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How Much Commission Does Your Agent Get Paid?

May 20th, 2016

Life insurance commissions have been a recent hot topic in the Canadian personal finance community. Certain types of policies pay more first year commission (FYC) than others and this creates the potential for some unscrupulous advisors to give bad advice to their unassuming clients.

Consumers have the right to know how their agent is compensated for the type of coverage they are taking out. The risk of a few bad agents recommending only high-paying products is real, so consumers should be aware of how their agent is being compensated to make an informed decision based on their actual needs. 

Check out our infographic below which breaks down the commission payable on some common life insurance products.

infographic life insurance agent commissions

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Why You Should Avoid Life and Critical Illness Insurance for Credit Cards

May 16th, 2016
life insurance credit card
Beware of insurance offered by credit card companies

Life insurance or critical illness insurance attached to a credit card is sold as a way to pay off your outstanding credit card balance, but in the fine print you'll discover it's mainly a lucrative money-making scheme for the issuing banks at the expense of policyholders.

A one-stop shop for covering your credit card balance in case of illness or death probably sounds incredibly useful and convenient at first. After all, you probably use your credit card daily, so why not pay to clear your balance, should something happen to you, through the same credit card?

Problem is, credit card life insurance and critical illness insurance policies will never pay off your balance entirely.

(Why You Should Avoid Life and Critical Illness Insurance for Credit Cards continued...)

Why Being Financially Unprepared for a Disability Could End Up Costing You

April 29th, 2016
prepared for workplace disability

A recent poll conducted by RBC revealed a disturbing fact: 48% of Canadians said that they weren’t prepared to be off work due to a disability.

This stat shows that many Canadians still don’t take the threat of losing their income due to a disability very seriously. Many individuals, especially those from younger age groups, feel like they aren’t at risk from serious disabilities and don’t need to have contingency plans in case they are ever unable to earn an income due to a long-term disability.

Other working individuals assume that their employee health benefits plan and government health plan will take care of all expenses and replace their lost income should they ever be unable to work because of a long-term disability.

These assumptions couldn’t be further from the truth. According to Mark Hardy, Director of living benefits at RBC Insurance, nearly one-in-three Canadians will experience a period of disability lasting longer than 90 days during their working lives.

Hardy also explains that many employee health benefits offer limited coverage and do not cover 100% of the disabled worker’s lost income. Meanwhile, the government health plan usually doesn’t cover the cost of most medications and other expenses such as recuperative therapy, dietician consultations, exercise programs, home nursing, prosthetics, home care, child care, meal preparation and moving expenses.

So, what happens when you have to deal with a long-term disability that leaves you unable to work for an extended duration of time?

For starters, there’s the sudden drop off in your total income. If you are financially unprepared to deal with this monetary loss, you could lose the ability to afford the lifestyle you’ve created. This could include being unable to pay for your house, car and other regular expenses. If you are the primary earner in your family, losing or having a reduced income because of a long-term disability could cause financial burdens for the rest of your family as well.

The RBC poll cited above revealed that 78% of Canadians who go on long-term disability report that their finances are tight and they struggle to meet their daily expenses. 67% reported that their lost income causes financial strain on the other members of their household.

In order to cover their expenses, 29% of Canadians on long-term disability said that they needed to dip into their life savings. 34% said they had to take on more debt in the form of loans from banks, family and friends. 9% said that they had to cash in their RRSPs and leave themselves financially unsecured for their retirement years. 31% even said that because of their disability, their partner had to go out and find extra work in order to supplement the family’s lost income.

These figures show that Canadians often end up financially struggling along with the rest of their family if they become unable to work due to a long-term disability and have to deal with lost or reduced income.
This is where having disability insurance could prove to be crucial. In an event of a long-term disability that leaves you without your regular income, having the proper disability coverage could allow you to maintain your lifestyle, cover medical expenses and provide for your family while you recuperate.

Experiencing a long-term disability and recovering from it are stressful enough tasks on their own. Don’t add the financial burden of your lost income to your list of worries as well. Have a proper contingency plan in place and get disability insurance coverage, especially if you are primary earner in your family.

Reclaiming Old Life Insurance Policies

April 10th, 2016
claim old life insurance policy
Learn how to claim an old life insurance policy

Every year, thousands of policyholders in Canada pass away. However, not all of their beneficiaries receive the death benefit they are entitled to.

