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Breaking Down The Cost of a Funeral In Canada

November 20th, 2017

There comes a time in everyone’s life when the subject of death has to be brought to the table. Nobody likes to think about it, let alone discuss the topic with their family, but putting off important decisions about final preparations will only make things more difficult for the loved ones you leave behind.

Making final arrangements ahead of time will take a lot of pressure off your survivors. Planning ahead lets everyone know what arrangements have to be made and how much it will cost, freeing them to deal with their grief without worrying about what to do next.

Costs and Arrangements

The cost can vary dramatically, depending on what you want. Eric Vandermeersch, founder and CEO of Basic Funerals, says after-death costs can be as low as $1,500 or as high as $20,000, with the average being around $8,500. He says the cost varies based on personal preferences, culture and values.

“It’s like saying I want to buy a car, what should I budget for,” Vandermeersch explains. “There are a lot of options. There are people looking for just the basics and there are people looking for more traditional ceremonies.”

These are some post-death arrangements you’ll need to consider. Prices are approximate and vary by city and province.

Death certificate ($15-$22) and registration ($55)

Every death must be legally registered before a death certificate can be issued. A death certificate is needed to apply for benefits, make an insurance claim and settle the estate. Costs for the certificate and registration varies by municipality and depends on the number of certificates reqested.

Transferring the body ($100 and up)

Transfer service fees vary based on how many times and how far the body needs to be moved. For example, the body may need to be moved from the place of death or transported to a cemetery or crematorium. You don’t necessarily have to use a professional transfer service unless the body needs to be moved out of the province. Obviously, this will cost much more.

Shroud, casket or urn ($0-$3,000 and up)

Caskets and urns come in a wide variety of styles – and prices. From simple to elaborate. Or you can choose the no-cost option – a shroud. Some cemeteries allow you to bury the body in a simple shroud and the crematorium may let you use your own container for the ashes. Even though the funeral home will try to sell you a casket or urn, you don’t have to buy from them. You may be able to find a better deal elsewhere.

Preparing the body ($125-$525)

Body preparation consists of bathing and grooming (applying make-up, if you like), then wrapping or dressing. You can also have the body embalmed. Although embalming is recommended, it may not be legally required in your province.

Ceremonies (funeral, visitation, memorial) plus staffing fees ($2,000 or more)

According to Vandermeersch, the sky is the limit when it comes to ceremonies in funeral homes, churches or chapels. “These costs go up because there are more staffing fees to consider, especially when a casket is involved, and then you might have a reception with food.” Of course, formal services aren’t mandatory. Family members can have an intimate service in their own home without a special license or permit as long as they’re not being paid.

Burial plots and niches ($1,000 or more)

Family plots and side-by-side plots are generally highly desirable, making them more expensive, however single plots are often quite pricey, as well.

Cremation or burial services ($1,000 and up)

Vandermeersch says the number of Canadians choosing cremation is rising, especially direct cremations, the cheapest option.

Average Funeral Costs Per Province

British Columbia – $1,000 to $12,000. The professional service fee funeral directors charge usually covers transportation of the deceased, death certificate, registration and all the necessary documents.

Alberta – $4000 to $12,000, with the majority costing about $6000.00 – $8000.00.

Saskatchewan – The average cost is about $7,775. This includes a traditional funeral, casket and vault. Cemetery costs, the plot, opening and closing the grave and a grave marker can easily cost another $1,500 to $2,500.

Manitoba – A traditional burial (including a casket, funeral and cemetery costs) averages about $7,000 to $10,000. A $100 surcharge applies to graves dug during the winter.

Ontario – $1,500 to $20,000. Personal preference plays a big role in how a funeral will cost.

Quebec – A typical traditional funeral and burial costs about $9,000.

New Foundland and Labrador – Average funeral costs about $8,000, not including cemetery costs, plot, marker or opening and closing the grave, which can all add up to about another $1,500 to $2,500.

Nova Scotia – The average cost of a traditional funeral is $10,495.

New Brunswick – Funerals in New Brunswick cost about $9,000.

Prince Edward Island – Typical funerals and burials are about $9,000.

Funeral Costs Around the Globe

Tokyo, Japan – $1,629 to $80,393 (¥200,000 to ¥10 million)

Mexico City, Mexico – $482 to $11,568 (7,500-180,000 Pesos)

New York City, United States – $8,000 to $10,000

Toronto, Canada – $1,135 to $9,727 ($1,400 – 12,000 CAD)

London, United Kingdom – $7,433 (£4,836)

Beijing, China – $6,905 (42,837 Yuan)

Rome, Italy – $6,767 (€6,000)

Johannesburg, South Africa – $3,218 (40,000 ZAR)

Dubai, United Arab Emirates – $1,906 to $2,722 (7,000-10,000 Dh)

Moscow, Russia – $830 (46,108 RUB)

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Why Genetic Testing Has Insurance Companies Up In Arms

October 19th, 2017

Life insurance companies in Canada are once again initiating new measures to help protect consumers from discrimination based on their genetic profile. Critics, however, are not convinced the changes will ensure fair treatment.

The voluntary pledge states that people applying for a life insurance policy of up to $250,000 will no longer be asked or required to provide information about previous genetic tests. Insurance companies are still allowed to use this information when applicants seek larger amounts, but consumers won’t be asked for the results of the tests if done for medical purposes and the person has not been informed of the outcome. Family members of the applicant won’t be required to undergo genetic testing.

