Life Insurance FAQ

  1. What is Term insurance?
  2. Why should I buy Life insurance?
  3. Is there a time limit for the beneficiary for claiming an amount after the an insured dies?
  4. How much Life insurance do I need?
  5. How our insurance brokers paid?
  6. Can I get Life insurance without a medical exam?
  7. Can I get Life insurance if I’m sick?
  8. How do I know my Life insurance policy will pay out?
  9. Should I buy Life insurance online?
  10. Is Mortgage insurance through the bank a rip-off?
  11. How is Term insurance different from Whole Life insurance?
  12. What is Universal Life insurance?
  13. Is Life insurance tax-free?
  14. Why should I buy from LSM Insurance?
  15. How long has LSM Insurance been in business?
  16. How can I get in contact with LSM Insurance?
  17. Hi: I am a canadian, and recently I have joined the Australian army. I will be deployed to Afghanistan (War zones) for about 8-10 months in the next few years. Could you let me know if there are any term-life (or accidental life) insurance policies that would cover war-zone death. If so, could you provide me with term-life quotes for $250,000 and $500,000? I am 31 years old, healthy.
  18. 58...male... rarely smokes cigarettes (ie last 1 was several months ago and was just 1)... has had a Hep C diagnosis earlier but current bloods show everything looks fine. Recommendation?
  19. Can you borrow money on a term life insurance?
  20. Does Empire Life Insurance pre pay the full amount of the policy in cases of terminal cancer?
  21. I have a policy that is in my former married name. Also the address, phone# etc are incorrect. The representative is no longer with the company. The 20 year renewal is 2012. How do I change my information?
  22. How do I change my address?
  23. I'm waiting for a claim that's coming through the mail I was told by the agent it would be here in two and a half weeks but a month has passed. How can I get information on its whereabouts
  24. In Canada, I've heard that an ex-spouse cannot benefit from the life insurance of their divorced spouse, even when they are the designated beneficiary. Is this true?
  25. How can I change my beneficiary?
  26. I live in Canada and have a whole life insurance policy from a US Co. (for verious resons it made more sense to take a US policy)is this policy considered an exempd policy?
  27. hi I am a CANADIAN but working and staying with my family in UAE for last 5 years. Can I buy life insurance, disability insurance and critical illness from Canada? Pls advise
  28. will insurance company pay if the insured died outside canada? is there any law to support insured about this case?
  29. will insurance company pay if the insured died outside canada? is there any law to support insured about this case?
  30. I have a term policy, does it just expire if i do not renew or do I have to cancel it? Can it be renewed without me signing any documents?
  31. Will I be notified when my policy is going to expire and my rates change?
  32. Can I pay my life insurance premium by instalments? If so, how many instalments can be allowed?
  33. I had a few questions with regards to coverage on Life Insurance plan from Canada Life. if one takes the plan in Canada and later moves to an international location for e.g. Asia, would the 1)insurance coverage still be valid internationally and 2)If the person passes away in the international location, will the family still be able to claim the money out?
  34. What does banded 20 year level term to age 100 plan type mean. Does coverage stop in 20 years or does it continue until age 100
  35. Hello, My wife is 25 y/o healthy ns/nd. what type of life insurance should i be looking at. also i am looking in the range of 500,000 to 1,000,000. what type of monthly premiums would i be expecting. a further question is can i buy life insurance from the u.s. even though i live in canada.
  36. Ten Years ago I donated one of my kidneys to my wife. Policies we had at that time stayed, but when recently I tried to increase my policy (with Manulife - group plan with engineers) they turned me down and basically stated that they would not even consider my wife. We are both healthy otherwise and live normal lives, yes we do se specialists to make sure all is well. Any suggestions, other than policies with no med q’ns?
  37. where can I get a copy of my policy, I lost my copy and I can't get in touch with my agent
  38. Hi, my mother-in-law died two weeks ago. How can I claim the insurance if I don't know the policy number is correct or not?
  39. What if the insured person was diagnosed with Cancer after being with the Insurance company for over 3 yrs? Does the insured person can claim the whole amount of the policy he/she have been insured for? And if not how much the insured person can claim at the insurance company in view of this scenario?
  40. Am I covered if i commit suicide after having the policy for more than 2 years?