Since some beneficiaries don’t claim their rightful payout after the life insured’s death has occured, the insurance company has no way of knowing the insured has passed away.

Some insurance companies assign a time limit for any claim to be made. If you are unable to discover your policy and claim it within a year, then you might not be able to get your share of the money.

Discover your policy

If you believe that there is insurance money, waiting out there for you then you should visit the policy search service offered by the Canadian Life and Health Insurance OmbudService and ask for assistance.

OmbudService for Life and Health Insurance (OLHI) is an organization that assists and helps Canadians to find an old or lost insurance policy of a family member that died recently. OLHI will then contact its insurance company members and will request them to carry out a policy search.

If there is a lost policy death benefit out there for you, they will possibly track it down and find it. The Canadian Life and Health Insurance OmbudService requires two basic and important confirmations before it can proceed with a search:

  1. There should reasonable evidence that there in fact is existing unlocated coverage.
  2. There should be evidence to support the facts around the insured person's death.

Time Constraints

The good news is that the OmbudService search is absolutely free of cost, however, as mentioned earlier, there are time limits for the search to be conducted. The search will not be completed until three months have gone from the date when the policyholder died. Also, the search will not continue for more than 2 years after the death of the deceased. Make sure to carry out the search around that time.

Claim the policy

If you are finally sure that your deceased family member has left you money out there with your name on it then you will have to prove your claim to owning it. Firstly, search for some insurance related documents that belonged to the deceased policyholder.

You will then have to track down the deceased’s insurance company and ideally the agent who delivered that policy. Also, contact any of their financial advisors who might have relevant information about the deceased’s insurance policies.

You will have to attain necessary forms from the insurance company, in order to fill the required information and claim your unclaimed monies.

Later on, you will be required to provide further proof such as the death certificate of the deceased and the physician’s final report. For this report, you will need to contact the doctor who attended to the deceased at the hospital where he or she expired.

Reclaiming other financial instruments

There are other types of financial products that forgotten and unclaimed, which are worth mentioning:

  1. Other than insurance money, you can also reclaim money from your long-lost and old bank accounts. Sometimes when you switch your bank, without properly shutting down your old account, you tend to forget that there might be some lost funds left in there, that you can still claim.
  2. You can also reclaim a forgotten pension fund that you might not have collected but are entitled to. You will need to contact your previous employer and the pension administrator. To get your rightful share, simply contact provincial pension regulator to find out about your funds.
  3. If one day, you came across an old stock certificate that belonged to your grandparents or a deceased family member, you can find out its possible worth by consulting an online dealer or an evaluator and claim it too.

How Stress Impacts Your Life Insurance Application

April 2nd, 2016
stress life insurance application

No one in society is a stress-free person. Everyone has to go through stress at some point in his or her life. The quantity and frequency of stress in our lives are variable and can sometimes improve, or worsen situations that we are dealing with.

To succeed in life, you need some stress to counter problems and achieve goals that you’ve set over time. However, excessive stress might be dangerous for your physical and mental health.

What is stress?

Stress is a state of emotional and mental pressure that you feel when you come across challenging circumstances. You feel stressed out when you are not able to find solutions to some of your problems. Stress can sometimes go in your favor, boost energy within you and motivate you to resolve your problems, or it can either go negative resulting in Chronic Stress.

Chronic stress is a type of trauma experienced for a prolonged period of time; henceforth, it can lead to serious health problems such as high blood pressure, heart diseases, depression and other health concerns, that a life insurance company would be interested in knowing when you apply for an insurance application.

What causes stress?

There are many reasons that cause physical or emotional stress in an individual. Some examples of major stressors include:
• Financial problems
• Not able to meet the deadline in the office
• Losing your job
• Family problems and conflicts
• Isolation
• Discrimination
• Loss of a loved one
• Lack of goals in life
• Ongoing health problems

Everyone has a different way of reacting to stressful situations. A situation that creates stress and anxiety for one person may not seem stressful for another person.

The consequences of a Life Insurance application

Do you know that stress and depression can affect a life insurance application and its rates? When you are applying for a life insurance policy, you are supposed to take a medical examination, hence submitting all of your health history and records to an insurance company.

If you are suffering from high blood pressure or heart diseases and have poor health conditions, caused by Chronic Stress and depression, then your rates may be higher and you might have to pay more for your coverage compared to the person who doesn’t suffer from all of these symptoms.

