$56.03/month
Equitable Life offers a very competitively priced participating whole life policy. Unlike non-participating whole life policies, participating whole life policies pay a dividend based on the profits of the company. They offer guaranteed premiums and lifetime protection, though the dividends are not guaranteed.
Equitable Life’s participating whole life policy has six dividend options: paid-up additions, premium reduction, dividend on deposit, premium reduction or paid in cash, enhanced protection, and purchase units in a common stock fund.
The last option, to purchase units in a common stock fund, is not available in many traditional whole life policies and is an attractive feature. It allows the policy owner to combine the guarantees of whole life coverage with the growth opportunities of equity-based investments.
The plan is available on Life Pay or 20 Pay bases, and you can add Term 10, Term 20, or Spousal Term riders.
A 35-year-old male non smoker can take out $100,000 of an Equitable Life participating whole life plan for a premium of $163.00 a month. Based on the current dividend rates, which are not guaranteed, the plan has a cash value of $123,018 and a death benefit of $260,518 at age 65.
The Co-operators are a major supplier of property and casualty insurance in Canada. They also market term 10 and term 25 life insurance plans through their captive sales force.
Both term plans are offered on an individual or joint life basis. Their term 10 is not very well priced at most age groups; however, they are one of the few insurance
Only three insurance companies in Canada offer a 25-year term: Primerica; Unity Life and Co-operators. Twenty-five year term coverage—offering level premiums for the first 25 policy years—can be a good fit for young families wanting to cover a mortgage. On the downside, the lack of competition makes it a less competitively priced plan.
For example, a 40-year-old male non-smoker can get $250,000 standard rate Term 20 coverage with Canada Life for $36.45 per month. The same amount of coverage would cost $44.33 per month on the Co-operators’ Term 25 plan.
Below are examples of Co-operators Term 10 rates at $250,000 of coverage:
Insured............Standard Rates:
35-yr male N/S:...$20.25/month
45-yr male N/S:...$34.65/month
55-yr male N/S:...$77.40/month
Industrial Alliance Pacific and its parent company Industrial Alliance Insurance and Financial Services Inc. offer a universal life policy branded “Genesis.” Genesis is available with face amounts as low as $25,000 (or $300 per year annual premium) and issue ages from birth to age 85.
This plan allows you to choose between multiple "Cost of Insurance" (COI) options, including an increasing COI which allows the applicant to focus on cash accumulation in the early policy years. The level COI plan guarantees your rates are fixed for life, and the quick pay COI option allows for the COI charges to end after 10, 15 or 20 years. Their universal plan has a both guaranteed and market-based investment options.
Genesis is available with preferred rates for those applicants in very good health and good family health history. But the savings are much less pronounced than on Industrial Alliance’s term plans. The Genesis plan also has a surrender charge on withdraws in the first seven policy years.
Their rates are competitive at most age levels. As an example, a 45-year-old male non-smoker who applies for $250,000 of universal life level cost coverage would pay a minimum premium (i.e., the premium to keep the plan in force) of $180.42 per month.
Assumption Life’s Universal Life program (referred to as Odyssey) is available to applicants aged 15 to 80—the older issue limit is nice a feature. The plan does share many of the advantages available on other universal life policies, such as flexible premiums, multiple cost of insurance, and death benefit options.
The plan holds a very limited share of Canada’s universal life market share, but it is highly competitive in the 30 to 40 age range. They are also one of the only Canadian companies to offer a guaranteed cash value in their Universal Life plan. Many of their investment accounts have performed well, but their selection is limited when compared with AIG and Manulife’s Universal Life programs.
Desjardins Financial Security’s universal life plan has flexible premiums, and the investment accounts grow on a tax-sheltered basis; depending on the investment vehicle, funds can be withdrawn at any time. The investment account is paid on top of the face amount tax-free, and the funds within the investment account can be used as an emergency fund, to supplement the applicant’s retirement needs, or to offset future premiums.
AIG’s Critical Illness program provides competitively priced protection with a variety of plan options. The coverage pays out a tax-free lump sum payout upon diagnosis of a critical illness. The coverage is backed by AIG Life Insurance Company of Canada.
This plan does more than pay out money in a time of crisis—it provides additional knowledge to assist you in understanding the illness and treatment options. Living benefit clients get free access to AIG’s Best Doctors service, which provides a customized search of a global database of over 50,000 specialists who are best qualified to deal with the client’s illness.
While receiving treatment, Best Doctors offers assistance with medical appointments, pre-admission arrangements and discounts, and reservations and accommodations for you and your family. AIG takes this service a step further, providing your immediate and extended family full access as well.
Let’s look at an example of how AIG’s Critical Illness coverage combined with the Best Doctors service provides a unique value. Lisa, a 35-year-old stay-at-home mother of two decides to take out a $100,000 Critical Illness Term-to-75 through AIG. She adds the return of premium on death on surrender feature; her monthly premium is $100.80. Lisa stays at home, so she would not qualify for traditional disability insurance—if she develops a critical illness, she would receive access to the best doctors in the world, and tax-free money needed to help pay for the best medical treatment. If Lisa stays healthy, she gets back all her premiums at age 75, and if she dies from an unrelated illness or accident, her estate receives all her paid premiums.
Let’s assume Lisa’s mother-in-law, who is financially secure, has a stroke—Lisa would be able to provide her with more than just emotional support—Lisa can ensure she is treated by world-class specialists and receive cutting-edge medical treatments to maximize her chances of a successful recovery. One policy can have a tangible effect on the lives of multiple generations.
