Term 100 Life Insurance: No Margin for Error

  Photo by Benson Kua
  Why Manulife's Lifewise Limited
pay policy may be better
than Desjardins Term 100.

Term 100 life insurance provides guaranteed, easy to understand protection. The premiums are level for life and the coverage remains level for the insured's lifetime. Most Term 100 plans are paid up to age 100, so if the insured happens to live past age 100, no further premiums must be paid, but the coverage remains in-force.

Term 100, in the purest sense, does not offer a cash value, which means you are paying for straight insurance with none of the premium going towards an investment component.

On the surface, Term 100 is attractive to many consumers. It keeps premiums more affordable. However, Term 100 still has its caveats and deceptions:

1. No room for error - A Term 100 policy only has a 31-day grace period, i.e., if the insured changes banks, or has an NSF payment, they have only 31 days to make up for a missed payment, after which the policy will lapse. If this happens later in the policy's history, you could lose thousands of dollars.

2. The insured may not have the same income at the time of retirement as they did at the time of application - Premiums that are affordable when the applicant was working may not be as affordable once they retire.

3. Most Term 100 policies do not have a reduced paid-up feature or cash value - If you change your mind about the coverage down the road, you are out of luck.

An alternative to Term 100 coverage is a Limited Pay Permanent Policy. A Limited Pay Permanent Policy provides lifetime protection, but the policy can be paid up in a limited number of years, i.e. 10, 15 or 20 years. That means you are covered for life, but the premiums stop prior to your retirement in most cases. The cost is a little higher, but it can give you and your family added piece of mind.

The following is a breakdown of $500,000 of Term 100 coverage against $500,000 of 20-pay coverage:

At the time this article was written, Desjardins had the lowest premiums on $500,000 of Term 100 coverage for a 35-year-old male, non-smoker at $2,080/year.

The lowest premium on a 20-pay policy was Manulife's Lifewise 20-pay at $3,465/year.

The breakdown below looks at the insured's total outlay over 20 years, 30 years, 40 years, 50 years and 60 years:

Total Outlay   Desjardins    Manulife

After 20 years  $41,600       $69,300

After 30 years  $62,400       $69,300

After 40 years  $83,200       $69,300

After 50 years  $104,000     $69,300

After 60 years  $124,800     $69,300

An additional factor to consider with the Limited Pay Policies is that those plans do build up a cash value. Manulife's policy has a cash value of $85,000 at age 65 and $172,500 at age 75.

If you have any questions, or would like us to work out a customized scenario for your situation, please don't hesitate to contact us at 1-866-899-4849 or you can visit us online for a free instant quote from our Permanent Life Insurance Instant Quote Page.

CARP’s Long-term Care Insurance Plan

CARP offers Long-term Care insurance
for its members.

The Canadian Association for the Fifty-Plus (CARP), formerly known as the Canadian Association of Retired Persons, offers a Long-term Care insurance program to its members that is underwritten by Desjardins.

The program offers essentially the same features and pricing as the plan offered by Desjardins independent brokers. The plan's premiums are guaranteed within the first five policy years and then subsequent premiums can go up on a class slide basis. The CARP Long-term Care program is also subject to a full underwriting. Although there are no discounts for non-smokers, there is a 10% discount when both husband and wife apply at the same time.

Additionally, the Desjardins policy allows the applicant to select both their benefit period and their monthly benefit elimination period, giving them full control over their own financial destiny. The insured will receive their monthly benefit tax-free once they are either diagnosed with a cognative impairment, such as Alzheimer's Disease, or can no longer perform two or more of the six activities for daily living listed below:

• Bathing

• Dressing

• Toileting

• Transfering  

• Continence

• Eating

The following is a sample pricing scenario for a 70-year-old female: *(Remember, pricing is the same for smokers and non-smokers.)

A $2,000/month benefit, with a lifetime benefit period and a 90-day elimination period, is priced at $350.35/month.