According to Frank Swedlove, president and CEO of the Canadian Life and Health Insurance Association, “What we wanted to do is ensure the vast majority of Canadians would be able to buy life insurance and not need to worry about this issue of genetic test results.”

The issue of genetic discrimination has increasingly become a contentious topic in Canada as scientific advances and lower testing fees make it possible for anyone to know in advance if they may have a gene predisposed to certain diseases, cancer or other health conditions. Every year the number of diseases that can identified through genetic testing increases.

Proponents of the federal bill banning genetic discrimination content the new measures don’t reach to the root of the problem. Canadians could still be targeted by insurance providers, employers and others.

Liberal MP Rob Oliphant, who sponsored the bill in the House said, “Legislation is needed to protect Canadians from being unfairly targeted because of their genes. I don’t think voluntary efforts, when it comes to discrimination, are ever appropriate. The reality is there is a power imbalance.”

Noah Shack, director of policy at the Centre for Israel and Jewish Affairs stated, “They’ve known about the problem of genetic discrimination for years and chose to really do nothing until the 11th hour. Insurance is only part of the issue. Canadians need protection from the host of ways companies, landlords, employers and others may use genetic testing results.”

As of January, 2017 life insurance companies in Canada stopped requesting or using genetic testing information for new life insurance applications up to $250,000. The latest insurance industry policy is slated to become effective as of Jan. 1, 2018 and would only apply to life insurance, not critical illness or other products.

Wendy Hope, vice-president of external relations with the Canadian Life and Health Insurance Association, stated in an e-mail, “Such products are directly related to health status and that not using or having access to genetic testing information would make the cost of these products prohibitive.”

Mr. Swedlove said the commitment made by the industry will meet the needs of the 85% of Canadians with life insurance coverage of $250,000 or less, therefore new rules aren’t needed.

“The bill isn’t really necessary to meet the needs for the vast majority of Canadians,” he said.

Mr. Swedlove went on to say that the bill could present serious harm because applicants genetically predisposed to critical health conditions could drive up the costs for everyone if they are allowed to enter the “pool” or category from which premiums are set.

Bev Heim-Myers, chair of the Canadian Coalition for Genetic Fairness, said capping life insurance without genetic testing requirements at $250,000 is discriminatory in and of itself and unfairly targets those who might want or need more coverage.

Insurance issues aside, she said legislation is necessary because without it, Canadians may forgo genetic testing that could inform them of potential health risks and allow them to take preventive action. According to MedCan, the majority of people who have had genetic tests make proactive life changes such as healthier diets and more exercise.

“This is about the health and well-being of Canadians,” Ms. Heim-Myers said. “This is about Canadians being able to make their own choices.”

Debate is About More Than Genetics

Insurance companies fear that a potentially high-risk client – someone genetically predisposed to breast cancer, for instance – could buy a large insurance policy at the same rate as someone without the cancer gene. With the ban in place, the industry might feel it’s necessary to increase premiums across the board.

The side in favour of the bill, like the Canadian Coalition for Genetic Fairness, fears that being forced to disclose genetic testing and the results, will discourage people from being tested. This could lead to a delay in diagnosis and treatment. It could also discourage Canadians from getting life insurance due to the high premiums for being a higher-risk.

Timothy Caulfield, director of research at the Health Law Institute at the University of Alberta speaks of other fears: The rash of horrific predictions regarding the evils of tampering with genetics and the fears that followed the decoding of the human genome, such as an army of clones, designer babies and the creation of a genetic underclass.

Full human genomes can now be decoded for about $5,000 and there is data on over 32,000 genetic predispositions. However, the link between genes and the development of diseases is very complex.

In Policy Options, Professor Caulfield writes, “There is little evidence to support the idea that genetic discrimination is a big problem. If it does happen, it certainly doesn’t happen on a scale that would classify it as a pressing policy dilemma,”

From an insurer’s perspective, if an individual’s genetic information is available, then you could argue that it should be shared with an insurance provider to accurately assess risk as this form of testing can be very helpful in determining the probability of a future disorder. In this sense, genetic testing results are part of your medical history.

From the consumer’s perspective, there are obvious concerns about discrimination, even though it is difficult to determine the number of cases that have occurred. However, the main benefit of genetic testing is that you will understand the risks you are exposed to and will be able to take preventive actions much sooner.

Legislation is Not Necessary

CLHIA president Frank Swedlove says legislation is not necessary. The industry is responding to concerns raised about the amount of personal information insurers can gather.

He says self-regulation pre-empts federal legislation. The industry doesn’t require new genetic testing during the application process, but customers must disclose all medical information and history when buying a new policy – including genetic tests.

Swedlove says collecting genetic test results for insurance policies of $250,000 or more is necessary in order to manage the industry’s financial risks.

“Our goal is to continue to ensure that all Canadians can access insurance at fair and reasonable prices,” Swedlove says.

Pros to Consumer and Cons to Insurance Companies

Bill S-201, the Genetic Non-Discrimination Act, seeks to revise the Canada Labour Code and the Canadian Human Rights Act to make it illegal for employers, insurance companies and anyone else entering into a contract or providing goods or services to require anyone to undergo genetic testing or to disclose the results of a genetic test.

The bill was designed to ban discrimination based on a person’s genetic makeup. For example, if tests reveal you have the Huntington’s disease gene, you could be fired or denied employment or insurance. Proponents of the bill, initiated in 2015 by Liberal Sen. James Cowan, argue that fear of such repercussions may prevent people from getting genetic testing.