  41. How long does it usually take for a beneficiary to get the death claim even after the contestability period is over and the requirements were already submitted?
  42. If I have been paying approximately 90.00 per month for the past 12 years how much (ball park) am I allowed to borrow against this term policy and do i have to pay it back or is there any type of penalty? How do I go about borrowing against this policy of possible?
  43. what is account value on a universal life insurance policy
  44. While working in the US I took out $1,000,000 5 year term policy. I subsequently have permanently relocated relocated to Canada. My question is this: Are the proceeds from the policy taxable by the US upon my death?
  45. 15 years ago my then husband bought insurance policy and named me my son and his daughter from previous marriage as beneficiaries . I have been paying the premuim through my bank account. We divorced five years ago. I continue paying for the premuim. He never change the beneficiaries. His current wife hates me. What are my rights to claim this policy and can the wife claim this policy even she is not named beneciary.
  46. If a person has quit smoking for a year, does it make a difference in the annual premium.
  47. Can a former spouse buy and pay for an insurance on the life of her former husband, on whom she does not depend financially? (This is in Ontario, Canada)
  48. Is there a certain amount of time a policy needs to be in effect before full death benefits are paid?
  49. Hello I'm looking for life insurance policy in Canada that: 1) Requires no medical exam, 2) Can be paid up in 10 years or less and, 3) May be purchased without going through a broker. Thanks for your help
  50. When a blood test is done what are they testing for? Drugs? medications? medical conditions?
  51. My husband and I have been paying into a life insurance policy for just about 10 yrs now, & it is coming up for renewal. We have it basically for our mortgage, anyway, I have found out that I have hep C and have a few questions. We wanted to do a new policy so we have something afterwards, like after age 75, so if we redo a new one we have to do a health test. My hep C is just there, it is not making me sick or anything like that, but we are not sure what to do. Do you have any advise? The price has gone up drastically, what will it be like now? Thanks for your help!
  52. What are the common illness or medical condition a person can be declined with such regular life insurance application?
  53. My spouse and I are considering taking the cash value (17,500) from our policies after 19 years and paying off some debt.We can then purchase cheaper term insurance.I`ve read that if the cash value is equal to or less than premiums paid then its tax free,true?
  54. I am a lawyer - sole practitioner - I need long term disability but but was told I was uninsurable because of all my medical conditions. Is there anyone who will give me long term disability?
  55. My spouse and I have had term life insurance policies for a number of years with the same company. We also have our home and car insurance with them. He recently increased his coverage because he was turning 60 and we were told the rates would rise after his birthday, but I have not. I was diagnosed with cancer 3 years ago and am now in remission. Someone told me that my term life will no longer pay out because of my cancer diagnosis and that I should stop making payments. Is this true?
  56. My term life expires when i turn 65 in three years.. What happens then? I pa y $105 a month for 100k death benefit..what happens then.am i just simply dropped and become uninsured I transferred from my employers group to personal and did not need a health exam..i have hi blood pressure type 2 diabetes and hep c
  57. I found an insurance co with a much lower premium than the one I am paying. When I called my inusrance company to cancel my policy so I could buy from th enew company with the lower rate, they told me I could not. In Canada you are not allowed to change companies. Is this true?
  58. My wife is 64and she had a whole life policy of $30.000 which was bought in 1989. As per the broker it has a cash value of around $10.000 next year if she wants to cash it next year is there any tax she has to pay? And if she cashes the whole amout will that consider as income?
  59. My mom and dad are over 75 can life insurance be purchased for them?
  60. I got declined due to medical reasons...but im not sick.
  61. Is there a way to notify Canadian Insurance companies if you think someone has fraudulently submitted an application for Life Insurance coverage without the insured's consent?
  62. My husband quit smoking "cigarettes" 7 years ago. He occasionally chews nicotine gum. When applying for insurance would he only be considered at "smokers rates" ? Thank you
  1. What is Term insurance?