If Long-term Care insurance seems to fit your needs feel free to visit our non-obligation, free, Long-term Care Instant Quote Page. If you're interested in more quotes from Desjardins, or other Long-term Care insurance carriers, please don't hesitate to call us at 1-866-899-4849.

Funny Insurance Commercials

Although the world of insurance may seem boring and rather conservative to the onlookers, We—agents, advisers, brokers - simply those who live in the world of insurance rates, quotes, and premiums—we know the truth! Insurance is an exciting and vibrant industry.

You may not have realized that insurance TV commercials are some of the funniest out there. We are constantly fishing for the best ones to share with you in our new series on funny insurance commercials. Enjoy the first couple from Sweden and Canada and feel free to submit your favourite insurance-related TV or print ad in the comments. (Funny Insurance Commercials continued...)

Life Insurance: Is it a Good Investment?

Life insurance can be a great investment,
but will it work for you.

Life insurance can be broken into two broad categories: Term Insurance and Permanent Life Insurance policies. Term insurance policies generally cover you for a temporary period of time, e.g. 10 or 20 years. Permanent policies on the other hand, can cover you for your lifetime.

Permanent policies can be further sub-divided into three additional categories: Term 100, Universal Life and Whole Life. The latter two policies have several variations and a qualified independent broker can find the best fit that's right for you.

The primary difference between Whole Life and Universal Life is that on a Whole Life policy, the investment component is built into the premium, but on a Universal Life policy it is separate. In addition, Universal Life policies offer a wider variety of investment options.

The number one quality of any life insurance policy is making sure it fills your need. Assuming your needs are met and a permanent policy is within your budget, the next question is whether it's a sound investment?

Opinions on this subject vary, in part because life insurance as an investment is a very misunderstood topic. The following are the advantages and disadvantages of using life insurance as an investment:

Advantages

• Proceeds within the policy and the Maximum Tax Actuarial Reserve (MTAR) limits grow on a tax sheltered basis. Whole Life policies set the premium, so as not to exceed the MTAR limit, and Universal Life policies set a maxium premium, which keeps the MTAR limit in mind.

• The investment portion on an increasing death benefit Universal Life Policy and the dividends on a Whole Life policy are added to the face amount and are paid out on top of the policy face amount tax free.

• You can use the investment component on a permanent policy to pay for future premiums, allowing you to pay future premiums with pre-tax dollars, rather than after-tax dollars.

• Many Universal Life policies have minimum investment rate guarantees in excess of 4%. This is a great feature for the risk adverse investor in today's low interest rate environment.

Disadvantages

• Many permanent policies have surrender penalties if the plan is cancelled within the first few policy years.

• Permanent policies are generally an inadvisable investment if you don't  have a permanent life insurance need because you'll be paying a higher mortality charge for the life insurance.

If you would like more information, or would like to receive a customized quote, please don't hesitate to call our office at 1-866-899-4849 or visit our Whole Life or Universal Life quote pages.

Long-Term Care Insurance Underwriting

Applying for Long-Term Care?
Know what the underwriters
are looking for.

The underwriting criteria for Long-term Care insurance can be significantly different than for life insurance. Life insurance looks at mortality risks such as heart disease, build or lifestyle, but Long-term Care looks at mobility and cognitive issues. These factors can significantly increase the likelihood the insured will require care. The list below outlines some of the issues an underwriter will consider when evaluating a Long-term Care application:

• Cognitive Status - The applicant's ability to think, perceive, learn, remember and acquire knowledge.

• Chronic Illness - A persistent, prolonged or continuing illness requiring long-term treatment.

• Medical History - Some medical histories may indicate a need for further care, such as those with osteoporosis or a history of falls and fractures.

• Multiple Medical Problems - Medical issues that when taken together, can significantly impact the applicant's overall health to more of a degree than one problem alone, like diabetes with heart disease.

• Chronological vs. Physiological Age - This is if there is a significant difference between the applicant's chronological and physiological age. An applicant may look older than the age stated on their application.