The insurance industry disagrees with this legislation arguing that it could impede access to insurance for some Canadians and thereby severely compromise the viability of the industry. In theory, if a person knows he is genetically predisposed with a life threatening disease, he could buy millions of dollars worth of life insurance at essentially discounted rates, without telling the insurance company he may die early.

The concept of equal information is absolutely at the core of insurance,” says Stephen Frank, senior vice-president, policy, at the Canadian Life and Health Insurance Association (CLHIA). “The rule is, if we’re going to offer you insurance, both of us need to understand the risk that we’re taking, so that we can enter into this in good faith. And this type of approach would break that chain.”

The industry states that if the bill passes the result would be higher premiums for everyone. “You’d have to write a lot of $300,000 policies to make up for a couple million dollars of unexpected loss,” says Frank. He points to a Canadian Institute of Actuaries study that estimated, over time, passage of the bill could result in 50% premium increases for women and 30% for men.

Others believe the impact would be less severe. The Office of the Privacy Commissioner of Canada, citing 2011 and 2012 studies, concluded the legislation “would not have significant adverse impact on the viability of the life and health insurance industry,” and that premiums would likely not rise more than about 3% overall and the industry could absorb this increase.

Dr. Michael Hoy, an economics professor at the University of Guelph who specializes in insurance market information, says, “No one can predict the precise impact of such legislation. The insurance industry is justified in arguing that people possessing devastating genetic information would be prompted to buy more insurance.”

But the thing is,” he continues, “there aren’t very many people in the population who have such devastating information that they can keep [it] private from insurance companies.” Given that applicants would still have to disclose personal and family medical histories, insurance companies would know if someone had a strong family history of, for example, breast cancer or Huntington’s disease, and would rate policies accordingly.

So, if you spread those extra costs across the entire insurance pool,” continues Hoy, “they probably won’t lead to very substantial increases. I’m not saying that 30% or 50% increases couldn’t someday be a sensible set of assumptions, but I think that’s very far down the road.”

Toronto insurance consultant David Wm. Brown is less sanguine. “Genetic testing is at its embryonic stage. Eventually, we’re going to be able to test for everything,” he says. “If we get to that point, and applicants can have more knowledge than insurance companies on almost every question they ask, then it completely skews a system based on mutual disclosure of information.”

Frank says insurance companies voluntarily agree not to ask applicants or existing policyholders to undergo genetic testing. And beginning January 1, 2018, CLHIA members won’t ask for the results for policies worth less than $250,000, which is about 85% of policies issued. Any amount over that, he says, “we would still want to understand why you are asking for so much coverage.”

He continues to say these measures take into account the importance of genetic privacy to Canadians. “It’s a compromise that will allow the industry and the market to be sustained at a price point that people find affordable, but that will protect industry from being taken advantage of by people who have information they are not disclosing.”

The way the bill stands now, insurance companies are not allowed to ask applicants for genetic testing results. Should legislation pass as it currently written, says Brown, advisors would be put into murky water pertaining to disclosure and ethics. The insurance application, he points out, directly asks agents if they know of any factors that might affect underwriting.

If I know that somebody has had genetic testing, then I personally believe I am obligated to inform the [insurance] company that I do know that information. We have a certain fiduciary responsibility to both the provider and the purchaser, and I think anyone who wants to do the right thing has to disclose what they know. How [the legislation will] deal with that, I don’t know,” he says.

Liberal MP Randy Boissonnault has put forward several motions to amend Bill S-201, effectively removing the insurance industry from its scope. The amendments and the bill are up for vote in the House of Commons in early April.

In the meantime, the Genetic Non-Discrimination Act points to a more systemic problem for the insurance industry – public perception that insurance companies are predators.

It’s a bit of a mis-perception from the advocates, that we use genetic tests as a way to say no,” says Frank. “Insurers want to write business. We’re in the business of covering people. So we’re never going to be looking for reasons to say no.”

Brown agrees. “People still don’t understand the concept of insurance as a spread of risk among a common ground of people,” he says. “All they see is, ‘The bad insurance companies want to get more information in order not to pay claims.’” He argues that Bill S-201 could pass solely on this emotional argument, which, ironically, could have negative repercussions for the industry and consumers alike. “We need to do a better job of explaining insurance to the public.”

Mortgage Balances on the Rise: How Best to Protect Yourself

September 13th, 2017
Mortgage Balances on the Rise

In a recent report from TransUnion Canada, the average amount Canadians owe in mortgage debt is up by nearly five per cent, even though real estate sales have declined.

The average balance for new-mortgages during the first quarter of 2017 was approximately $280,093, up 8% from the same period a year ago. The increase in mortgage amounts is mainly due to rising house prices.

According to TransUnion research director Matt Fabian, despite increasing balances consumers have been able to keep up with mortgage obligations. Delinquency rates have dropped by 0.6%.

House prices vary greatly from province to province which means that mortgage amounts vary, as well. The cost of the home and the amount of the down payment affect how much of a mortgage you need. Most people can only afford the minimum down payment amount allowed in their province, however the more you can put down, the better off you will be in the long run. Average mortgage amounts by province currently look like this:

Alberta – $243,561
British Columbia – $210,500
Manitoba – $139,850
New Brunswick – $102,250
Newfoundland and Labrador – $156,500
Nova Scotia – $114,545
Ontario – $187,200
Prince Edward Island – $102,400
Quebec – $226,972
Saskatchewan – $122,618

This is a lot of debt to leave behind should tragedy suddenly strike, and that is why mortgage lenders insist the mortgage holder has enough life insurance to cover the balance. Your lender (bank, credit union, etc.) will offer you mortgage life insurance and there instances when mortgage insurance makes sense, but in most cases, you are better off buying private life insurance coverage.