    Term insurance policies cover the insured for a stated term. The most common type of term policies are Term 10 and Term 20 policies. For example, on these plans the premiums are fixed for 10 years or 20 years and they rise substantially as the insured ages. Most Term policies are renewable and convertible, meaning the coverage can be renewed and/or converted to a permanent plan without a medical.

  2. Why should I buy Life insurance?

    Life insurance can be used for a number of reasons. Below is a sampling of six of these, but there are many more:

    1. Income Replacement
    2. Paying off a mortgage or a line of credit
    3. Final Expenses
    4. Emergency Fund
    5. Money used to fund your child’s education
    6. Estate preservation and creation. (Life insurance is seen by many as an unselfish act because the money is not used for the insured, just their loved ones.)
  3. Is there a time limit for the beneficiary for claiming an amount after the an insured dies?

    So long as the information on the initial application is correct there should be no time limit on collecting the claim. The insurance company will need a death certificate and the beneficiary(s) will need to sign a claimants statement.

  4. How much Life insurance do I need?

    We have an online calculator that makes this process easy right here: http://lsminsurance.ca/calculators/canada/needs-analysis.html. The formula breaks down as, Existing Assets, (including all the life insurance that’s currently in-force) minus Current Liabilities and Income Replacement Needs, equals The Amount of Insurance Needed for Adequate Coverage.

  5. How our insurance brokers paid?

    Life insurance brokers are generally paid a commission by the insurance company for each policy sold. This cost is built into the premium, so the consumer does not pay any type of surcharge. In fact, buying life insurance via direct distribution channels (where a commission is not generated) is often more expensive because the fixed cost of employees salaries and necessary infrastructure is higher than the distribution costs under the commission-driven broker network.

  6. Can I get Life insurance without a medical exam?

    Yes, there are an increasing number of non-medical life insurance providers in Canada. The two types of non-medical life insurance policies are, Simplified Issue coverage and Guaranteed Issue coverage.

  7. Can I get Life insurance if I’m sick?

    Yes, life insurance is available to people who are sick. Depending on the type of illness, the insured may still qualify for traditional life insurance plans that require medical tests and health questions. Otherwise, non-medical life insurance plans fall in the two categories mentioned above: Simplified Issue insurance (where there are no medical tests and three to 12 health questions) or Guaranteed Issue coverage (where there are no medical tests and no health questions).

    Generally speaking, traditional life insurance offers a more affordable life insurance plan than Simplified or Guaranteed Issue coverage. Most Guaranteed Issue policies also have a two-year waiting period on the death-benefit, so if the insured dies in the first two years, the plan’s payout is limited to a return-of-premium plus interest.

    Simplified Issue plan coverage can often start from day one, and the face amounts, along with the premiums, are lower than those of Guaranteed Issue life insurance. Guaranteed issue plans have higher premiums and the death benefit is often limited to a return of premium, plus interest for all non-accidental deaths in the first two years.

  8. How do I know my Life insurance policy will pay out?

    Life insurance policies generally have a two-year contestability period, which means the insurance company can contest the claim for the first two policy years if there is misrepresentation on the application. The insurance company can also contest claims for the life of the policy in the event of fraud.

    LSM Insurance is very active all throughout the claims paying process. We walk the claimant through any necessary paperwork and follow-up with the insurance carrier to make sure the process is as seamless and as trouble free as possible.

  9. Should I buy Life insurance online?

    Generally, we don’t recommend it. Most online life insurance providers offer their own proprietary product. Whereas, an independent broker offers insurance from a variety of carriers. Life insurance can be complicated and can play a huge role in your family’s financial future. We believe that working with an honest and reliable independent broker will ensure you make the right decision.

  10. Is Mortgage insurance through the bank a rip-off?

    In most instances, individual life insurance offers a much better value than mortgage insurance through a lender. Individual life insurance policies provide level coverage, the plan is portable, if you decide to switch homes or move to another bank, and the insurance company allows you to choose your own beneficiary. There are also substantial discounts to non-smokers and people who have a healthy lifestyle. Mortgage insurance through the bank offers declining coverage, the bank is the insured’s beneficiary and there are generally no discounts given to non-smokers or people with a healthy lifestyle

  11. How is Term insurance different from Whole Life insurance?

    Term insurance premiums start off low, but increase as the insured ages. Term insurance policies do not have a cash value. Whole Life insurance policies have a higher initial premium, but the coverage is level throughout the insured’s lifetime. Whole Life plans can often be paid-up in a limited number of years and have a built-in cash value.

  12. What is Universal Life insurance?

    Universal Life insurance is an unbundled form of Permanent Life insurance, which means the life insurance and the investment component are separate. Most insurance companies allow the insured to choose from a wide variety of investment options and the investments can grow on a tax-sheltered basis.

  13. Is Life insurance tax-free?

    Life insurance death-benefits are tax-free. the premiums on life insurance policies are generally paid with after-tax dollars, rather than pre-tax dollars. However, with Permanent Life insurance policies, there is cash value that grows (within the tax exempt limits of Canada) on a tax-sheltered basis. This money can then be used to offset future premiums. The net-effect premiums are then once again being paid with pre-tax dollars, rather than after tax dollars.