• Frailty - This factor may be a signal that relatively minor accidents and illnesses may result in major health issues later on.

Secondarily, the insurance provider will look at the following factors that may contribute to the applicant's overall independence:

• Working full-time or part-time

• The health of the applicant's spouse

•  Family and friends are already living in the household

• Volunteering at various clubs and/or organizations

• Participating in hobbies and activities outside the home

• The applicant's ability to drive

• The applicant's ability to transfer or travel without accompaniment or assistance

In many ways, Long-Term Care insurance is easier to qualify for than Life insurance. Each insurance company's health criteria is different, so it's important to speak with an independent broker who specializes in Long-Term Care insurance. You can also get a free, no obligation quote from our Long-Term Care Instant Quote Page, or feel free to call us at 1-866-899-4849.

Great West Life’s Child Critical Illness Plan

Protect your child's future with Great
West Life's Child Oasis

Great West Life has a unique Citical Illness insurance plan for children "Child Oasis". It's designed to provide families with the financial resources necessary to support the recovery and care of a child with a critical condition. It also helps insure their future insurability. Some of the features and optional benefits of the Child Oasis plan are the following:

• A lump sum benefit of ranging from $10,000 - $250,000

• Coverage for 24 critical conditions, including five exclusive to childhood.

• Medical support services and resources from Best Doctors.

• A conversion feature at age 25.

• A return of premium at expiration (This is an optional benefit rider).

The covered critical illnesses in the Child Oasis plan are the following:

• Aortic surgery

• Aplastic anemia

• Bacterial Meningitis

• Benign brain tumour

• Blindness

• Cerebral Palsy (childhood-related congenital disability)

• Coma

• Congenital heart condition (childhood-related critical health condition)

• Coronary artery bypass surgery

• Cystic fibrosis (childhood-related congenital genetic disease)

• Deafness

• Heart attack

• Heart-valve replacement

• Kidney failure

• Life-threatening cancer

• Loss of Limbs

• Loss of speech

• Major organ failure on waiting list

• Major organ transplant

• Muscular dystrophy (Childhood-related congenital disability)

• Paralysis

• Severe burns

• Stroke

• Type 1 diabetes mellitus (childhood-related critical health condition)

We would be happy to provide additional details on Great West Life's Critical Illness Programs, along with providing quotes from other leading Critical Illness carriers in Canada. You can also get a free, online quote by visiting our Critical Illness Instant Quote Page, or call us at 1-866-899-4849.

A Closer Look: Long-Term Care Insurance

Manulife's 'Shared Coverage Option'
is just one way you and your spouse
can live out your twilight years.

Nearly half of all Canadians over the age of 65 will need some sort of long-term care.

While the government will cover some of these costs, there are limits not only to how much they will cover, but also the types of expenses they will cover. This is compounded by increasing government cutbacks on health care. In B.C., 4,400 MRIs will be cut in Victoria to cover a $45 million shortfall, while Vancouver is considering cutting more than 6,000 surgeries to make up for its own $200 million deficit. It's only a matter of time before Ontario residents will be feeling the pinch. The government also doesn't pay for private facilities, which can add up to thousands of dollars and erode a senior's financial nest egg.

Long-term care insurance provides coverage when you need it most. Depending on the provider, the received benefit can be a tax-free daily or monthly benefit and coverage can be set up where income is received either for life, or a specific period. Many plans reimburse expenses, while others allow the insured to spend the money however they wish. The latter gives the insured the flexibility to select the care that's most convenient and suitable for their needs. They can use the money to help with ongoing care or to cover certain medical expenses that may only be partially subsidized by OHIP or a private health plan. Benefit amounts can range anywhere from $500/month up to an excess of $8,000/month.

About two years ago, Manulife introduced a unique Shared Coverage option on its Long-Term Care plan for couples (married or common law). This helps support quality care for one, or both partners. The Manulife plan provides a monthly income, whether the care is at the insured's home or at a care facility.