Advantages of Private Life Insurance Coverage

Private life insurance coverage offers many advantages over mortgage insurance.

Your Premiums

The premium on mortgage insurance is the same for everyone. You don’t get any discounts for not smoking, living a healthy lifestyle, buying when you are young or any other discounts normally available with personal life insurance policies. This means you aren’t getting the best possible deal and may be paying higher premiums than you should.

Benefit Value Declines

Mortgage life insurance covers the amount of your mortgage. This means that as you pay down your balance, the face value of your policy declines. The premiums you pay stay the same for the life of your mortgage, but the amount of the benefit declines as the amount owing declines. Traditional term life insurance keeps its value and can usually be purchased for much lower premiums.

You Choose Your Beneficiary

Private life insurance allows you to name your beneficiary. With mortgage life insurance, the mortgage holder is the beneficiary. The mortgage is paid off, but your family is left with nothing else – no money for final expenses, to pay off your bills, to help with living costs or anything else your family may need after you are gone.

Underwriting Process

Underwriting is the process of determining your eligibility for life insurance coverage. The cost of your premium is based on your health, age, lifestyle and various other considerations. As long as your premiums are kept up-to-date, your coverage is guaranteed and the policy will pay out. With mortgage insurance, the lender may use “post-claim underwriting,” which means your eligibility is determined only after a claim is filed. At this time they may decide you never did qualify and deny your claim. This sounds like a horrible practice, but it can and has happened.

Changing Providers

Life insurance from your mortgage lender is tied to that lender. If you sell your home and pay off your mortgage, your insurance coverage ends. If you move your mortgage to another lender, your coverage ends, but you will be required to get a new policy. A simple term-life policy stays with you for as long as you pay the premiums, no matter who is holding your mortgage or how many houses you buy and sell.

Analyzing Your Needs

If you have a personal life insurance policy, you likely have sufficient coverage to pay off your mortgage. When analyzing how much life insurance coverage you need, covering your mortgage debt should be at the top of the list. Mortgage lenders will insist that you have some type of insurance to ensure your mortgage will be paid in case of your untimely death. If you don’t, then your lender will require you to take their insurance.

Cover More Than Just Your Mortgage

With your own private term life insurance policy, you can cover most of your insurance needs. Your beneficiary can pay off your mortgage, pay off credit card debts, pay off personal loans, pay for your child’s education, replace your income, have a relaxing vacation in the tropics or anything else that needs to be paid. A life insurance policy with the bank only covers your mortgage, which means you will need additional policies to cover everything else your beneficiary will need. This means double premiums for the same amount of coverage.

These are all important reasons why you should get sufficient personal life insurance coverage and avoid mortgage insurance from your bank or financial institution. However, there is one more thing to remember – an untimely death is not the only reason to get insurance. To protect yourself and your family against financial hardship, you should also consider critical illness and disability insurance.

The chances of developing an illness or becoming disabled are much greater than an untimely death. You most likely have some type of illness or disability insurance coverage from your employer, but it may not be enough. If you are self-employed, personal life insurance with illness and disability protection becomes even more important. Always make sure you have sufficient coverage for your needs.

For more information, give us a call at 1-866-899-4849 or to compare for yourself with our Term Life Instant Quote Page.

What The Financial Experts Own – Mike Aziz

September 13th, 2017
  
Mike Aziz Insurance Agent

Mike Aziz

Senior Vice President of Sales, Canada Protection Plan 

Michael’s career spans over 20 years in the financial services industry including investments, life insurance and living benefits.

Prior to joining Canada Protection Plan, Michael spent 15 years at a large Canadian insurance company working in various roles, including Regional Vice President, Wealth Management and Insurance where he lead national teams of Regional Sales Directors who consistently exceeded their objectives under his leadership and guidance.

As Senior Vice President of Distribution at Canada Protection Plan, Michael is responsible for the company’s growth and to further enhance relationships with the strategic partners.

Michael has provided his industry insight to major publications, including The Insurance & Investment Journal, Investment Executive and the National Post.

1. What Type of Life Insurance do you own?

I own Whole life, CI and some term coverage on top of what I get from work.

2. What factors did you consider when determining the coverage amount?

Kids education, charitable giving, maintaining the lifestyle if something were to happen and cover capital gains of my estate.

3. Do you believe in Life Insurance for Children?

Absolutely, get it young while it is extremely cheap.

4. What is The Biggest Life Insurance mistake people make?

Thinking they don’t need insurance because nothing will happen to them.

5. Outside of Life Insurance what other types of individual insurance are often over looked?

Disability and Critical illness.

Michael Aziz holds an MBA from the University of Windsor. He is a CFA charter holder and Certified Financial Planner. He lives in Toronto with his wife and two children and spends his free time snowboarding, cycling and working with the youth in his community.

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Study Suggests Excessive Sugar Intake Could Increase the Risk Of Depression in Men

July 31st, 2017
High sugar intake can increase depression in men

Researchers have discovered a profound link between the consumption of sugar and depression in men. Women, however didn’t show this association. Quite the opposite, in fact. This study may prove the age-old belief that women need more sugar than men.

