February 29th, 2008
- 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.
February 28th, 2008
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.
February 27th, 2008
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.
February 26th, 2008
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.
February 25th, 2008
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.
February 22nd, 2008
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.
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February 20th, 2008
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.
February 18th, 2008
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.
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February 15th, 2008
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.
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February 13th, 2008
NEWS RELEASE
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
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February 11th, 2008
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.
February 8th, 2008
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.
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February 7th, 2008
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.
In this guide we’ll familiarize you with the basics of long-term care policies and the key vocabulary associated with them.
February 6th, 2008
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.
February 6th, 2008
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.
Visit our list of Canadian life insurance companies
February 5th, 2008
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.
Visit our list of Canadian life insurance companies
February 4th, 2008
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.
Visit our list of Canadian life insurance companies
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