On April 3, Foresters and Unity Life of Canada announced completion of the agreement under which Unity Life becomes a wholly owned subsidiary of Foresters and will represent Foresters in the Canadian market as "Unity Life of Canada, a Foresters Company."
The announcement follows the April 2nd completion of the sponsored demutualization of Unity Life, which recently received approval from eligible Unity Life policyholders and Canadian regulatory authorities, and a share transaction between the two parties. The $50 million in proceeds from the share transaction will be paid to eligible policyholders in exchange for their voting control and their share of the value of Unity Life.
Commencing in mid-April, Unity Life will make cash payments to up to 15,000 eligible Unity Life policyholders. The average payment to eligible policyholders will be $3,300, with the exact amount based on factors such as the size, policy cash value and duration of their policies. The insurance coverage, policy values, premiums and the right to receive experience dividends of Unity Life policyholders will be unaffected by the sponsored demutualization.
Unity Life customers will have access to the product lines of both Foresters and Unity Life. New customers who purchase eligible individual life insurance products from Unity Life will become full voting members of Foresters and enjoy all Foresters member entitlements and benefits. Additionally, Foresters will take on some Unity Life corporate activities that are presently outsourced.
For more information on what the demutualization means, click here.
Manulife Financial has very rich history and is one of Canada’s most reputable life insurance companies. Their Term 10 and Term 20 plans are renewable and convertible to any of their permanent policies. Both plans have a $100,000 minimum face amount, and the Term 10 plan is available to applicants aged 18 to 70 while the Term 20 plan is available to applicants aged 18 to 60.
Manulife offers preferred rates on amounts over $250,000 for those who qualify, on both smoker and non-smoker policies. The plans also have the following riders/benefits available as add-ons: accidental death benefit, guaranteed issue rider, waiver of premium rider, and children’s life insurance rider. The children’s life rider covers each insured child for $10,000 at a cost of $2.04 per month. The plan allows each child to convert up to 25 times the coverage, or $250,000, without a medical. This is a terrific option, especially for children with family health issues.
On the downside, the $100,000 minimum face amount makes it problematic for older applicants on a tight budget to cover a temporary insurance need like a mortgage or business loan.
Below are examples of Manulife’s Term 10 rates at $250,000 of coverage:
Insured...............Standard Rates......Preferred Rates
35-yr male N/S:....$19.74/month…........$16.16/month
45-yr male N/S:....$34.85/month…........$27.97/month
55-yr male N/S:....$75.37/month…........$58.83/month
Wawanesa Life’s Universal Life plan is referred to as Quest. The basic insurance plan provides level coverage for life. There are also two guaranteed Cost of Insurance (COI) charge options available: level monthly charges for life, and an increasing COI option. The increasing option has level monthly COI charges to age 65 or for 15 years, whichever comes first; then the COI charges increase and remain level thereafter.
The investment options on the Quest plan are very limited compared to other carriers. AIG, for example, has over 400 investment accounts available, while Wawanesa has six investment accounts: a daily interest account, fixed interest account, Canadian equity index account, U.S. equity index account, International equity index account and a Canadian bond index account. The policy has a built-in guaranteed investment bonus of 1% of the plan’s accumulation value from years three to 24; from years 25 and beyond this bonus jumps to 1.25% of the plan’s accumulated value.
Preferred rates are not available on the Quest plan. As an example of their pricing, a 45-year-old male non-smoker who applies for $250,000 of Universal life level cost coverage will pay a minimum premium (i.e., the premium to keep the plan in force) of $188.46 a month.
The credit crunch in the United States - and to a lesser extent Canada - has been widely publicized in recent months. It’s had a huge impact on real estate and equity markets. But the explosion of long term loans and lines of credit is also having a big impact on the life insurance industry.
Traditionally, mortgages were set up with a 25 year amortization period and by making bi-weekly or weekly payments many consumers were able to rid themselves of the largest debt in less than 20 years. However, as real estate`s vales soared in the 1990’s and the new millennium, many consumers started taking on an increasing amount of debt and extending their mortgage amortization to 30 or 40 years.
This trend has had an impact on the type of insurance policy consumers are using to cover the mortgage. Mortgage holders who wisely opt of the bank’s mortgage insurance plan are left with the dilemma of a long term life insurance need and potentially limited finances. In years past many consumers opted for a 10 or 20 year Term policy to cover their mortgage – the problem with these policies is the cost escalates dramatically upon renewal. Case and point a 40 year male non smoker would pay $37.80 a month for a $250,000 Term 20 policy with Transamerica Life but the renewal premium after 20 years is $517.95 a month. Now the insured could re-apply for a new policy in 20 years to lower his rate but if his health has changed this may not be a viable option.
The solution is to opt for a Permanent policy i.e. one where the cost is level for life or a Term 30 policy. Permanent policies can be a terrific solution in many instances but the cost can be prohibitive for families straddled with high debt. That’s where a Term 30 policy can come into play. The premiums on these policies are guaranteed for 30 years and the cost is substantially less than a permanent policy. These policies are extremely popular in the United States but in Canada there are a limited number of players offering these policies. Transamerica Life is the newest entrant and their policies offer some unique paid up features not available in more conventional Term 30 policies.
Some of the other insurers offering Term 30 policies in Canada include Assumption Life, BMO Life, Primerica Life Canada and Unity Life. Industrial Alliance also introduced a very unique Pick-a-Term policy that allows the insured to pick the length of their term from ten to thirty years.