  14. Why should I buy from LSM Insurance?

    LSM Insurance is committed to providing innovative and reliable insurance solutions. We have been in business for over 17 years and work with over 13 different insurance carriers that provide a whole host of term and permanent life insurance programs. We take a holistic approach when looking at your insurance needs and always try to exceed your expectations. We are also very active when you need us most – especially during the claims paying process – we walk the claimant through any necessary paperwork and follow up with the insurance company, making the process as seamless and as trouble free as possible.

  15. How long has LSM Insurance been in business?

    LSM Insurance has been in business for over 17 years. We are located in Markham, Ontario, but are connected to brokers across Canada.

  16. How can I get in contact with LSM Insurance?

    Feel free to call us at 1-866-899-4849, e-mail info@lsminsurance.ca or if you’re looking for a quote, you can get one right away using our Instant Quote System (http://lsminsurance.ca/application).

  17. Hi: I am a canadian, and recently I have joined the Australian army. I will be deployed to Afghanistan (War zones) for about 8-10 months in the next few years. Could you let me know if there are any term-life (or accidental life) insurance policies that would cover war-zone death. If so, could you provide me with term-life quotes for $250,000 and $500,000? I am 31 years old, healthy.

    Thanks for the note. You will likely be best suited by a simplified issue policy. Please see response from Canada Protection Plan one of our suppliers.

    "CPP will not discriminate against anyone in the armed forces."

    Let me know if you need anything else.

  18. 58...male... rarely smokes cigarettes (ie last 1 was several months ago and was just 1)... has had a Hep C diagnosis earlier but current bloods show everything looks fine. Recommendation?

    Depending on the doctors report you may qualify for a traditional life insurance policy but it would likely being issued with a modified premium a simplified plan would also be an option

  19. Can you borrow money on a term life insurance?

    Most Term life insurance policies do not have a cash value. You can only borrow against the cash value of a policy you can not borrow against the death benefit.

    The one exception is most life insurance companies will allow the insured to borrow against a death benefit if the insured is diagnosed with a terminal illness i.e. less than 1 year to live.

  20. Does Empire Life Insurance pre pay the full amount of the policy in cases of terminal cancer?

    No company will pay the full face amount in the event of a terminal illness. It will depend on when the policy was issued and the contract provisions usually if the insured is diagnosed with less than one or two years to live by a doctor the insurance company will advance up to 50% of the death benefit - the maximum is usually capped at $100,000. The attached article discusses the issue in more detail http://lsminsurance.ca/canadian-life-insurance-companies/2010/03/insurance-terminal

  21. I have a policy that is in my former married name. Also the address, phone# etc are incorrect. The representative is no longer with the company. The 20 year renewal is 2012. How do I change my information?

    You would have to contact your insurance company. The address and phone number they can likely change over the phone after they verify your details. The change of name would likely require some type of document to be signed - they would supply you with the form.

  22. How do I change my address?

    You can call you insurance advisor or the insurance company directl to update your address.

  23. I'm waiting for a claim that's coming through the mail I was told by the agent it would be here in two and a half weeks but a month has passed. How can I get information on its whereabouts

    You can call the insurance company directly if the agent is not being responsive

  24. In Canada, I've heard that an ex-spouse cannot benefit from the life insurance of their divorced spouse, even when they are the designated beneficiary. Is this true?

    Yes - you can name an ex-spouse as a beneficary on a life insurance policy. This is often done as part of a divorce agreement.

  25. How can I change my beneficiary?

    You would have to contact your insurance carrier or insurance agent to send you the necessary from. It's generally pretty straightforward you fill in who you would like as beneficary and sign off

  26. I live in Canada and have a whole life insurance policy from a US Co. (for verious resons it made more sense to take a US policy)is this policy considered an exempd policy?

    We are only licensed in Canada. But the policy should carry the same provisions as if you live in the US - assuming all questions were answered accurately.

  27. hi I am a CANADIAN but working and staying with my family in UAE for last 5 years. Can I buy life insurance, disability insurance and critical illness from Canada? Pls advise

    Thanks for the note. You would have to be residing in Canada when applying a life, disability and Critical Illness application.

  28. will insurance company pay if the insured died outside canada? is there any law to support insured about this case?

    Yes - the policy should pay out if you die outside Canada - assuming all questions were answered accurately and suicide was not commited in the first 2 policy years.