The study was conducted over a 23 year period by researchers from University College London (UCL) with a control group of 5000 men and 2000 women. Diets and common mental health problems were examined and the results revealed that men who consumed more than 67g of sugar per day were 23% more likely to develop some form of mental disorder than men who consumed less than 39g per day.

Women often turn to sweets to relieve stress or depression – the researchers wondered if this was true for men, as well – the answer was no. They found no evidence that the men ate more sweets during ‘down’ times. On the contrary, they seemed to lose their appetites altogether.

Anika Knüppel, a leading author at the UCL Institute of Epidemiology and Health stated, “High sugar diets have a number of influences on our health but our study shows that there might also be a link between sugar and mood disorders, particularly among men. There are numerous factors that influence chances for mood disorders, but having a diet high in sugary foods and drinks might be the straw that breaks the camel’s back. The study found no link between sugar intake and new mood disorders in women and it is unclear why. More research is needed to test the sugar-depression effect in large population samples.”

Sugar consumption and mental health status was measured with a series of questionnaires.

The biggest problem with studies that rely on questionnaires is that people do not always tell the truth – or the whole truth. Human nature dictates that in order to avoid embarrassment, people tend to understate how much they actually eat – this is especially true for women.

Researchers in this study strongly believe that the women questioned largely understated their food and sugar consumption. Women were already under-represented by less than half of the subjects, so to say that only men may be affected by excessive sugar consumption is premature. Knüppel feels more research is needed.

Rob Howard, professor of old age psychiatry at UCL, agrees. “This study is important because it is the first to be able to show that an increase in risk of about a quarter in common mental disorders – mostly mild anxiety and depression – in men who eat the most sugar cannot be explained by those who were already anxious or depressed using sugar as a form of comfort. Association was complicated and further studies would be needed.”

Tom Sanders, professor emeritus of nutrition and dietetics at King’s College London, had reservations. He pointed out that various factors could influence the results, such as socioeconomic status, alcohol consumption, smoking, heredity and obesity. Sanders contends that, “There still is a risk of residual confounding factors. From a scientific standpoint it is difficult to see how sugar in food would differ from other sources of carbohydrate on mental health, as both are broken down to simple sugars in the gut before absorption and the glycemic index of sugar is less than refined starchy foods such as white bread and rice.”

Depression and Life Insurance

A Canadian Living report states that approximately 10% of the population will suffer from some form of depression and 15% will be stricken with severe depression during their lifetime. Depression can make you ineligible for life insurance coverage.

Depression is a serious mental illness that often ends in suicide, which is why life insurance companies shy away from providing coverage for anyone at risk of developing a mental illness. Depression has been categorized into many forms, including::

  • Endogenous Depression – Depression that is caused by internal sources, such as worry, fear and stress.
  • Situational Depression – Temporary sadness or “depression” linked to a particular situation.
  • Psychotic Depression – A deep hurt that manifests itself into hallucinations or paranoia – usually stemming from severe trauma.

Traditional life insurance may still be available to you, depending on your form of depression. You could qualify for a policy at standard rates if you don’t have underlying health issues and a good family health history.

Individuals with a mild type of depression and the condition has been stabilized, have a very good chance of receiving standard rates. Applicants with more severe forms of depression are more likely to receive a rated policy, or be declined all together.

A rated policy is associated with higher risk, therefore premiums can be anywhere from 50% to 350% higher than the standard rate. Extremely high risk applicants are likely to be declined.

Other options include No Medical Life Insurance: Simplified Issue Plans and Guaranteed Issue Plans.

Simplified issue policies have higher face amounts and lower premiums and many of these plans are available on an immediate pay basis. Simplified issue plans have no medical tests, but do have a short series of health questions. Thankfully, most simplified issue plans do not have a depression-related question. If the insured is first declined for life insurance, the type of simplified issue plan available will be more limited. Therefore, if you think that there’s a good chance that you will be declined from traditional insurance, you should consider first looking at a simplified issue policy. Canada Protection a leading provider of Simplified Issue policies increased it’s issue limits on it’s Immediate Pay and Deferred Payout Term policies. Humania Assurance also now offers $300,000 of No Medical Term 10 and Term 20 Simplified Issue plans.

Guaranteed Issue Life Insurance is often considered as the last resort. There are no medical tests and no health questions. Premiums are much higher and the death benefit is limited in the first two years to a return of premiums for non accidental deaths.

For more information, give us a call at 1-866-899-4849 or try our No Medical Life Insurance Quote Page if you are looking for rates.

10 Facts You Need To Know About Disability Coverage

July 27th, 2017
Disability Insurance Facts

Imagine not being able to work and earn a living for your family. It’s not something most people want to think about on a daily basis. Protecting your livelihood with adequate disability insurance can mean the difference between maintaining your standard of life or being forced to make drastic cuts in household spending after being hit with a life-changing injury or illness.

Your ability to earn a income is your single greatest insurable need. Being prepared for the worst and having adequate protection in place is key to ensuring your family will not suffer any decrease in their standard of life should you suffer from a disability.

The first step is understanding how much coverage you need and are eligible for. The next step is to find out how much existing disability insurance you currently may have in force and the definitions of disability that cover you. Many Canadians don’t even know how much of their income is covered or the definition of disability used under the workplace group insurance plans.