The one caveat with a Term 30 policy is that policyholder can potentially have put in thousands over the 30 years and if they outlive their term they are pretty much out of luck. Case and point that same 40 year old male non smoker takes out $250,000 of Term 30 coverage with Unity Life – the monthly premium is $78.30 a month. His contribution is $28,188 over 30 years – and if he wants to renew it at age 70 the monthly premium spirals to $945.23 a month.
As we have reported earlier, policyholders of Unity Life of Canada have voted to sell the insurer in April to the "The Independent Order of Foresters", a fraternal benefit society.
Let me add some background and comments to clarify the situation at Unity Life.
Demutualization is the process of converting from a mutual company, owned by its policy holders, to a company with common shares, owned by its shareholders. In exchange for the value of their ownership rights policy holders choose between receiving shares of the company or the equivalent in cash.
This is great news for the 15,000 eligible Unity Life policyholders. They essentially keep their coverage intact and get a free windfall.
People who owned these policies voted overwhelmingly in favour of because it was in their best financial interests to do so. They will receive significant compensation ($3,300 on average) without relinquishing their policies or benefits. I was personally the benefactor of the Manulife demutualization – my father wisely purchased small Whole Life policies for me and my two brothers which translated into almost $7,000 worth of shares which have more than tripled in value.
The only real losers in the above announcement are the policyholders who died before the demutualization announcement. They will be ineligible for the payout and many of these policy holders held their policies for decades and were responsible for the building of the company.
AXA Canada’s Term 10 and Term 20 life insurance policies have a unique feature that many consumers are unaware of. AXA is the only life insurance company in Canada to offer a term insurance policy with a built-in Extreme Disability Benefit (EDB)—in some cases, the cost is less expensive than traditional term insurance policies.
The advantage of this coverage is that, not only is the insured’s family protected if he/she dies within the stated term, but the policy includes the added protection of the EDB. This feature can provide additional value to Canadians who live with long and often treacherous winter driving conditions.
The EDB pays out 50% of the policy amount (up to a maximum of $250,000) for individuals who suffer an extreme disability. An extreme disability claim requires the insured to have suffered a permanent disability and requires assistance with five of the seven functions of daily living.
There are definitely limitations with this coverage, and it should not be confused with traditional disability insurance (which covers a much wider range of disabilities). The extreme disability must occur before age 60, and this benefit reduces the death benefit claim dollar-for-dollar. Therefore, if someone with a $600,000 life insurance policy develops an extreme disability, and subsequently dies—the $250,000 EDB will be deducted from the $600,000 life insurance payout.
Below are examples of AXA’s Term 10 rates at $250,000 of coverage:
Insured.............Standard Rates.....Preferred Rates:
35-yr male N/S:...$21.13/month…......$16.43/month
45-yr male N/S:...$35.78/month…......$26.55/month
55-yr male N/S:...$80.10/month…......$57.66/month
RBC Insurance has four primary income replacement plans. Two of the plans are geared toward the professional market—the first is the Professional Series and their second plan is referred to as the Quantum Policy. The Professional Series is available with benefit amounts ranging from $450 to $25,000 per month. The plan is non-cancellable, meaning the insurance company cannot raise the rates or cancel the coverage. This is advantageous for the insured as they can always cancel or reduce the coverage, but RBC Insurance is bound by the terms of the contract regardless of a change in health.
The Quantum Policy is a lower-cost alternative for professionals and business owners. The policy is guaranteed renewable, meaning the insurance company can adjust the premiums or cancel the coverage on a class-wide basis. The policy has also a loss of earnings definition of disability, integration of benefits, and a focus on rehabilitation. The policy may also offer more flexibility in terms of underwriting.
Both the Professional and Quantum plans are available on a step rate basis. The initial premium is payable either to age 30 or five years after the date of issue, whichever is later. After the initial period, the premium increases to the ultimate level.
RBC Insurance also offers two plans targeted at blue-collar workers, farmers and middle-income earners. The policies offer less features and are available on a non-cancellable (i.e., RBC Insurance’s Foundation Series) and a cancellable basis (i.e., RBC Insurance’s Bridge Plan). Both these policies also have a step rate version.
Canadian Doctors for Medicare called on the federal and provincial governments to immediately take all necessary steps to stop the spread of private health insurance for medically necessary services in British Columbia.
"The recent exposé that Acure Health Corp is selling 'Medical Access Insurance' for services already covered under Medicare undermines the public health care system to the detriment of the vast majority of Canadians, and contravenes the Canada Health Act", said Dr. Danielle Martin, Chair of Canadian Doctors for Medicare.
"It is illegal in British Columbia to sell private duplicate insurance for services already covered by MSP. If it turns out that ACURE has been collecting illegal insurance premiums, the money should be returned to the consumers," said Dr. Martin.
Equitable Life’s Term 10 and Term 20 policies are available with face amounts as low as $50,000. Issue age limits are 18 to 75 years of age on their Term 10 plan, and 18 to 65 years of age on their Term 20 plan.
Equitable life offers preferred rates for those who qualify, on amounts over $250,000 for both smoker and non-smoker policies. The plans also have the following riders/benefits available as add-ons: accidental death benefit, guaranteed issue rider, waiver of premium rider, and children’s life insurance rider.
In addition to the tax-free death benefit paid out to the policyholder’s heirs, both plans have a built-in bereavement counselling benefit. This benefit automatically reimburses any counselling expenses to the beneficiary of the insured up to $500 per claim. The receipts must be submitted within a 12-month period of incurring the expense.