  29. will insurance company pay if the insured died outside canada? is there any law to support insured about this case?

    The policy should pay out if the application was completed truthfully and death was not related to suicide in the first two policy years. Undortunately we do not have any specific case law to refer you to.

    Thanks,

  30. I have a term policy, does it just expire if i do not renew or do I have to cancel it? Can it be renewed without me signing any documents?

    Most Term policies renew automatically. The insurance company would require you to sign a letter to cancel the policy.

  31. Will I be notified when my policy is going to expire and my rates change?

    Yes the insurance company should send you a letter notifying you of an increase in rates. Insurance companies also generally notify the broker of record of any major policy changes and he / she should also notify the insured. Having said that if your policy was bought direct and / or if your broker left the business this may not happen.

  32. Can I pay my life insurance premium by instalments? If so, how many instalments can be allowed?

    All Insurance Companies allow for monthly or annual payments. Some companies alaso allow quarterly or semi-annual installments.

  33. I had a few questions with regards to coverage on Life Insurance plan from Canada Life. if one takes the plan in Canada and later moves to an international location for e.g. Asia, would the 1)insurance coverage still be valid internationally and 2)If the person passes away in the international location, will the family still be able to claim the money out?

    Thanks for the questions 1) Yes your coverage would remain inforce as long as the policy is paid to date 2) Yes the claim would still be vaid and the funds would be paid out in Canadian dollars assuming all the initial application questions were answered correctly

  34. What does banded 20 year level term to age 100 plan type mean. Does coverage stop in 20 years or does it continue until age 100

    I think you are referring to 20 year term insurance renewable to age 100. This means the premiums are level for 20 years. After the 20 years the policy is guaranteed renewable to age 100 but the renewal rates will be significantly higher after the initial 20 years.

  35. Hello, My wife is 25 y/o healthy ns/nd. what type of life insurance should i be looking at. also i am looking in the range of 500,000 to 1,000,000. what type of monthly premiums would i be expecting. a further question is can i buy life insurance from the u.s. even though i live in canada.

    Thanks for the note. The premiums will depnd on the type of plan. Term plans start of lower and go up as you get older whereas Permanent plans start off higher and can remain level for life,

    You would have to be in Canada when you complete your application.

  36. Ten Years ago I donated one of my kidneys to my wife. Policies we had at that time stayed, but when recently I tried to increase my policy (with Manulife - group plan with engineers) they turned me down and basically stated that they would not even consider my wife. We are both healthy otherwise and live normal lives, yes we do se specialists to make sure all is well. Any suggestions, other than policies with no med q’ns?

    Thanks for the note. You or your wife may qualify for a Simiplified Issue plan. There are no medical tests and depending on the plan there are 3 to 12 health questions. You can get more details at http://lsminsurance.ca/life-insurance-canada/2010/02/simplified-issue

  37. where can I get a copy of my policy, I lost my copy and I can't get in touch with my agent

    You can get a copy from the insurance company. There is usually a charge of $25 to $50 for a duplicate policy.

  38. Hi, my mother-in-law died two weeks ago. How can I claim the insurance if I don't know the policy number is correct or not?

    Sorry to hear that. You would have to contact the insurance company or the broker (they can verify if the policy is in force) and let them your mother-in-law died. They will need a death certificate you can usually obtain this from the funeral home.

  39. What if the insured person was diagnosed with Cancer after being with the Insurance company for over 3 yrs? Does the insured person can claim the whole amount of the policy he/she have been insured for? And if not how much the insured person can claim at the insurance company in view of this scenario?

    No claim can be made on a life insurance until the insured dies. The applicant can apply for a Terminal Illness benenfit - most insurance companies require a letter from the insureds doctor saying he or she has less than 12 months top live. The money is paid out as advance on the death benefit and is generally limited to 50% of the policy face amoun. The maximum terminal illness benenfit usually ranges from $50,000 to $100,000.

  40. Am I covered if i commit suicide after having the policy for more than 2 years?

    Thanks for the question - I assume you are referring to a life insurance policy. Life insurance policies have a 2 year suicide provision so the policy would pay out after 2 years assuming there was no mistatements of fact on any of the application questions.

  41. How long does it usually take for a beneficiary to get the death claim even after the contestability period is over and the requirements were already submitted?

    The amount of time can range from a couple of days to several months. If the insurance company suspects foul play or fraud they will likely write the insured's doctor(s) for clarification.

