Life Insurance Canada News:

News from 2012

Group Insurance Update: Employer Paid Accidental Death & Dismemberment and Critical Illness Premiums Become Taxable Benefits in January 2013

December 22nd, 2012
Even a small company can bring big benefits
Group Benefits will become taxable in 2013.

On March 29, 2012 the Federal Government announced that employer-paid premiums for Accidental Death & Dismemberment (AD&D) and Critical Illness (CI) will become taxable benefits effective January 2013.

More and more Canadian companies are offering group benefit insurance. In a survey conducted by HR Infodesk, 78 per cent of companies polled revealed that they provide their employees with a group benefits plan, and more and more small businesses are able to offer the same.

Starting in the new year, if these premiums are paid by the employer, they must be shown on the employee’s pay stub as income. (Source: Benefits By Design)

For more details, please contact us at 1-866-899-4849 or visit our Group Insurance Quote Page.

Creating a Win-Win Group Benefit Plan for Both Employer and Employee

December 10th, 2012
Even a small company can bring big benefits

Splitting the cost is one way
group benefits can be
a win-win arrangement.

Group benefit plans can be a win-win arrangement for both employer and employee, and Joel Cadesky, a senior account executive specializing in group benefit insurance, spends his days making sure employers see that.

"It's very simple," he says. "You have a plan and you say to the employer, 'This is a very good situation for your employees. The benefits are going to help you because they're going to be happier and healthier people who are more productive. The employee is going to be very happy because now if they're on some medication, some of it is going to be paid for, maybe all of it, depending on the plan design.' But the key is both people win because the employee will get his or her family covered for health and dental when they didn't before, the employer will have a happier, healthier employment situation, and productivity always goes up. Study after study shows that with the plan or without the plan, productivity always goes up for the business with the plan."

(Creating a Win-Win Group Benefit Plan for Both Employer and Employee continued...) | 4 comments

Group Insurance is Not Just Health and Dental Insurance

December 10th, 2012
Group insurance doesn't just
cover chiropractic treatments.
Photo by doctorwonder

Group Insurance doesn't just cover the dental and health needs of your employees. There are also many non-traditional products and features that can be included as part of a group plan. One such product is an Employee Assistance Program [EPA].

"That gives the employee the opportunity to meet one-on-one, privately, and with 100% confidentiality for problems that may not be covered under the group plan," says Joel Cadesky, a senior account executive specializing in group insurance.

(Group Insurance is Not Just Health and Dental Insurance continued...) | 4 comments

Mandatory Generic Drugs on Group Plans: Has Your Broker Explained the Impact?

December 7th, 2012
Generic drugs will be the only variety
group plans will cover from now on.

In an effort to cut drug costs, group health insurance companies have announced that they will now only pay for generic drugs and individuals will be required to cover brand name prescription drugs out of their own pockets.

"In the past, you were able to say to your doctor, 'Just put on the prescription, "No Substitution,"' so insurance companies had to pay the brand name drug premium in full and not the generic drug one," says Joel Cadesky, a senior account executive specializing in group insurance. "What's happening now is it's going to be mandatory generic drugs for all prescriptions."

However, some clients have adverse allergic reactions to generic drugs and must get the brand name. In that case, Cadesky says, you have two options:

(Mandatory Generic Drugs on Group Plans: Has Your Broker Explained the Impact? continued...)

How Can I Pay My Life Insurance With Pre-Tax Dollars Rather Than After-Tax Dollars?

December 6th, 2012

According to Swiss Re, Canadians pay $45.7 billion in annual premiums. Life Insurance premiums are only tax deductible in Canada if one of the conditions below is met:

Canadien money by Duckie Monster
Premiums can be tax-deductible under certain conditions.
Photo by Duckie Monster
  1. If you purchase a life insurance policy and name a registered charity as the beneficiary, you can obtain a charitable donation receipt for the amount of the policy, which you can claim on your taxes as a deduction.
  2. If you are applying for a loan and the institution lending the funds requests that you buy life insurance as collateral, a portion of the premiums on that policy qualify as a deductible expense.

However, even if you can't deduct your life insurance premium, you can still pay the cost of insuring yourself with pre-tax rather than after-tax dollars. How can this be? See below:

A Permanent policy, such as a Universal Life policy, is purchased and an amount above the cost of insurance is deposited into the policy. These funds will grow on a tax-sheltered basis so long as they do not exceed the Maximum Tax Actuarial Reserve (MTAR) limit specified within the policy. Whole Life policies set the premium, so as not to exceed the MTAR limit, and Universal Life policies set a maxium premium, which keeps the MTAR limit in mind.

You can then use this investment component to pay for future premiums, allowing you to pay them with pre-tax dollars as well.

For more details on life insurance in Canada, please contact us at 1.866.899.4849 or visit our Term life Insurance Instant Quote Page and our Whole Life Insurance Instant Quote Page.