Another terrific feature in Equitable Life’s Term insurance line-up is its conversion credit. All term policies converted to a permanent (i.e., a level rate plan) qualify for a 25% credit of the last 12 months of premiums.
Below are examples of Equitable Life’s Term 10 rates at $250,000 of coverage:
Client................Standard Rates....Preferred Rates
35-yr male N/S:...$19.35/month….....$15.08/month
45-yr male N/S:...$33.53/month….....$26.33/month
55-yr male N/S:...$75.38/month….....$57.38/month
Empire Life’s universal life plan, branded “Trilogy,” is one of the most flexible universal life plans in the industry. The policy allows you to cover up to five individuals under one policy—and with the average universal life policy fee at about $90 per year, this can add up to significant savings over the life of the policy.
Empire’s Trilogy plan is available to individuals from birth to age 85, and with face amounts as low as $10,000. The lower face amounts can be an attractive feature for seniors on a tight budget looking to cover final expenses. The plan has variety of investments options, including seven different guaranteed interest accounts and 23 index options.
A critical illness rider covering 21 illnesses, including loss of independence, is available. A unique feature is that the critical illness rider is available as an advance or an additional payout. The critical illness advance pays out all claims as an advance against the death benefit, but the cost is much lower; the critical illness addition pays out any claims separately and does not limit the death benefit in any way. Other optional riders include accidental death and dismemberment, disability waiver of premium, a children’s life rider, and a guaranteed insurability rider.
Similar to their term plans, Empire Life’s Trilogy plan does not offer preferred rates—so those in very good health and with good family health history may be paying more than they would with other insurance companies (although the number of carriers offering preferred rates on universal life insurance is far more limited than term insurance, and the discounts are much less significant).
The cost for a 45-year-old male non-smoker who applies for $250,000 of universal life level cost coverage would pay a minimum premium (i.e., the premium to keep the plan in force) would be $170.71 per month.
Canada Life’s Universal Life plan is available with face amounts as low as $25,000, and issue ages from birth to age 85.
The plan allows you to choose between multiple Cost of Insurance (COI) options, including an increasing COI which allows the applicant to focus on cash accumulation in the early policy years.
They also have a level COI option which guarantees that your rates are fixed for life, and a quick pay COI option which allows for the COI charges to end after 10, 15 or 20 years. Their universal plan has a full host of guaranteed and market-based investment options.
Best of all is that Canada Life’s universal life plan qualifies for their “Astra” program. This program gives a 50% reduction in premiums to all rated policyholders. A rated policy is one in which the insured is charged an extra risk premium for certain health or lifestyle issues.
The savings can be dramatic. As an example, take a 45-year-old male non-smoking diabetic who applies for $250,000 of universal life level cost coverage. Let’s assume the insured is rated plus 50% for his diabetes; the minimum premium (i.e., the premium to keep the plan in force) is $259.57 per month. With the Astra program, this same individual’s premiums drop to $176.45 per month. This can have a tremendous impact on the premiums paid over the life of the policy.
Canada Life’s universal life plan, which is one of the best in the industry, does have a surrender charge on all withdraws during the first 10 policy years.
AXA Canada offers a blue-collar individual disability plan with a monthly indemnity from $300 to $3,500. The waiting periods on their plan range from the first day on injury-only coverage, to the 120th day on their illness protection. Benefit periods range from six months to 60 months. On their injury-only coverage, the benefit period can be extended to the age of 65.
The plan offers add-ons such as a business overhead expense benefit, hospital allowance, and critical illness benefit. AXA’s disability plan offers a built-in return of premium benefit. If the insured is less than 46 years old at the time of issue, 50% of all premiums paid (less what the plan has paid out) go back to the policyholder. This benefit is paid out when the insured reaches 65 years of age. An enhanced return of premium of benefit feature can also be added, which will return 100% of the insured’s premiums at age 65 if a claim has not been made.
AXA’s disability plan has some attractive features, but is geared toward the blue-collar market. Professionals and business owners can get a higher quality and more competitively priced plan from other carriers like Manulife, Canada Life or RBC Insurance. This plan is also not appropriate for higher income earners, as the monthly benefit is limited to a maximum of $3,500. Another drawback is the illness benefit period, which is only available for a maximum of 60 months.
As there is not much information available to newcomers in the life insurance business, I’ve decided to put together a short list of potential pitfalls and mistakes that aspiring professionals should learn to avoid. This sector offers plenty of opportunities, and there’s always possibility for more growth—those who will use the advice contained in the latest article, Critical Mistakes to Avoid in the Life Insurance Business, will have no obstacles in their path to success.
Our special section for brokers now contains ten articles written for aspiring insurance professionals.
Industrial Alliance Pacific and its parent company Industrial Alliance Insurance and Financial Services Inc. has a disability insurance plan called Momentum. The base plan provides income replacement coverage from $500 to $4,000 per month in the event of a disability due to injury. The plan has three waiting period options—0 days, 30 days or 120 days, and a benefit period of 2 years or to age 60.
Riders can be added to extend coverage in the event of illness; business overhead protection and hospitalization riders are also available.
This plan has many limitations when compared with RBC Insurance, Canada Life and Manulife’s disability plans. The limitations are especially pronounced in the professional market—many professionals and other high-income earners require income protection in excess of $4,000 per month. The definition of disability is more restrictive with Industrial Alliance than that of its competitors, and certain riders, such as having the benefit increase with the cost of living or the ability to upgrade the plan without a medical, are not available.