It’s a good idea to employ a broker who can help you determine your disability insurance needs, uncover existing coverage features and benefit amounts, and then offer top-op or replacement plans. This way you are covered for as much disability insurance as legally permissible, without overpaying for coverage you can never claim on. 

For more facts on disability insurance, check out our infographic below.

Facts About Disability Insurance
 

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What The Financial Experts Own – Janet Gray

July 10th, 2017
  
Janet Gray money coach

Janet Gray

Money Coach, Money Coaches Canada 

Before joining Money Coaches Canada in 2014, Janet was a Certified Financial Planner offering full service with investments, insurance and mortgages for a major Canadian institution for 13 years.

Even though she no longer sells insurance/investments products, Janet still maintains her designation as a Certified Health Insurance Specialist (CHS), because she believes it informs her work as a Money Coach and Certified Financial Planner.

Her specialized knowledge in both business and retirement issues has made her a go-to-expert for media outlets such as CBC, CTV, Global, The Globe and Mail, and MoneySense magazine. She can be seen regularly on CTV Ottawa Morning Live and is currently a MoneySense Approved Financial Advisor.

In 2009 she founded the Ottawa chapter of the Canadian Association of Retired Persons (CARP) which is now 10,000 members strong. Her work as Chapter Chair for seven years (she is currently on the board as Past Chair) brought her in front of senate and commons committees and into conversation with many sector and community leaders. She is a Certified Professional Consultant on Aging (CPCA), an Elder Planning Counsellor (EPC) and a sought after speaker on financial planning and challenges in retirement.

Seeing the powerful shift that money mastery makes in people’s lives and businesses is what brings Janet the greatest satisfaction in her work.

“I strongly encourage clients to stay connected to their money and their financial goals. Life is always transitioning; a business owner always has to adapt to change; retired people will have different needs in early retirement than they will have in later years; families transition through many stages starting with childcare through to higher education costs (and much in between).

With a well-planned ‘financial operating system’, you can adapt to these sorts of change with ease. An important role I serve is regularly checking in with clients, reviewing progress against their goals and being proactive and anticipating any transitions ahead.”

1. What Type of Life Insurance do you own?

As a married couple in our 50’s with no children, we had term insurance while the mortgage debt was still high. With little debt now, we find that minimal term life insurance works for us, especially after funeral costs are pre-paid and much of our estate is on its way to being tax efficient. We will further re-evaluate our needs at the next term renewal.

2. What factors did you consider when determining the coverage amount?

We considered the standard things like outstanding debts and also loss of income for the survivor.

3. Do you believe in Life Insurance for Children?

The main reason I would recommend life insurance for a child is if it is permanent insurance and you are ‘locking’ in the lifetime premium. Or you are buying a child rider or their own policy to then convert ownership to the child at a later date without needing health questionnaires. But the decision needs lots of discussion and understanding to determine if this is the best use of financial resources at the time of purchase.

4. What is The Biggest Life Insurance mistake people make?

Most people do not understand the types of insurance and their needs so they often tend to either not purchase enough coverage or they purchase an unsuitable product. It’s not that often that I see people have too much coverage- but they often have too little. Or they have a complicated insurance product when they need a simple solution. I also observe that once people purchase their policy, they do not review the benefits on a regular basis to confirm if the policy is still as suitable for them now as it was when they first got it.

5. Outside of Life Insurance what other types of individual insurance are often over looked?

Many people are not aware of the Living benefits insurance such as Critical Illness and Long Term Care Insurance – especially when I am speaking with those who are in their 50s and 60s. They usually didn’t have it within their group insurance package so are not aware of the product and its benefits. They are often surprised to hear about it.

Janet is equally passionate about serving the needs of small business owners and entrepreneurs. Janet has been a member of the Orleans Chamber of Commerce since 2001, winning the distinction of Financial Services Person of the Year twice. She has participated in many business development events, including “Dragon’s Den” style pitch opportunities for entrepreneurs to receive input on their concepts and business plans and regularly acts as a mentor to new entrepreneurs.

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The Pros and Cons of Banning Embedded Commissions

July 6th, 2017
embedded life insurance commissions

Morning Star defines embedded sales commissions (also known as trailer fees) “as service commissions paid by the mutual fund company to the sales representative managing your mutual funds. This commission is paid as long as you hold units in the fund. Commissions generally range from 0.25% to 1% and are paid out of the management fund’s expenses.

The trailer fee compensates the advisor for ongoing service. These services can include, answering questions about the performance of your investments and other related matters. Segregated funds offered through Insurance companies carry similar fees.

Embedded commissions are a very hot topic in the insurance industry right now. The big questions right now are whether embedded commissions should be banned altogether, have more rules and regulations attached to them or just left as they are. The Canadian Securities Administrators are taking a serious look into the matter and considering the possibility of banning embedded commissions or trailer fees – a move Britain and Australia have already taken. Industry stakeholders are split almost down the middle on the issue.

One side of the debate believes that there is an immediate need to reform mutual fund fees. In fact, some experts say that banning third-party embedded commissions, including banning trailing commissions on mutual funds sold through discount brokerages and direct from the manufacturer, is long overdue.

“Trailer fees are the least understood topic for investors,” says Pramod Udiaver, chief executive officer at online portfolio manager Invisor Investment Management Inc. of Oakville, Ont. “Most of the time, when we look at our clients assets from other institutions, that is when they become aware they have funds linked to deferred sales charges and trailing commissions. It is completely unbeknownst to them. Everything is embedded and it isn’t clear to them.”

