Life Insurance

Term Life

  • Insurance is less expensive but most term periods are only temporary.
  • Temporary periods are set in periods such as 5, 10, or 20 years; or a lifetime level term to age 100.
  • Other periods can run to age 65, 75.
  • The premium remains constant for these terms.
  • You can buy more term coverage for less premium, which does increase upon each term period renewal (for example a five-year term rises in cost in the sixth and eleventh year and so on).
  • Term insurance usually can generally be converted to Permanent Life Insurance coverage without medical underwriting, but check with your advisor about renewal and conversion options when you plan to buy a policy.

Permanent Life

  • Whole Life, offering a level premium and a cash value table in the policy guaranteed by the insurer;
  • Limited Premium Payment, where the policy can be paid up fully in a specific period of time (such as over 10 or 20 years; or paid up at age 65).
  • Endowment Life where the cash value grows to a level equal to the insurance coverage, and
  • A hybrid mixture of life insurance and investment referred to as Universal Life.

Life Insurance From the Bank vs. Personally Owned Life Insurance

Bank Insurance

  • Premiums can be much higher
  • Premiums do not reduce when your mortgage debt is reduced
  • The death benefit only pays off your remaining mortgage debt
  • The contract stipulates that the financial institution is the only life insurance beneficiary
  • The entire amount of life insurance is lost upon mortgage repayment, or when in default
  • The mortgage life insurance is not transferable to another financial institution or private lender
  • When you move your mortgage to another firm, you generally lose the coverage issued  from an existing institution.  If your  health   deteriorates you may not be able to buy more coverage
  • Underwriting is often done at time of claim  this could result in your claim being denied if you have not answered  the health questions accurately
  •  Creditor insurance may cover two parties who jointly mortgage their property. However, it pays only on the first death, even if the two were to die together.  When one spouse dies, creditor insurance no longer covers any survivors. In contrast, by owning your own insurance policy, two spouses or partners may each own separate life insurance death benefits. In the case where both parties die, double the benefit would be paid, thus adding increased value to the estate. If one survives, the coverage on that life continues.

Personally Owned Insurance

  • You can set up multiple beneficiaries, including a fund to pay off some or all of your mortgage debt.
  • Beneficiaries can choose to not pay off the mortgage if they prefer to pay off higher interest debt
  • You can add or revoke beneficiaries.
  • Your life insurance face benefit amount does not shrink with a reducing mortgage debt, and can actually increase with some plans. Your coverage level  is controlled by you.
  • Most term plans are convertible to permanent plans, without a medical exam, even if your health declines.
  • You needn’t qualify for new mortgage life insurance if you move your mortgage to a new financial institution. You just continue using your existing term plan, which covers you regardless where your mortgage is.
  • Once your mortgage is repaid or reduced, you will have life insurance to cover other liabilities or for other estate planning purposes.
  • Personally owned  life insurance can normally be converted to permanent insurance for the same or a lesser amount.
  • In most cases, you can reduce your coverage over time to ensure the proceeds pay your final expenses, removing  financial burden from your loved ones.
  • Term insurance allows you to buy the amount of coverage you need to cover all your debts.
  • A custom life insurance plan often offers other optional benefits, such as riders that can include: life insurance coverage for children, an investment feature with tax advantages, disability and critical illness coverage, or a bundled mixture of term and permanent life insurance.
  • Many plans offer level premiums for longer periods, and some life insurance plans can be prepaid.
  • You have more control over the cost of premiums.
  • Your insurer underwrites your policy when you apply for it

Critical Illness Insurance

Critical Illness Insurance is an insurance contract with a life insurer that pays a lump sum cash payment when a policyholder is diagnosed with one of the critical illnesses covered under the insurance policy.These policies typically cover 22 critical illnesses including cancer, heart attack, and stroke. Some policies offer a return of premium if you reach a certain age and never make a claim. Policyholders are required to survive a certain number of days from first diagnosis (usually 30 days). If you do not survive your estate may be entitled to a refund of the premiums that you paid.