"Insurance is not my job, it's my passion", admits Senior Insurance Consultant Jack Bendahan, who has now decided to share with us a moving story of his. In this rather personal account of his parents' illnesses, Jack recalls the times when he found out what it meant to be vulnerable.
"Life's precious. Let's talk about it", suggests Jack. By the time you'll have read his story, you may agree with him.
In addition to having highly competitive rates on both their Term and Universal Life policies. AIG offers a unique twist to its Joint Universal Life coverage. Most insurance companies offer applicants the option of a Single or Joint Life Universal Life policies, but AIG takes this a step further by offering a Joint Last-to-Die Conversion Option.
The rider provides applicants with the flexibility to convert a single life or Joint First-to-Die policy to a Joint Last-to-Die plan without evidence of insurability. This option can selected any time after the 5th policy year. One caveat this rider can not be offered if the second life to be insured is rated 200% of more. Policy ratings are given when applicants have certain health or lifestyle issues that make them an added risk. A rating of 200% would be double the standard rate.
Let’s look at a young couple – Ted and Jane. They are 35 year old professionals with two small kids. They decide they like the idea of having a permanent policy which will never increase in cost. So they apply for $250,000 of AIG’s Joint First-to-Die Universal Life policy with a level cost of insurance. They add the Last-to-Die conversion rider for a cost of a $150 a year. Thirty years down the road Ted and Jane’s children are fully grown and the cottage they inherited from Jane’s father has increased sharply in value. Jane and Ted want to pass on the cottage to their children when the die but they are very cognizant of the fact this will create a large tax liability for their children.
The solution – Jane and Ted exercise the Joint Last-to-Die conversion option on their Joint Universal Life policy. This allows Jane and Ted to substantially lower their monthly premium because the conversion is based on their original ages and the option can be exercised without a medical – good news for Ted who had a heart attack 4 years ago. But best all of all the policy will now pay out $250,000 tax free on the death of the second spouse giving their children the cash necessary to offset the taxes on the family cottage.
The Co-operators was founded in 1945 when a group of Saskatchewan wheat farmers decided to pool their collective resources to start insurance co-operative. The company has made great strides over the past 60 years, and has a significant presence in the Canadian property and casualty market.
All Co-operators insurance products are sold through a captive sales force (i.e., their sales team is limited to selling Co-operators life insurance products). Insurance products sold by captive agents tend to have higher costs because unlike an independent broker, they are unable to shop the market for the best rate; the insurance provider knows this, and prices their plans accordingly. Another reason for the higher premiums is that companies with a captive sales force tends to have more management layers and higher distribution costs, which are passed on to the consumer.
Co-operators’ universal life plan has multiple investment options, flexible premiums and level or increasing death benefits. One major flaw with their universal life plan is that the company does not offer a level cost of insurance option (COI). A level COI structure ensures the risk charge remains at a guaranteed level to age 100. The majority of Canada’s life insurance providers offer a level COI structure; this is a crucial option for applicants that want cost certainty.
Policyholders of Unity Life of Canada have voted to sell the insurer in April to the "The Independent Order of Foresters", a fraternal benefit society, The Toronto Star reported.
Some 15,000 holders of the Mississauga company's 192,000 active insurance policies will get an average of $3,300 in cash payments.
According to The Star article, more than 98.9 per cent of policyholders who voted were in favour of converting from a mutual company to become a subsidiary of Foresters. Several other major insurers have converted to shareholder companies over the past decade.
Foresters of Toronto has 735,000 members in North America and $5.4 billion in assets. It sponsored Unity's demutualization and will keep its brand name, which has been in use since Toronto Mutual Life Insurance Co. and Western Life Assurance Co. joined in 2002.
Unity president Tony Poole said Foresters will give his team more financial backing and products, The Star article concludes.
Canada Life’s Dual Solutions premium reduction allows clients to satisfy two separate needs and receive a 5% discount on each product. Depending on the size of the policies, this can translate into significant savings.
Critical illness insurance pays out a lump sum tax-free payout if the insured is diagnosed with one of the listed illness—this money can be used to cover one-time out-of-pocket expenses, such as home renovations or medical treatments outside of Canada.
Disability insurance is used as an ongoing income replacement vehicle. Separate needs often require separate solutions, and the Dual Solutions premium reduction makes solving this need more affordable.
There are certain exclusions:
Premium reduction is only available if both policies are taken out simultaneously
It is not available on critical illness conversions
It is not available on disability future insurability options
It is not available with any other premium reduction programs
Did you know that if you choose participating whole life insurance plan, the annual dividend is not guaranteed?
Why should you request an updated policy illustration?
What are the dividend options available?
These are just some of the questions I tried to answer in the latest addition to our Life Insurance Tips section. You probably know that whole life insurance provides coverage for the policyholder's entire life. If you want to learn more about this particular policy, read our article on The Ins and Outs of Whole Life Insurance.
Many of my clients ask me about the difference between Whole Life and Universal Life insurance policies. As it is not easy to answer if the former or the latter is the best option, I have written an article on comparison of both policies. You can read it and decide for yourself if it's going to be Whole Life or Universal Life for you. For more articles be sure to visit my life insurance tips page.
The Canadian Life and Health Insurance Association (CLHIA) commends the federal government and Minister Flaherty for the 2008 Federal Budget. "We welcome and support the continued fiscal prudence demonstrated by the Government of Canada," reads CLHIA's statement.
"In particular, we welcome the new Tax-Free Savings Account initiative. The life and health insurance industry looks forward to helping Canadians use this vehicle to invest in their future," said CLHIA President Frank Swedlove.