The other side says that embedded commissions are an important part of the business and many clients like the idea of not paying any upfront fees.

Pros of Banning Embedded Commissions

1. With a fee-based system the advisor is clearly working for you and has your best interests in mind.

2. You know how much you are paying. Your advisor may charge a flat fee, a fixed hourly rate or a percentage of the assets under management. In all cases, you are told exactly how much you are paying.

3. Fees paid to advisors may, in certain circumstances, be tax deductible against income. This can result in significant tax savings for higher-income clients.

4. Working with a fee-based advisor could lead to better investment recommendations for many consumers.

5. An embedded commission ban could mean that investments such as individual securities and exchange traded funds will be poised for a boost in popularity. This is what happened in the UK and Australia when similar fee bans were implemented. These investments having a lower cost to the consumer.

6. As a general rule, individual investors assisted by a financial adviser accumulate significantly more financial assets than non-advised investors.

7. All charges are based on specific activities the advisor provides for the client.

8. Typically, fee-based advisors have access to lower cost, institutional share classes.

Cons of Banning Embedded Commissions

1. There are usually limitations to fee-based accounts. Most firms limit the number of trades you can make in a year and charge more if you go over the limit.

2. Greg Pollock, chief executive officer of Advocis, an industry association for financial advisers, says “Banning commissions could do more harm to average Canadian investors than good, leaving many Canadians without affordable access to investment advice.”

3. Many experts believe that a commission ban could force sales people at large firms such as Edward Jones and Investors Group to leave the industry.

4. John DeGoey, portfolio manager at Industrial Alliance Securities Inc. rebuffs the argument that removing commissions – and incentives – for advisors will lead to a higher cost of financial advice for clients.

5. Many investors tend to equate financial advice with financial risk, which scares them to death, so they avoid getting advice. These clients resist paying upfront fees for financial advice because they do not understand what it means to work with a financial advisor.

6. Many investors prefer commission-based advisors because they don’t like to write a monthly cheque to their advisor.

7. A commission-based account is often cheaper for clients that don’t trade too much and don’t need the financial planning services offered by an advisor. The commission ban could increase costs and reduce access to advice for many Canadians, especially those with small to modest-sized accounts.

8. If the option for embedded commissions is removed by the industry, it could lead to far less advice for the average Canadian.

Why Acts Of Terrorism Are A Small Risk For The Life Insurance Industry

June 30th, 2017
life insurance and acts of terrorism

Acts of terrorism seem to be a daily event these days. These attacks have caused the insurance industry to suffer massive losses due to property damage. But, how has this affected life insurance? For the most part, the impact on life insurance has been minimal. Not because people haven’t lost their lives in terrorist attacks, but because the risk of dying from an act of terrorism are very slim.

As seen in this instagram, heart and cardiovascular disorders are by far the greatest threats to life. This is closely followed by cancer and respiratory disorders. War and terrorism are the least likely causes of death, therefore a small risk to life insurance companies.

Insurance Coverage and Terrorism

In most cases, a standard home insurance policy doesn’t have any exclusions for loss or damage caused by a terrorist attack. For example, if your house burns down due to careless smoking or an explosion from a terrorist attack, it still burned down, so you’re covered.

The same holds true for your car insurance – your comprehensive coverage will pay for damages no matter how they occurred.

Damages related to certain acts of terrorism – like a chemical or biological attack – may fall under the category of war-risk exclusions. The war exclusion clause, which is under the category of policy exclusions, ensures that the insurance company isn’t obligated to pay for losses created by acts of war. It was originally intended to deny civilian claims for countries affected by war instead of to exclude soldiers.

One of the most important things to understand when looking at your policy is knowing in which cases you are protected. Your life insurance contract may contain something called a “policy exclusion,” which describes the conditions under which you are not covered.

Life Insurance and Terrorism

Unfortunately, the question of whether a life insurance policy will cover a death due to terrorism is necessary these days. There have been more blatant attacks in the 21st century than ever before. Even though the chance of being a victim of an attack are very slim, it is still a possibility we must consider.

Generally speaking, your life insurance company is required to pay for a death caused by or related to terrorism. However, policies vary from one case to another. To fully answer the question, you need to understand how life insurance works and what factors require an insurance company to pay and which ones don’t.

Different Types of Insurance

Conventional life insurance policies such as Term, Universal or Whole Life are not part of the equation. The benefit will usually be paid no matter how the insured dies – except maybe in the case of suicide or other policy exclusions. Accidental Death and Dismemberment insurance is a different story. Here things get more complicated. Ask your insurance agent or advisor whether or not you are covered and read the policy very carefully.

Standard Life Insurance Policies

If you’re concerned about being the victim of an act of terrorism, and you want to be absolutely certain that your beneficiaries will receive the insurance money should you die as a result of a terrorist attack, then a standard life insurance policy may be your best bet. This type of policy will usually pay the death benefit no matter what the cause. Make sure you understand the different types of insurance policies and weigh all the factors before you decide which one is right for you.

Term Life Insurance

Term life insurance covers you for a set period of time. You choose the length of the policy. Most often people will choose a 20 year term life insurance policy. At the end of the policy, you have the option to renew, however your circumstances will probably be much different by then and you will have different needs, so a different type may fit better into your financial goals.