Disability Insurance

Disability Insurance provides a monthly income in the event you are incapacitated, and incapable of working due to an injury or illness. Often called “Income Replacement Insurance”, this coverage is important for self-employed individuals. It is also for those without disability insurance via their employer.. Your ability to pay bills or save for retirement could decline. Disability insurance plans are designed to help you meet necessary income requirements enabling you to concentrate on recovering from your disability and returning to an active income-generating life.

Generally, disability benefits are paid if you can’t perform the duties of your own occupation, a similar job in your field, or any job at all. How soon and for how long you can collect benefits is determined  by your policy contract.  Disability insurance benefits are payable on a monthly basis during a disability for the benefit period of the contract, which can vary. When you recover from a disability, the policy continues, usually payable again for a subsequent or recurring disability.

Individual Health and Dental Insurance

Health and dental plans pay for expenses such as:

  • Prescription drugs
  • Dental visits
  • Eye exams
  • Paramedical services – chiropractor; massage; naturopath; physiotherapy
  • Ambulance

Travel and Visitor Insurance

Travelling out of country, an insured individual is covered by emergency insurance that pays for expenses related to an emergency medical condition. These expenses may be: a hospital stay, prescription drugs, ambulance transportation, etc.

Coverage can include these expenses:

  • Bedside companion travel and sustenance allowance
  • Ambulance transportation
  • Diagnostic (X-ray, lab tests)
  • Hospital (semi-private room)
  • Flight and travel accident coverage
  • Prescription drugs
  • Return transportation to location of travel departure if emergency medical attention is needed
  • Emergency dental treatment by a licensed dentist and associated cost of prescription drugs
  • Accidental injury, dismemberment, or death by accident during travel
  • Loss/damage of baggage and personal effects
  • Trip cancellation and interruption

Mortgage and Lines of Credit

Looking for an option other than the Bank. Consider a mortgage and Line of Credit from Manulife Bank http://www.manulifeone.ca/about-manulife-one

Group Benefit Coverage

Group insurance plans can include a combination of coverage, including:

  • Group Life Insurance offers financial assistance in the event of the plan member’s death. A Group Dependent Life Insurance plan pays out a lump-sum benefit to a beneficiary in the event of the death of a plan member’s spouse or dependent children.
  • Group Short-Term Disability (STD) or Weekly Indemnity is a benefit that compensates an employee for income lost due to a short absence from work due to an accident or sickness.
  • Group Long-Term Disability (LTD) coverage provides an income to a disabled employee unable to perform the duties of his or her own occupation.
  • Group Extended Health Care Benefit supplements medical costs for plan members and dependents otherwise not included by provincial healthcare.
  • Group Dental Care covers varying dental services and/or supplies for plan members and their eligible dependents.
  • Employee Assistance Plan is a professional counselling and referral service sponsored by the employer to provide service to employees and their family members.
  • Vision Care pays for routine eye exam and a percentage of eye glasses and lenses.
  • Critical Illness provides a benefit paid to an employee after surviving a covered critical illness to provide financial assistance while adjusting to any change of lifestyle during recovery.
  • Group Pension Plan is a program maintained by an employer to fund retirement income to employees.
  • Health Care Spending Account (HCSA or HSA) is an individual employee account that reimburses eligible health care expenses or other benefits not covered by provincial health insurance. This offers a tax-effective way to offer health and dental benefit choices for self-service to plan members.
  • Administrative Services Only Program (ASO) enables large employers to self-insure health insurance, dental care and short-term disability insurance benefits by supplying administrative functions for their health care claims processing with methods to contain costs.

Group Pension Services

  • Strategic Planning for Retirement using RPP’s; RRSPs; RRIFs; LIRAs and LIFs
  • Communicating with Employers to offer the best plan to employees
  • Communicating with Employees to ensure each employee understands the pension plan and  their options
  • Ensuring that all documents required by OSFI are completed  and filed with the Pension Regulator
  • Monitoring the Pension Plan

Call or email us for a personalized plan for your company or group.

Ph: 780 264 5005
andersonfinancial@live.ca