  42. If I have been paying approximately 90.00 per month for the past 12 years how much (ball park) am I allowed to borrow against this term policy and do i have to pay it back or is there any type of penalty? How do I go about borrowing against this policy of possible?

    Most term policies do not have a cash value. You would have to contact your broker or the insurance company to see if your policy has a cash value - if it does you can generally just write the insurance company a letter with the request. As a rule of thumb you can borrow up to 9-% of a policies cash value.

  43. what is account value on a universal life insurance policy

    I think you are referring to the accumulation fund. The accumulation fund is the investment value of the policy. The accumulation fund and the cash value are not always equal the cash value is the amount the insured can actually redeem from his / her policy and is the accumulation fund minus any surrender charges and policy fees.

  44. While working in the US I took out $1,000,000 5 year term policy. I subsequently have permanently relocated relocated to Canada. My question is this: Are the proceeds from the policy taxable by the US upon my death?

    I would check with the insurance company you took out the policy with or a tax advisor. We are licensed in Canada and would not have the expertise to answer you US tax question.

  45. 15 years ago my then husband bought insurance policy and named me my son and his daughter from previous marriage as beneficiaries . I have been paying the premuim through my bank account. We divorced five years ago. I continue paying for the premuim. He never change the beneficiaries. His current wife hates me. What are my rights to claim this policy and can the wife claim this policy even she is not named beneciary.

    The policy owner controls the beneficiary designation. If there is an irrevocable beneficary they would have to sign off on any changes. Regards, LSM

  46. If a person has quit smoking for a year, does it make a difference in the annual premium.

    Yes non smoker rates are significantly less than smoker rates

  47. Can a former spouse buy and pay for an insurance on the life of her former husband, on whom she does not depend financially? (This is in Ontario, Canada)

    There has to be an insurable interest and the insured always has to sign the application and answer any necessary health and lifestyle questions

  48. Is there a certain amount of time a policy needs to be in effect before full death benefits are paid?

    Most life insurance policies in Canada pay out from day one - except in instances of suicide or if their is meaningful non disclosure on the application. Guaranteed issue policies (no health questions and no medical tests) have a 2 year waiting period on the death benefit and some Simplified Issue policies (3 to 12 health questions and no medical tests) have a two year waiting period on the death benefit.

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

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

  50. When a blood test is done what are they testing for? Drugs? medications? medical conditions?

    The insurance company tests for a variety of things. Including blood sugar level and cholesterol. They can also test for drugs

  51. My husband and I have been paying into a life insurance policy for just about 10 yrs now, & it is coming up for renewal. We have it basically for our mortgage, anyway, I have found out that I have hep C and have a few questions. We wanted to do a new policy so we have something afterwards, like after age 75, so if we redo a new one we have to do a health test. My hep C is just there, it is not making me sick or anything like that, but we are not sure what to do. Do you have any advise? The price has gone up drastically, what will it be like now? Thanks for your help!

    Thanks for the note. You existing Term policy likely has a conversion you should explore this option before looking into a new plan.

  52. What are the common illness or medical condition a person can be declined with such regular life insurance application?

    Some of the illnesses include a recent diagnosis of cancer, stroke, heart attack, uncontrolled diabities, high blood pressure or cholestrol. Insurance companies like to see illnesses are stable. Applicants with serious health issues may want to investigate Simplified Issue plans. These plans have a shorter series of health questions than traditional life insurance plan. Once the insured is declined for an application his/her options will become more limited.

  53. My spouse and I are considering taking the cash value (17,500) from our policies after 19 years and paying off some debt.We can then purchase cheaper term insurance.I`ve read that if the cash value is equal to or less than premiums paid then its tax free,true?

    The tax will be based on the adjusted cost base if the cash value is less than the adjusted cost base there will be no tax implications. You can get the Adjusted Cost base from the insurance company. You should definitely get approved for your term policy first before canceling your existing plan also keep in mind that term policies go up as you get older where as your existing policy may not increase on cost. There may also be other riders or provisions in the plan.

  54. I am a lawyer - sole practitioner - I need long term disability but but was told I was uninsurable because of all my medical conditions. Is there anyone who will give me long term disability?