These symptoms may have a huge risk to your health in the near future; thus, insurance companies might charge higher premiums for such greater risks and consequences, depending upon your life expectancy.

In extreme cases, your life insurance application could be outright declined by the insurance company. If you have a history of stress or depression, it is advisable to apply with multiple carriers at the same time, just in case some carriers decline coverage for you. It may even make sense to secure no medical life insurance before submitting applications for fully underwritten policies.

Dealing with stress

People who suffer from depression and chronic stress have different ways of dealing with it. Some might be on medications for long and others might choose the non-chemical approach, which includes natural ways of relieving stress.

Below are some of the ways that you could apply, to help manage stress in your lives:

  1. Move around: Research has proved that exercise, meditation and yoga can help ease stress and anxiety by keeping your nerves calm. Take a walk outdoors in the evening or morning.
  2. Talk it out: Talk to a friend, your loved one or whomever you’re comfortable with. Tell them what makes you stressful and look for a solution together.
  3. Healthy living: If you are a well-nourished person, your body and mind will be in a better position to cope with stress. Take healthy, balanced meals throughout the day!
  4. Sleep well: Get enough sleep at night, as it will boost your mind and body. A tired mind will think and worry about stress unreasonably.
  5. Limit caffeine: Taking too much caffeine throughout the day could aggravate the stress level, leading to anxiety and panic attacks. Limit your daily intake of tea, coffee and cigarettes.

Stress can lead to many problems in your life that you might not want to welcome, so take a deep breath and manage stress effectively as much as you can.

What To Do When Your Life Insurance Policy Lapses

February 29th, 2016
life insurance policy lapsed what to do
Don't let your life insurance policy become worthless

What happens to your life insurance coverage if your policy lapses? Will your insurance company be responsible for paying the death benefit on the insured's life if they suddenly pass away?

Don't bank on it. If you’ve missed the premium payments for your life insurance policy, and haven't made the missed premium up within a 30-day grace period, your insurance policy will terminate and will no longer provide any insurance coverage or benefits.

The 30-Day Grace Period

The Grace Period is the duration of time in which the policy owner is able to pay up any outstanding premium dues, without losing their insurance coverage. The Grace Period is typically 30 days.

However, if you’ve not made up the premium in that period of time and the insured person dies, despite missing out on the payment, the person will still receive a death benefit. Once the grace period ends, and the remaining premiums are not cleared, your life insurance policy will likewise, lapse.

Reinstate Your Policy

The good news is that if your policy lapses, you have the option of reinstating it or in simpler words, bringing it back to life. Once your policy is terminated after the grace period, reinstatement brings it back to an active or a functional status.

Insurance companies have different rules and regulations for policy reinstatement but with most companies, to reinstate your old policy you'll have to pay the outstanding premium dues and may have to profide proof of insurability. . The sooner you consider restoring your lapsed policy the better, as your future insurability is never guaranteed.

The best case scenrio is to avoid reinstatement altogether by paying up your missed premium within the 30 day grace period, so that you won't have to go through any new underwriting.

Consider Replacing The Coverage

To avoid this hassle, some people consider buying a new insurance policy instead of reinstating the previous one. In some cases policyholders may not be aware that it may be a better option to put their lapsed policy back in force instead of buying a new one, as it is could be cheaper. In other cases, it makes more sense to re-enter the market and purchase a new policy.

Update Your Carrier If Your Mailing Address Changes

Always take the necessary precautions by paying your premiums on time. Also, ensure that your insurance company has your current mailing address on file. Life insurance policies are long-term contracts and it's easy to forget to inform your carrier when you move. If they are sending out premium notices to an old address you may not know that your policy is about to lapse.

You can keep yourself well informed regarding the status of your policy and avoid it from lapsing if you are receiving all notices and keeping in touch with your agent on a yearly basis.

Take a Premium Holiday If You Can Afford It

It's worth noting, you can can avoid a universal life insurance policy from lapsing the policy’s accumulated account value. This value, which is deposited to the policyholder's account, keeps increasing over time, whenever a premium payment is made. Hence, they can use that account value to pay off the missed premiums and prevent the policy from lapsing.

Always remember, lapsing is the last thing you would want to happen to your policy! Therefore, never miss out on your policy premium dues or beware of the risks of policy reinstatement and replacement.