Also, keep in mind that you will be much older and your health may not as good as it was when you bought your original policy. This means considerably higher premiums because your risk of dying have greatly increased.

Whole Life Insurance

Whole life insurance policies are guaranteed to pay out the benefit upon death and you keep your policy for as long as live, plus your premiums never go up. This type also has a guaranteed cash value. If you want stable coverage and a guarantee that you are covered in case of terrorism, then this is the perfect policy for you.

Universal Life Insurance

Another excellent choice with guaranteed coverage under any circumstances is universal life insurance. You can choose guaranteed universal life or indexed universal life. Both are basically the same except for some financial differences. With guaranteed universal, the interest rate on the cash value portion will be set by the insurance company, whereas with an indexed universal life policy, the interest rate is set according to the index percentage rate.

Whichever type you choose, you are guaranteed peace of mind. There may be nothing you can do about the threat of terrorism that has been hanging over our heads, but should tragedy strike at least you can make sure your family will be financially protected.

Why Life Insurance is a Bargain

June 29th, 2017
life insurance bargain

The cost of living drains every penny we have. The average Canadian lives from pay cheque-to-cheque. When striving to make ends meet, the added expense of life insurance premiums seems like a luxury we can do without. The truth is, life insurance is not a luxury, it is a necessity and the potential cost of not buying insurance can be devastating.

Sometimes we get so focused on putting out the immediate fire that we forget about the embers that may be ready to spark in an another area. We are so concerned about everyday life that we put off planning for the future. There are two main priorities in everyone’s life: family and retirement. Life insurance addresses both of these concerns.

The Hidden Bargain

Tragedy can strike at any moment. Not too many people know when they will die, but we all know that it will happen someday. We also know that our family will be in great distress emotionally and financially if we die unexpectedly. Life insurance can take care of the financial aspect, which will take a huge load off their shoulders.

Many people don’t buy coverage because they think it costs too much. It is actually far less expensive than you may think. The 2016 Insurance Barometer Study, by Life Happens and LIMRA showed that 8 in 10 people overestimate the cost of life insurance. In fact, a 30 year old, healthy male can be approved for a $250,000, 20-year term life insurance policy for only $13 a month. That is a considerable bargain for piece of mind and financial security for your family.

Enjoy the Benefits Yourself

Life insurance isn’t just about securing the financial future of your loved ones. You can enjoy the benefits while you are still alive. If money is not a factor, consider the benefits of whole life insurance. This is money you can use during your own lifetime.

The premiums on permanent life insurance policies are typically higher in the beginning, but it is well worth the cost. You have coverage for as long as live, plus you can accumulate tax-deferred cash value. You can use the accumulated cash value anyway you like, including a nice retirement income.

Before retirement, a whole insurance policy can act as collateral or you can borrow from the fund directly. When borrowing, the rates are generally quite low and you are not subject to credit checks or other restrictions. Technically, you should repay the loan, but if for some reason you can’t, benefits left to your beneficiaries will be reduced.

Disability Insurance

Generally speaking, people are much more likely to become ill, injured or disabled than to die prematurely. People believe their employee benefits will take care of that, but what if you lose your job or the company goes under? In these times, you can not rely on company benefits, you have to take care of yourself.

Even a mild injury can put you out of work for a month or more. How much of your monthly expenses will company policy cover? What if you need home care or special treatment? Our Canadian Health Plan covers most of these costs, but not all. In some provinces, many of these extras come out of your own pocket.

Disability insurance ensures you and your family are not put under any financial difficulties. You will continue to receive an income until you are able to return to work.

Hoping and praying that misfortune doesn’t touch your family is one option, but getting adequate protection is much more feasible. It truly is a bargain in disguise.

Dollars for Pennies

In the insurance industry, we sell dollars for pennies. This is a concept that was first brought forth by the great,Ben Feldman (an American businessman and one of the most prolific salespeople in history). But, on top of these dollars, we also give you piece of mind, financial security for your loved ones and the option to grow your money in a safe environment – no penny jar will give you all that!

The pennies are collected every month, or year if you are on an annual plan, and the dollars are delivered when you need them most. This could be in the case of your death, disability or an outstanding business opportunity. You can really appreciate the benefits of life insurance when you compare the cost of annual premiums with the ultimate benefit.

Why Would a Billionaire Need Life Insurance?

In the days of our grandparents the plan was to work hard, pay off the house and die before retirement age. This is no longer an option. Most Canadians can’t pay off their mortgage before they retire so they end up working well past the government designated age of retirement. This is partly due to people living longer and the cost of housing going through the ceiling. Our generation will have a hard time getting a mortgage, never mind paying it off in our lifetime, so life insurance is crucial.

However, there are also many millionaires and billionaires living in Canada. They have enough money in petty cash to buy a house outright, so why would they need life insurance?

According to the Guinness Book of World Records, a California billionaire bought a life insurance policy for $201 million dollars. No one company could handle a policy of this size, in case of a payout, this would mean a sure bankruptcy – 19 different insurance companies had to collaborate to guarantee the benefit.

The big question is, “Why would someone with a billion dollars in cash and assets need a life insurance policy at all, let alone one for $201 million?”

The answer – because it could potentially provide a great tax shelter!

There are many benefits to having life insurance. The majority of the population doesn’t even know half of the actual value. Contact us for more details about how much of a bargain it really is to own life insurance.

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Office 1-866-899-4849, 905.248.4849 Fax 905.300.4848


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