Most companies only have premium guarantees on the first five policy years. Therefore, in subsequent years, the premiums can increase significantly, but this would have to happen on a class wide basis.

You can get a free online quote by visiting our Long Term Care Instant Quote Page, or please call us at 1-866-899-4849.         

O.M.A Group Life Insurance vs. Individual Life Insurance

If you're a doctor
O.M.A Coverage is there,
but is it the best?

O.M.A. stands for the Ontario Medical Association and they have been offering life insurance since 1956, underwritten by New York Life. These plans fall into two categories, a Term Plus 75 plan, which is available to members under the age of 60, and the Term Life plan, which is available to members 60 to 69.

The Term Life Plus 75 plan has two unique features: a portion of the coverage (10%) is paid up for life by the age 75 and the coverage automatically increases by 10% a year, for up to 10 years. Best of all, no medical test is needed to qualify for the 10% increase.

(O.M.A Group Life Insurance vs. Individual Life Insurance continued...)

Group vs. Individual Insurance

Manulife's individual life policy
has an optional rider for your children.

Many employees are enticed into buying optional group insurance to supplement their individual life insurance coverage. They often are mis-informed into thinking that this optional group coverage will give them a lower rate and better value, but the reality is, in most instance group coverage is actually more expensive than equivalent term life coverage without the added benefits of an individual life policy. Below we have outlined the difference between an optional group insurance policy and an individual life insurance plan:

(Group vs. Individual Insurance continued...)

Steps to Take If You’re Declined for Life Insurance

Got Declined? We can help.

Getting declined for life insurance can be a frustrating and discouraging event. However, the first thing to assess the moment you get declined is why you got declined.

Most insurance companies will not release this information to your agent or broker and will request that you sign a letter allowing them to release the information to your doctor. Once you find out why you were declined, speak to a broker who specializes in insuring the hard to insure. Some conditions, such as elevated blood sugar levels or high blood pressure can be declined on a temporary basis, i.e.once the condition is improved and stable, the insured will likely qualify for traditional coverage.

In the event that traditional life insurance coverage is unavailable, there are a variety of Simplified Issue insurance policies. Simplified Issue policies are life insurance policies that are available without a medical. These plans have become increasingly competitive in recent years, so the following factors have to be considered:

1. Pick a plan where you can answer "No" to as many health questions as possible - A plan where there's only two or three health questions will generally be more expensive than a plan with 15 to 20 health questions. The more health questions you can answer "No" to, the better off you will be.

2. Assuming you are a non-smoker, find a place that offers discounts to non-smokers - Many Simplified Issue plans, price smokers and non-smokers at the same rate. By selecting a plan that distinguishes between smokers and non-smokers, you will pay a lower premium.

3. Find out if coverage takes effect from day one, or if there's a two-year waiting period - Many Simplified Issue plans have a two-year waiting period where, if the insured passes away by non-accident in the first two years, it's a return of premium plus interest. Both Assumption Life and Canadian Protection Plan offer a Simplified Issue plan that protects the insured from day one.

4. Work with an independent broker who has experience dealing with the hard to insure - LSM Insurance has been working with the hard to insure for over 16 years and we survey the marketplace to find the best fit at the best price.

You can get a free non-medical quote by visiting Canada's Non-Medical Life Insurance Experts.

A Unique Insurance Solution for Self-Employed Business Owners

The hustle never stops
when your self-employed,
let an insurance plan
take some pressure off.

As a business owner myself, I know how hectic and stressful running your own business can be sometimes. One day falls into the next and certain projects get neglected. You count more and more on your family's support and they count more on more on you as a provider. One unexpected injury, illness or death is all it takes to cripple your business and flush your family's future down the tubes.

At LSM Insurance, we've been working with self-employed business owners for over 16 years.  We know your time is limited, that's why we take several steps to make sure the process is as easy and convenient as possible while you get, both the best plan and the best rate.