Assumption Life, which employs both a captive and independent sales network, has some unique term policies.
Most notable is their Term Plus plan, which is available for individuals aged 18 to 65, and for face amounts from $50,000 to $2,000,000. There are no medical exams on amounts under $250,000, and the premiums on the life and disability portion are guaranteed not to increase for the length of the term.
The real strength of this plan lies in its flexibility; the insured can choose from terms of 15, 20, 25, 30 and 35 years of coverage. The can be especially advantageous for those insuring a mortgage, given today’s longer amortization periods. (Assumption Life does also offer a more traditional Term 10 policy.)
On the downside the rates are not always competitive. The disability portion has a benefit period limited to 24 months and all occupation classes are priced at the same rate. This puts certain skilled occupations and professionals at a disadvantage as the can normally obtain lower rates.
Their Youth Plus plan, which is available for children aged 15 days to 17 years, provides for a level premium to age 25.
Many successful businesses are built upon referrals and the life insurance business is no exception. There are many effective methods, which when properly implemented are guaranteed to supercharge the referral results of life insurance brokers. In my latest guide, I will share some of my unique strategies for referral building – these strategies took me many years to perfect. This is just another addition my existing collection of articles written on how to be a better life insurance broker.
ACA Assurance’s Term 28 product is a very unique program. The plan provides for a level premium to age 28, and the coverage is convertible to a permanent plan. This plan is an affordable solution for students and parents and/or grandparents who want to set up a life insurance plan for a child.
The ACA Web site suggests it’s a good program for young workers; but in my estimation, it offers little value for a young adult in their 20s. They would be much better going with a traditional 10- or 20-year term policy. The costs are similar and the term can be extended in the future.
The product is convertible to an ACA permanent policy without a medical, and as an added bonus they offer a conversion credit. A few drawbacks to keep in mind—conversion rates are based on your age, and their pricing is at the time of conversion.
Moreover, ACA does not have a complete permanent insurance line-up—they do not offer a universal life policy. But they offer uniform rates for males and females, and smokers and non-smokers. This means smokers and males are getting a great deal, but non-smokers and females who live longer get the short end of the stick.
In 2003, Great-West Life Assurance Company acquired Canada Life Assurance Company. The transaction brought together three of the largest insurance companies under one financial roof — Canada Life, Great-West Life and London Life Insurance Company.
Great-West Life’s Universal Life plan allows the choice of multiple Costs of Insurance (COI) options, including an increasing COI which allows the applicant to focus on cash accumulation in the early policy years.
There is also a level COI option which guarantees that the rates are fixed for life, and a quick pay COI option which allow for the COI charges to end after 10, 15 or 20 years. This universal plan has a full host of guaranteed and market-based investment options.
A very attractive feature of Great-West Life’s plan (like the Canada Life plan) is that it qualifies for their “Astra program.” This program gives a 50% reduction in premiums to all rated policyholders. A rated policy is one which the insured is charged an extra risk premium for certain health or lifestyle issues.
The savings can be dramatic, take, for example, a 45-year old male diabetic non-smoker who applies for $250,000 of universal life level cost coverage. Assuming the insured’s policy is rated plus 50% for his diabetes, the minimum premium (i.e., the premium to keep the plan in force) would be $259.57 per month. With the Astra program, the same individual’s premiums drop to $176.45 per month. This has a tremendous impact on the premiums paid over the life of the policy.
Great-West’s plan, which is one of the best in the industry, does have a surrender charge on all withdrawals in the first 10 policy years.
AIG Life has three separate universal life programs with over 400 investment options—so when you go shopping, you’d better pick a broker who knows his/her stuff.
AIG’s Life Provider plan is available from birth to age 50, and at face amounts from $25,000 to $500,000. The lower face amounts are great for parents who want to set up a low-cost level rate insurance policy for their children. Larger policy amounts are available under the Life Dimension or Life Dimension Prestige plans. The latter has no surrender charges if you want to withdraw funds in the early policy years.
Their universal policies are available with a whole host of riders, including a critical illness, term 10, term 20, or children’s term riders. Their investment options include AIM Trimark, Mackenzie, Franklin Templeton and AGF. They also offer index funds and guaranteed investments within their Universal Life accounts.
Their rates are competitive at most ages. A 45-year-old male who applies for $250,000 of Universal life level cost coverage would pay a minimum premium (i.e., the premium to keep the plan in force) of $175.39 per month.
Universal life coverage on its own can be a confusing topic, but when combined with AIG’s myriad of investment and insurance choices, it can get a bit overwhelming. But if you do homework and work with a qualified broker, AIG can be a great fit.
Canada's life insurance companies are bracing for a slowdown in the U.S. economy, but their executives say they are also hoping to benefit from any shake-out due to tough market conditions, the Financial Post reported.
Sun Life Financial Inc. and Manulife Financial Corp. reported solid fourth-quarter profits Thursday despite difficult debt and equity markets, as well as the impact of the stronger Canadian dollar.
According to the Financial Post, Sun Life said quarterly earnings rose 1.8% to $555-million. The rise of the loonies relative to other currencies since the same quarter last year had a $41-million negative impact on profits.
At Manulife Financial Corp., profits were up 4% to $1.14-billion. Currency fluctuations hit earnings by 14% compared to last year. Overall, profit growth was slower than in previous quarters and the insurers are facing more uncertainty, especially due to the deteriorating U.S. economy, the report concluded.