Weekly Personal Finance Roundup For January 22, 2016

January 22nd, 2016
Weekly RoundUp 04

We rounded up recent articles below from the past week, featuring insights and advice from the brightest minds in personal finance:

The Toronto Star reported on the Loonie's rise for a second consecutive day off rising oil prices. In the United States, unemployment applicants rose to a six-month high, the Winnipeg Free Press reported. The rise is also being felt around the world with the UN chief saying global unemployment numbers are "alarming".

The Financial Post detailed one way that the low Loonie will benefit you as a cross-border shopper. They also revealed details about the CRA's new auto-fill feature, which will help speed up your tax filing.

The Canada Business Review revealed five reasons to review your credit before expanding your business.

The Globe and Mail published a great piece on how to keep your grocery bill in check as prices rise.

Macleans wrote an informative piece about how far the Canadian stock market will fall.

Weekly Personal Finance Roundup For January 15, 2016

January 15th, 2016
Weekly RoundUp 08

We rounded up recent articles below from the past week, featuring insights and advice from the brightest minds in personal finance:

Marketplace lender Borrowell released results from an interesting survey on how credit card debt affects Canadians and covered the interesting story behind Blue Monday, statistically the most depressing day of the year.

The Globe and Mail discussed five myths about borrowing money to invest, including the common-known thinking that all debt is bad, regardless of what the money was for.

The Financial Posts's Jonathan Chevreau wrote an amazing guide to RRSPs while MoneySense Magazine answered questions related to withdrawing money from a spousal RRSP.

Huffington Post Canada revealed some great tips on how to manage household finances during uncertain times and the Toronto Star explained why internet and TV service prices keep rising.

In an overview, the Canadian Press explained why financial literacy is more crucial then ever. wrote about how cluttered offices actually cost money.

The Windsor Star wrote about some easy ways to improve disability savings plans.

Have a great weekend!

What The Financial Experts Own – Lawrence Ian Geller

January 7th, 2016

lawrence geller headshot
Lawrence Ian Geller

Lawrence Ian Geller

President - L.I. Geller Insurance Agencies Ltd. 

1. What Type of Life Insurance do you own?

Whole life, non participating and universal life using 0 interest rate assumption, all quick pay (10 years). All but one policy is paid up and that one was a conversion of a T5 policy that was done in 2015.

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

We are good savers and have no children. We began our policies in the late 1970's and were buying enough coverage to allow my wife to continue our lifestyle in the event of my early death. We now have no real need for the coverage but hate to give up a good thing.

3. Do you believe in Life Insurance for Children?

Yes. My grandfather and then parents purchased insurance on my life when I was very young and, although the amount now seems insignificant, the policies have good cash values and currently are directed to charities.

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

Assuming that they will only need insurance for 10 years or less for their family income needs. Few, if any, of our clients have ever been in a position to cancel their insurance after the initial 10 year term although many delude themselves by thinking, just another 10 years. Many, as they approach normal retirement realize that they haven't saved enough and when they die their spouse is often in a position where more funds than are available are needed.

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

Disability Income Replacement; Loss of Future Earnings Disability coverage; Critical Illness Insurance; Business Overhead Disability Insurance; Out of Province / Out of Country Travel Insurance.

Lawrence Ian Geller is the President of L.I. Geller Insurance Agencies, where he provides client oriented service, offering unbiased, third party analysis and recommendations on request.

Lawrence has contributed to several industry publications, including the Globe and Mail, Physician's Financial Monthly, The Health Insurance Underwriter Magazine, Health Insurance Underwriter Magazine and The Toronto Life Underwriter. He is also the Founder of, an internet based discussion board for members of the financial services industry.

<Back to Life Insurance – What The Experts Own

Weekly Personal Finance Roundup For December 25, 2015

December 25th, 2015
Weekly RoundUp Christmas

We rounded up recent articles below from the past week, featuring insights and advice from the brightest minds in personal finance:

The CBC reported that Canada is poised to be the hub of Islamic banking.

Yahoo Canada Finance explained how wage garnishment works.

The Business News Network revealed their top financial reads of 2015.

The Globe and Mail wrote about four mortgage trends to watch in 2016.

The Inside Toronto blog revealed five ways to have a frugal winter fun in Toronto.

Forbes predicted that the number of people using non-bank options to manage their finances will increase in 2016.

The Times Union had a great piece on how financial literacy is sagging worldwide.

Merry Christmas Everyone!

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