    Thanks for the note. There are some speciality carriers you may want to consider. There are also No Medical Injury Only Long Term Disability polices. You can email us at info@lsminsurance.ca or visit our disability insurance quote page http://lsminsurance.ca/application/ontario/disability.html

  55. My spouse and I have had term life insurance policies for a number of years with the same company. We also have our home and car insurance with them. He recently increased his coverage because he was turning 60 and we were told the rates would rise after his birthday, but I have not. I was diagnosed with cancer 3 years ago and am now in remission. Someone told me that my term life will no longer pay out because of my cancer diagnosis and that I should stop making payments. Is this true?

    Thanks for the note. Unless you are required to resubmit medical evidence at renewal. A life insurance claim would be based on health and lifestyle information at the time of application.

    There if the policy is good standing at the time of death and the initial policy questions were answered truthfully the policy should pay out.

  56. My term life expires when i turn 65 in three years.. What happens then? I pa y $105 a month for 100k death benefit..what happens then.am i just simply dropped and become uninsured I transferred from my employers group to personal and did not need a health exam..i have hi blood pressure type 2 diabetes and hep c

    You would have to see if your policy has a conversion option if it does not your coverage would expire. You could also check if it has a reduced paid-up value

  57. I found an insurance co with a much lower premium than the one I am paying. When I called my inusrance company to cancel my policy so I could buy from th enew company with the lower rate, they told me I could not. In Canada you are not allowed to change companies. Is this true?

    You can cancel a policy with written notice. If replacing a policy with a new one you should complete a replacement form but this is done for your protection.

  58. My wife is 64and she had a whole life policy of $30.000 which was bought in 1989. As per the broker it has a cash value of around $10.000 next year if she wants to cash it next year is there any tax she has to pay? And if she cashes the whole amout will that consider as income?

    The cash value is taxable on the amount over and above the adjusted cost base this amount is taxed as regular income you can get the adjusted cost basis from the insurance company

  59. My mom and dad are over 75 can life insurance be purchased for them?

    Yes we insure people 85 and under. Please feel free to contact us for a quote info@lsminsurance.ca or 1-866-899-4849.

  60. I got declined due to medical reasons...but im not sick.

    Sometimes insurance companies view risk differently than applicants. Someone could have had a heart attck a year ago and could feel perfectly healthy but the insurance company may view this health issue differently. Applicants who were declined for traditional life insurance still may qualify for no medical life insurance plans there are two types of no medical life insurance plans guaranteed issue plans where there are no health questions and no medical tests it's simplified issue plans where there a short series of health questions and no medical tests.

  61. Is there a way to notify Canadian Insurance companies if you think someone has fraudulently submitted an application for Life Insurance coverage without the insured's consent?

    Yes you can notify the compliance department of the insurance company. You can also notify the appropriate provincial insurance regulator.

  62. My husband quit smoking "cigarettes" 7 years ago. He occasionally chews nicotine gum. When applying for insurance would he only be considered at "smokers rates" ? Thank you

    This depends on the company. Most life insurance companies would qualify him as a smoker but some companies may not mention Nicorette or nicotine substitutes in terms of their non-smoking declaration. It's important to check the application wording very carefully.


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19 Comments

  1. Wendy Watmough 11/09/2010 at 7:39 pm

    I have been paying for years on a small death benefit for myself and husband. We have since separated and going for a divorce. I wish to keep paying the policy for him as I think they are connected. I am the beneficiary so would I still receive the policy when he passes away.

  2. LSM Insurance 11/09/2010 at 8:06 pm

    Thanks for the note.

    Yes, as long as the benefiary is not changed you would receive the proceeds from the death claim.

  3. Edna 03/07/2011 at 11:58 am

    my parents took out life insurance for 10,000 over 20 years ago she died 10 years ago but my father is still alive and is 87 years old and his insurance keeps going up, almost 400 a month now, in the past 10 years he has payed atleast 30,000 to his insurance is there a way we can cancel it and still recieve his insurance money.

  4. LSM Insurance 03/07/2011 at 12:07 pm

    Thanks for the question. It sounds like your father has a Term plan. On these plan the rates increase at each renewal. Most Term plans do not have a cash vaue but you should check with the insurance company or his broker.

  5. LSM Insurance 03/08/2011 at 3:44 pm

    Thanks for the note it sounds like your father has a Term plan where the premiums increase as the insured ages. I would check with the insurance company for specifics.

    If you cancel the policy you would not receive the insurance proceeds because the policy would not be in effect.

