Canadian Life Insurance Companies:

News from 2012

Cash Back Life Insurance

January 21st, 2012
cash back life insurance

 

Life insurance policies in Canada are primarily divided into two categories, Term Life Insurance and Permanent Life Insurance.

Term Life insurance policies have level premiums for a stated term, i.e. 10, 20, or 30 years. In most instances, Term Life insurance policies do not build a cash value.

Permanent Life insurance policies are sub-divided into three categories, Term 100, Universal Life insurance, and Whole Life insurance.

Some Term 100 life insurance policies do provide a cash value component, but most do not.
Whole Life insurance policies have a built-in cash value. In the case of Participating Whole Life policies, the cash value includes a guaranteed cash value and a dividend cash value. The dividend cash value is dependent on the performance of the insurance company itself.

Universal Life insurance policies offer an unbundled form of cash value life insurance. The insured is pays for the cost of insurance, premium tax, administration fees, and policy fees. Any premium above these amounts is invested by the insurance carriers.

The investment choices include low-risk investments such as GICs or bond funds or higher-risk investments such as equity or specialty funds. Some companies, such as BMO Insurance, have over 400 different investments to choose from on their Universal Life plan.

What The Experts Say about Cash back Life Insurance

Pros

“Whole life insurance is the most established type of permanent policy on the market, and its stability and "ease of use" keep it a popular option.” In-Depth Financial LLC.

“Whole life insurance policy premiums are guaranteed never to increase—for life. This guarantee allows you to plan with certainty. Your cost will never go up, and, in fact, it may go down.” Pamela Yellen, President & Founder of Bank On Yourself. Pamela is a two-time New York Times best-selling author and has appeared on ABC, CBS, NBC, CNN, Fox and NPR.

“Most people outlive their term life insurance, which is why the rates are much lower than a whole life insurance that is designed to last your entire lifetime.” JRC Insurance Group.

“If you purchase a whole life insurance policy, you'll be able to choose between a participating and non-participating policy. When it comes to a participating policy, these are called "participating" because they allow you to participate in the profits of the insurance company. You do this by receiving dividends as part of the investment component of the policy.” Chantal Marr, President LSM Insurance.

“Depending on how the permanent life insurance policy is designed, it could provide a source of tax-free income in the future. Besides Roth IRA's, the only other real source of tax-free income are specially designed life insurance policies. The other benefit of cash value life insurance is that there are products that you can use inside of the policy that can protect the cash value against any market loss.” Stephen Stricklin, founder of Wise Wealth.

Cons

“The biggest drawback to whole life insurance is that premiums are way more expensive than term life insurance. Assuming equivalent investment returns, because of the way the policies are written, it takes a lot longer for a whole life policy to accumulate significant cash value (often 12-15 years) than if you invested on your own.” David Weliver, cited authority on personal finance.

“The big problem with this type of policy is your lack of involvement in investing the cash value savings. Although the money can still be made available to you via loans, the investment portfolio itself is entirely decided upon by your insurance company.” In-Depth Financial LLC.

“With whole life insurance, the money in your policy is never really your money. If you end up borrowing against your cash value, the life insurance company treats this withdrawal like a loan and it must be paid back with interest.” JRC Insurance Group.

The fees are too high. You don’t pay the fees directly, but you do pay them with lower returns. For example, the commission on a whole life insurance policy is generally 100% of the first year’s premiums then 6% of premiums every year after that. That’s money that doesn’t get invested on your behalf.” James M. Dahle, MD, FACEP.

“Whole life should never be purchased unless the premium is comfortably affordable – and this is the biggest problem in the middle income market. Consumers in this market can rarely get the robust death benefits they need to pay off mortgages/provide income replacement/ provide for children’s higher education – all necessary in event of premature death – with a whole life product chassis. Unfortunately, many who buy into the sales pitch realize this within just a few years of policy issue and cancel the policy, suffering a huge surrender charge that consumes most all of the premium outlay.” Chris Lalor, owner of Life Insurance Shopping Reviews.

For more details on cash back or cash value life insurance policies in Canada, please contact us at 1-866-899-4849 or visit our Whole Life Insurance Quote Page or our Universal Life Insurance Quote Page.

| 2 comments

Disability Insurance for Seniors

January 16th, 2012
listening old man by Manuel Mc
Seniors can still
get disability insurance.
Photo by Manuel Mc

Most traditional disability insurance policies end the insurance at age 65.

The Edge Disability Policy, now underwritten by The Cooperators recently increased its coverage to age 75. The plan is available under issue ages of 18 to 69 and offers monthly benefits of $1,000 to $6,000 a month.

The benefit period can be for five years or until the age of 70. It is further reduced to 24 months when the insured turns 68. In the event that the insured becomes disabled at 74, the plan would pay out until the insured's 76th birthday.

(Disability Insurance for Seniors continued...) | 2 comments

BBD’s Diagnostic Specialist Access Insurance

January 11th, 2012
Even a small company can bring big benefits
BBD's new group plan
can bring unique benefits.

To kick off the new year, BBD (Benefits by Design) will be launching Diagnostic Specialist Access Insurance underwritten by Industrial Alliance Pacific. This product allows employees and their dependents who are on medical waiting lists longer than 21 days immediate access to diagnostic examinations such as CT and MRI scans and specialist consultations.

There are no medical exams or other evidence of insurability required, and every employee is eligible for the plan until age 74. The monthly cost of the plan is $14.50 per month for a single individual, $29.00 per month for a couple, and $43.50 per month for a family.

(BBD's Diagnostic Specialist Access Insurance continued...)

Head Office: 2900 John Street Suite #302 Markham, L3R 5G3
Office 1-866-899-4849, 905.248.4849 Fax 905.300.4848


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