Can I Get a Tax Deduction for My Life Insurance Premium and If So, How?

December 6th, 2012

According to the Canadian Life and Health Insurance Association, 22 million Canadians have one or more life or health insurance products. The average amount held by individuals is $169,000, and by households it's $337,000.

A popular question, especially come tax time, is "can I deduct my life insurance premium?" In most instances, including in the case of life insurance purchased by a business, premiums are not a deductible expense. However, there are two exceptions:

(Can I Get a Tax Deduction for My Life Insurance Premium and If So, How? continued...) | 4 comments

Real Life Insurance Stories: Carolyn Davis-Jardine and Her Husband, Dan

December 4th, 2012

Carolyn Davis-Jardine would have never bought life insurance on her own.


As a migraine sufferer with a bad back, she is unable to work and tries to make ends meet on an extremely low fixed income provided by the income support cheques of the Ontario Disability Support Program. It took her second husband, Dan Jardine, to insist that the two get life insurance and he help to pay the premiums before she ever considered it.

Then, in August 2010, four short years after purchasing two $25,000 life insurance policies in each other's name, Dan was the victim of a tragic accident. A laminator by day, he would often help friends with small construction projects that they couldn't do by themselves by night. It was one of those times when he fell off of a friend's roof and fell into a coma. A few days later, Carolyn had to make a heart wrenching decision:

"I had to pull the plug. Dan's body was so badly damaged and, according to the doctors, he wasn't going to come out of it," she says. Because I love Dan to pieces,  I mean, I loved him so much, I went through a very hard time where I couldn't even talk or call anybody."

carolyn and dan
Carolyn Davis-Jardine
with husband Dan
in happier times.

Understandably, making an insurance claim was the last thing on her mind. So, while both policies were originally bought with funeral expenses in mind, she ended up cremating Dan and having a small backyard B.B.Q. memorial service. Besides, she says it's what Dan would have wanted. But when she finally did get the claim started a couple of months later, LSM Broker Tamara Humphries told her that she was in for a very pleasant surprise.

(Real Life Insurance Stories: Carolyn Davis-Jardine and Her Husband, Dan continued...) | 2 comments

Canada Purple Shield’s Funeral Expenses Policies

December 2nd, 2012
disability insurance by Joe Hall
Canada Purple Shield policies come
with a number of options.
Photo by Joe Hall

Purple Shield has been offering final expense solutions in Canada for over 50 years. Its policies are sold by its in-house sales team and are underwritten by Assurant Life, which is a member of the insurance company insurer Assuris.

A.M. Best has given Assurant Life an "Excellent" A rating as an indicator of its financial strength. Assurant Life of Canada’s parent company, Assurant, Inc., is a provider of specialized insurance products and related services in North America and selected international markets. Assurant, a Fortune 500 company and a member of the S&P 500, is traded on the New York Stock Exchange. It has over $24 billion in assets and $8 billion in annual revenue.

Purple Shield offers a full range of payment options, from a single payment to paying over 20 years. Depending on how the applicant answered the health questions asked, coverage can start from day one or the death benefit can be deferred, meaning if the insured dies within the deferred period, the death benefit is limited to a return-of-premium plus interest.

(Canada Purple Shield's Funeral Expenses Policies continued...) | 8 comments

How do I know My Life Insurance Policy Will Pay Out and What is the Process?

December 2nd, 2012
Canadien money by Duckie Monster
How to make sure your
policy pays out.
Photo by Duckie Monster

Most life insurance policies purchased in Canada are traditional life insurance policies that have a full series of health and lifestyle questions. The insurance company also usually requires a medical test be completed.

The older the applicant and the higher the face amount, the more stringent the requirements. For example, policies over $1,000,000 usually require a urine test, blood test, and for older applicants an ECG. In addition, a doctor's report is also usually requested for older applicants or applicants with some health issues.

As long as the questions are answered truthfully and the death is not the result of excluded circumstances or suicide in the first two policy years, the benefit will pay out to the beneficiary. Please note that certain non-medical life insurance policies limit the payout on non-accidental deaths to a return-of-premium during the first two policy years.

(How do I know My Life Insurance Policy Will Pay Out and What is the Process? continued...) | 2 comments

Real Life Insurance Stories: Lisa Harbinson and Her Mother Joyce Truman

November 30th, 2012

Lisa Harbinson wanted a new life insurance policy for her mother, Joyce. She thought mom was paying too much at over $100 a month for a $10,000 term policy that she had borrowed money against and now had to pay back.  Obviously, Lisa thought it was also definitely time to look for a more reasonable plan that wasn't about to expire.

She also began to research the cost of funerals so she could purchase exactly the amount she needed to give her mother a proper send-off, but little did she know at the time, that send-off would come too soon.

(Real Life Insurance Stories: Lisa Harbinson and Her Mother Joyce Truman continued...) | 14 comments

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