  6. CM 08/14/2011 at 11:02 am

    I have a 20 yr term policy costing 129$ per month for 250000 coverage that ends in 5years. I had a policy at age 19 that cost 19/mth for 25,000 with all the different agents and thier promises of better coverage I went from 19$ to 110$ for a 35000 life and 129$ fr the 20 yr term. Having lost my job and needing coverage I canceled the 35000 and kept the 250000 as my daughter was young and I a single older mother. Obviously, I feel I have been mislead but its done so…I now found work but at low income and still want to provide insurance. What should I do with this policy in 5yrs. I will be 60 and I don’t think my income will increase. I am a single parent and still want to provide coverage for my daughter if I can. If I switch to a life policy how much can it cost and can I do this.I wish I had never listened to that agent 15 yrs ago. I would have had something permanent to offer whereas now I can hardly afford the coverage but need to. Are there any decent agents still out there other than those who just want the commision!!

  7. LSM Insurance 08/14/2011 at 12:50 pm

    Unfortunately there are bad apples in every profession.

    The majority of insurance agents/brokers provide quality advice.

    Having said that you did receive bad advice. You would have been better keeking you Permanent coverage and supplementing it with additional Term coverage as needed.

    You could still likely convert part of your term coverage and keep the balance of term as is.

  8. Clark 08/25/2011 at 11:18 am

    Is the cash value build-up inside a life insurance policy taxable? I read somewhere that Canadian tax law places certain limits on growth or something. I’m a Canadian citizen living and working in the United States. I want to look into doing a Whole Life policy, but I’m concerned about the potential taxation of the cash value.

  9. LSM Insurance 08/25/2011 at 11:23 am

    The cash value on a Permanent life insurance policy is taxable to extent the cash value exceeds the adjusted cost base. The adjusted cost base is a somewhat compulated formula the insurance company can provide these figures.

  10. Mark 09/11/2011 at 1:38 am

    I am a small business owner and am the only ‘employee’. Can my business purchase life insurance on my and my families behalf, thus write off the premium as an expense, and still have the only beneficiaries be my wife and children? Or is the company the only allowable beneficiary?

    Thank you.

  1. LSM Insurance 09/11/2011 at 8:14 am

    If the company purchases the life insurance policy than the company is the owner and beneficiary.

    You could own the policy personally and if a bank requires the life insurance for business puposes and provides documentation regarding this you may be deduct your premiums for insurance purposes.

  2. Nelly 01/17/2012 at 9:24 pm

    Hi, my husband and I are planning to get life insurance but we are not sure which one. we are both 40 years old, no kids and non-smoker. I have friends who are insurance agents but in different companies- manulife and primerica. I need advise pls. Thanks

  3. LSM Insurance 01/18/2012 at 9:56 am

    Thanks for the note. The first step is to determine the amount of coverage you need or needs analysis calculator – see link below – can help. link to lsminsurance.ca

    The next step is to determine if you want Term (premiums start lower but go up as you get older) or Permanent coverage (premiums start higher but are fixed for life).

    Of course your budget will also play a role. Regards, LSM Insurance

  4. ken 03/06/2012 at 1:08 pm

    Wow! May be the most complete Life Ins. related FAQ I’ve seen; really well done.

    I may have missed it; but, you might want to say something about the CLU degree and how that is one of the best ways to really gauge the “expertise” of a life insurance broker or agent. Not the only way, just probably the best way.

  5. LSM Insurance 03/06/2012 at 3:55 pm

    Thanks for sharing your comments and your kind words.

  6. Scott 05/30/2012 at 11:38 am

    I have two policies. One says that the insurer reserves the right to change the premiums, but it doesn’t say when or by how much. Another one says the insurer reserves the right to change the premiums upon each five (5) year renewal, but again it doesn’t say by how much.

    Is this acceptable?

  7. LSM Insurance 05/30/2012 at 12:51 pm

    Thanks for the note. Yes many Disability and Long Term Care policies have non guaranteed premium. It’s less common in life insurance plans.

  8. MS 10/02/2013 at 3:00 pm

    If someone responds on their life insurance policy that they are a non-smoker (the absolute truth at the time), but that person (stupidly) takes up smoking 3 years later, is that person required to notify the insurance company? Will there be ramifications on a payout if it were to ever come to that? How is this situation typically handled?

  9. LSM Insurance 10/02/2013 at 3:19 pm

    Thanks the note. No the insured is not obligated to contact the insurance company. Their policy is based on their health details at the time of application. Similarly the insured would not have to inform the insurance if they subsequently became diabetic.

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