MARKHAM, Ontario (CA), February 13, 2008 - The first online 2008 Canadian Income Tax Calculator was released today. This tool incorporates all tax rates for all 13 provinces of Canada.
“Being a certified financial planner myself, I know just how important this tool can be for the general public,” says Lorne S. Marr, President of Lorne S. Marr (LSM) Insurance Services Ltd. The LSM insurance team is behind the creation of the first online income tax calculator for all Canadian provinces.
“The idea itself roots in my own need for a fast and reliable online tax calculator for 2008,” Lorne S Marr explains. “I could not find one that would have incorporated all 13 provinces. That is why I had our software developers work one out.”
The calculator was built by Foliovision Ltd., an international web design and WordPress SEO company located in the Slovak Republic. “I was amazed how easy it was to use,” Mr. Marr says. “The only variable you have to input is your taxable income. It calculates the rest.”
The 2008 tax calculator is programmed to provide the tax payable; it calculates after-tax income, average tax rate, marginal tax rate, marginal rate on capital gains and marginal rate on ineligible dividends. It is also free to use.
Taxes can be surprisingly different between provinces. On an income of $80,000, you'd pay 6,700 more if you live in Nunavut as if you live in Quebec. “I'm so happy to help people have a quick look at their tax situation, ” says Lorne S. Marr. “Taxes are so painful that it's great to see everything at a glance. Just by moving to Alberta, I'd made 15,000 more dollars overnight,” he concludes.
Lorne S. Marr Insurance Services Ltd is a full service insurance broker offering life insurance and health insurance within Ontario from Canada's top insurers in custom-tailored plans.
If you'd like more information about this topic, or to schedule an interview with Lorne S. Marr, please call LSM Insurance at 905.248.4849 or e-mail Lorne at
Standard Life’s Universal Life plan is available to insureds up to the age of 80. Their Universal Life plan, called Perspecta, offers flexible premiums, multiple death benefit and cost of insurance options.
The plan has several available add-on options including: 10 and 20-year renewable and convertible term riders; critical illness riders for adults and children; children’s term riders; guaranteed insurability benefit; accidental death benefit; and a disability waiver benefit.
On the downside, Standard Life (which used to have industry-leading rates on their Universal Life plan) imposed a major rate increase across the board in 2005. Their rates are no longer very competitive among certain age groups. On the plus side, they are one of the few companies in Canada to offer preferred rates on both their Term and Universal Life plans.
As an example, a 45-year-old male non-smoker who applies for $250,000 of Universal life level cost coverage will pay a minimum premium (i.e., the premium to keep the plan in force) of $211.95 per month.
Transamerica Life has two Universal Life policies: Wealth Advantage which, as the name implies is geared more toward individuals who are focused on wealth accumulation; and Estate Advantage, which is designed for income protection and estate preservation.
The Wealth Advantage policy has an attractively priced annual renewable term cost of insurance structure; with this option, the life insurance charges are very low in the initial policy years, allowing the plan to maximize cash accumulation. The policy also has a performance bonus which is linked to the plan’s investment return, and commences in year two. On the downside, the cost of insurance increases dramatically in later policy years. Moreover, the plan has surrender penalties for the first 10 policy years.
The Estate Advantage policy has a very well-priced level cost of insurance option. This option has a higher initial cost, but the policy’s insurance charges remain level for life. The policy also has a choice of two investment structures: an accumulation bonus, which has higher management expense ratios on its investment accounts, but also has a bonus that starts in year two; or a low fee option which does not offer a bonus on its investment accounts, but has lower management expense ratios.
Both plans offer the following features:
• The premium tax is built into the cost of insurance
• Preferred rate on face amount of $250,000 and greater on policyholders 16 or older
• Multi-life or joint policies
• Children’s term rider
• Waiver of premium rider
• Guaranteed insurability rider
As an example of their pricing, a 45-year-old male non-smoker who applies for $250,000 of Universal life level cost coverage will pay a minimum premium (i.e., the premium to keep the plan in force) of $169.58 per month.
According to statistical data, one out of two Canadians are likely to need long-term care after they reach the age of 75. It’s important that we think of these matters in well in advance. That's why we've prepared another addition to our insurance tips section.
Canadian life insurance companies could be looking to do a little cross-border shopping, The Toronto Star reported.
The paper quotes analyst Michael Goldberg of Desjardins Securities as saying that some American life insurers have seen their financial results stung this week by the tumbling value of their mortgage-backed securities. He notes those lacklustre results are, in turn, creating potential opportunities for their Canadian counterparts.
"Weakness in U.S. lifecos may present strategic opportunities for Canadian lifecos," Goldberg wrote. In particular, financial services giant Manulife Financial Corp. is widely speculated to be interested in expanding its U.S. footprint and is believed to be eyeing American insurers Principal Financial Group and Lincoln National Corp, The Star concludes.
Manulife Financial’s disability insurance line-up has five products. Their Proguard Series is geared toward professionals. This is their flagship policy, and includes many built-in features. The plan has elimination periods from 30 days to 2 years. Benefit periods range from 2 years, 5 years and to age 65. The insured’s benefit can range from $200 to $24,500 a month.
The Proguard plan also offers a whole host of riders, including a cost of living rider to keep in line with inflation; a specific occupation rider for specialized occupations such as surgeons; and variety of return of premium riders that allow the insured to receive some of their premium back for staying healthy.
Another of Manulife’s disability plans is the Venture Series—a lower cost disability plan which fits the needs of all types of occupations. The Venture plan has less standard features than the Proguard series, but is available for full-time and part-time workers.
