What happens if my life insurance company goes bankrupt?

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.

Do you have what it takes to be a Top Life Insurance Broker?

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.

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AIG is now BMO:LSM Insurance quoted in the Toronto Sun on AIG

Following the potential bankruptcy rumours swirling around AIG, LSM Insurance was interviewed by the Toronto Sun. We were talking about Assuris, a "safety net" for the insured.

Here is a short excerpt form of the article:

"Brokers from LSM Insurance in Markham have been flooded by e-mails and phone calls from clients. What they point out is that 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."

AIG is now BMO:Five reasons to stick with AIG Life

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:

1. 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

2. 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.

3. 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.

4. 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

5. 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.

Transamerica to introduce new payment options

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.

Top 10 World Insurance Companies

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.

Changes to Canada Life’s Critical Illness Plan – Great news for the life insurance industry

• 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.

Six key traits of a successful insurance broker

Photo by Kripptic

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!

As a latest addition to our set of insurance broker articles, we give you LSM's six key traits of a successful insurance broker.