Life Insurance FAQ

[faq summary Life Insurance FAQ]

[faq list Life Insurance FAQ]

[faq ask Life Insurance FAQ]

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  • MS
    October 2, 2013 at 3:00 pm

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

    • LSM Insurance
      October 2, 2013 at 3:19 pm

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

  • LSM Insurance
    May 30, 2012 at 12:51 pm

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

  • Scott
    May 30, 2012 at 11:38 am

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

    Is this acceptable?

  • LSM Insurance
    March 6, 2012 at 3:55 pm

    Thanks for sharing your comments and your kind words.

  • ken
    March 6, 2012 at 1:08 pm

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

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

  • LSM Insurance
    January 18, 2012 at 9:56 am

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

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

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

  • Nelly
    January 17, 2012 at 9:24 pm

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

  • Mark
    September 11, 2011 at 1:38 am

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

    Thank you.

    • LSM Insurance
      September 11, 2011 at 8:14 am

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

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

  • Clark
    August 25, 2011 at 11:18 am

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

    • LSM Insurance
      August 25, 2011 at 11:23 am

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

  • LSM Insurance
    August 14, 2011 at 12:50 pm

    Unfortunately there are bad apples in every profession.

    The majority of insurance agents/brokers provide quality advice.

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

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

  • CM
    August 14, 2011 at 11:02 am

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

  • Edna
    March 7, 2011 at 11:58 am

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

    • LSM Insurance
      March 7, 2011 at 12:07 pm

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

    • LSM Insurance
      March 8, 2011 at 3:44 pm

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

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

  • LSM Insurance
    November 9, 2010 at 8:06 pm

    Thanks for the note.

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

  • Wendy Watmough
    November 9, 2010 at 7:39 pm

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