The ExpenseComp plan reimburses office overhead expenses for a small business or professional practice during disability. This plan has a maximum benefit period of 24 months.
Manulife’s Buy-Sell Plus provides funds for the healthy owners of a partnership or small business to buy out the shares of a disabled partner. The plan is unlike traditional disability coverage in that it pays out a lump sum rather than a monthly benefit.
Lastly, Manulife has a personal accident plan available for the blue-collar worker or the difficult to insure.
Union of Canada Life Insurance was founded in 1863 and presently operates in Ontario, Quebec, New Brunswick and PEI.
They are one of the few companies in Canada to offer a 5-year term policy. The policy is renewable to age 70 and convertible to age 65. The plan pricing, unfortunately, is uncompetitive.
Case in point: a 45 year-old male non-smoker who receives standard rates would pay $83.92 a month. That same person could buy the same policy with Unity Life for $42.98 a month, and the Unity Life plan is renewable to age 80 and convertible to age 70.
Union of Canada Term 10 is cheaper than its 5-year plan. Looking at the same 45 year-old non-smoker, he would pay $55.84 a month for a 10-year. Nothing to get too excited about—he could get the same policy from Canada Life for $31.95 a month. On the plus side Union of Canada five year and ten year term plans are both convertible to their non participating limited pay Whole Life policies - which are very well positioned in the Canadian marketplace. They also offer preferred rates on their Term 10 plan to individuals who are in excellent health and have a very good family health history.
RBC Insurance’s Universal Life plan is available in face amounts of $50,000 to $10,000,000 to applicants from birth to age 80. Similar to other universal life plans on the market, their plan offers flexible premiums, and the investment account grows on a tax-sheltered basis. The insured can choose between a level and increasing death benefit. The former is designed to maximize cash values, while the increasing death benefit pays out the face amount plus the plan’s accumulation fund on the insured’s death. The investment account can be used as an emergency fund, to supplement the applicant’s retirement needs, or to offset future premiums.
RBC Insurance’s Universal Life plan offers a minimum investment guarantee of 4%—this can be an attractive feature in today’s low interest rate environment. The plan has several available add-on options, including: a disability and/or critical illness waiver of premium, accidental death coverage, or a long-term care rider. The long-term care rider is a valuable living benefit which pays out a daily lump sum payment in the event the insured is unable to care for themselves.
Unlike their term portfolio, preferred rates are not available on their Universal Life plan. RBC Insurance also trimmed their Universal Life line-up with the removal of their Foundation Life Universal product. This plan allowed for limited-pay cost of insurance options—where the insured’s cost of insurance charges could end after 10, 15 or 20 years.
RBC Insurance’s rates are very competitive among certain age groups, but less competitive among non-smokers; as an example, a 45-year-old male non-smoker who applies for $250,000 of Universal Life level-cost coverage would pay a minimum premium (i.e., the premium to keep the plan in force) of $193.00 per month.
We have added detailed company descriptions to the list of our insurance and investment partners. These Canadian insurers are leaders in the industry and they provide a wide range of insurance and investment products, so it is worth checking out our assessment of their insurance policies. Already complete with contact info, website links and phone numbers, our guide will be regularly updated to bring you information about the latest insurance products of our partners.
Manulife Financial Corp. chief executive officer Dominic D'Alessandro called on Ottawa to allow this country's financial service players to merge, The Globe and Mail reported today.
Now, the insurance industry is a viable competitor on many banking products, he said, as are credit unions and others. "You've got more competition, more choice," he said.
“In the last ten years, we've had the insurance industry totally rationalize and three of us are now very large public companies, larger than many of the banks," D'Alessandro added. It might be better for Canada if the roughly one dozen big banks and insurers consolidated down to six or seven, he said.
However, Mr. D'Alessandro added that the resulting entities should still be subject to the current Canadian ownership rules regarding financial institutions, calling the widely held rule - that prevents foreign ownership stakes of larger than 20 per cent - the mildest, least offensive form of protectionism.
Being an independent Life Insurance Broker, Lorne S. Marr knows all about this demanding job. He has decided to share some of his knowledge with his perspective colleagues - aspiring insurance brokers. He and his associates have launched a brand new section of articles written on how to be a better life insurance broker. The latest addition to this growing list of tips for brokers focuses on in-person meetings with Prospective clients.
Desjardins Group is now offering its investor members a brand new product: the Desjardins Enhanced Return Guaranteed Investment, CNW Telbec reported today.
"This product, which they say offers a 100% capital guarantee at maturity, is specifically targeted at caisse members that wish to participate in the growth of the Canadian financial sector, in particular the banking and life and health insurance sectors, while benefiting from a guaranteed minimum return.
With the Desjardins Enhanced Return Guaranteed Investment, investors benefit from the return on eight equally weighted securities of the major Canadian banks and the three top life and health insurance companies in the country", the press release says.
We have just redesigned our popular Insurance Tips Section, where you can find a growing collection of useful articles written by Lorne S. Marr and his associates. From now on, you can browse eight thematic categories to find the topic that interests you the most - be it Term Life, Universal Life, Critical Illness, Disability or Group Insurance. We have also prepared some Mortgage Insurance and Investment Tips for you.
Are you looking for a home mortgage? Then the latest articles in our Insurance Tips Section are here right for you. The first one tells you what to avoid when applying for a mortgage, the second one gives you some facts on mortgage insurance. For these offers from your lender promise you convenience, but this convenience comes at a price...
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