1. We've created an online Needs Analysis Calculator, which allows you to assess your current insurance needs in mere minutes. The calculator looks at your current assets and determines whether they will be sufficient to cover family's liabilities and cash needs, in addition to replacing your income when you die. Click the link and ask yourself, how much insurance do you need?

2. We work with over 15 insurance carriers to make sure you get the best possible rate. You can get an instant quote via our website, or you can call us at 1.866.899.4849. We are also happy to arrange a one-on-one meeting with an independent broker in your area. The bottom line -- our goal is to make considering insurance as easy and convenient as possible.

3. We provide unique solutions for business owners. We realize that self-employed individuals have different needs than salaried employees. We can create a plan as unique as your business, because we can customize a plan that factors in your type of business, budget, lifestyle and family needs. We can create indvidual insurance solutions for life, disability, critical illness or health and dental insurance. If you like, we can even combine all of these coverages into one program. We can also build a plan that covers your whole family.

4. We make sure your plan stays the course with your business. As your business grows, or contracts your needs change. We make sure your insurance program can adjust to any business environment.

If you have any questions, please do not hesitate to call us at 1.866.899.4849 or you can get an instant quote here.

Corporately Owned Life Insurance

Considering corporately owned?
We can lay it out clear.

Personally owned, or corporately owned, that is the question, especially if you're a business owner considering the purchase of life insurance. Life insurance is an important piece of any business and can be a tremendous asset to your business in the following ways:

• Key Person Insurance - In the event that the loss of a key person would mean a monetary loss for the company. In this situation, the corporation is the owner and beneficiary.

• Buy/Sell Insurance - Can be used to help settle a buy/sell agreement between two or more partners. In this instance, the corporation owns the policy on the shareholders and on the death of a partner, the corporation can redeem his or her shares. There are at least five ways to set up buy/sell insurance, which I will discuss in a later article.

• Estate or Succession Planning - This will help fund the transfer of shares to charity, family, or other business partners. In this situation, you need to be aware of the rules regarding taxable benefits when the insured is a shareholder vs. an employee or when the beneficiary is a spouse, rather than the corporation.

• Taxes Payable - Life insurance can be used to offset tax liabilities on death, which negates the need to sell your assets at an inopportune moment. The proceeds will then be typically deposited into the Capital Dividend Account (CDA) for further disposition to shareholders tax free.

• Charitable Bequests - Finally, life insurance can insure that a charity will receive a designated amount of money.

(Corporate Owned Life Insurance continued...)

Which Insurance Advisors will Prosper in 2010 and Beyond?

I'm predicting the future
of the insurance business.

The insurance industry has changed immensely over the last ten years and will continue to do so over the next decade. It may seem like the domain of a fortune teller, but I guarantee that insurance advisors with the qualities below will be best equipped to survive these changes.

They're insurance expertise will be greatly enhanced by strong business acumen - In the event that the advisor does not have a strong business background, he or she must align themselves with an organization which provides this strong back end support.

They will be independent advisors and not captive agents - The internet has vastly changed the way insurance advisors do business, Insurance advisors offering poor pricing will be quickly exposed and flushed out. The internet offers instant pricing information to consumers, so it won't take them long to discover when a captive agent is offering an uncompetitive plan. Independent brokers scour the marketplace for the best possible value. Captive agents are generally limited to working for their parent company an often offer an incomplete product shelf. See this video for more secrets of captive agents.

They will be able to respond in a timely manner - Consumers will want information at a faster rate in the coming years. Advisors who can't deliver in a timely manner will be left behind. Advisors will not need to be on 24 hour call, but they will need a support team who can provide immediate response when they are unavailable.

They will specialize in niche markets - By specializing in a niche market, advisors can become reputable and recognized experts in their area of focus. They will also be able to form alliances in their non-specialized areas. This helps build a fence around their existing clients and is an excellent source of incoming referrals.

They will be able to motivate themselves and their support team to continually improve the way they do business - Change will continue to move at a faster rate and top tier advisors must be able to create mechanisms, which allow them to constantly improve the way they do business.