7 Life Insurance Troubles

1. To try and make you part with your money, some unscrupulous brokers will try to get you to purchase supplementary or new policies which gives them more income. Moving them often does make sense, as term charges have decreased across the board in recent years. If you have a whole life or universal scheme, be wary if you are considering cancelling them. Many such plans are locked in at agreeable rates and carry big surrender charges.

2. Be wary of non-medical life insurance policies These policies carry higher premiums and lesser face amounts than traditional life insurance policies. For the first two years of a death benefit scheme the return is often limited to return of fees and the interest. Non-medical life insurance can be a very good fit in some instances but these policies are designed for applicants with significant health issues.

3. The unsuspicious customer can easily be led into acquiring accidental death policies. While they may seem like a good idea when you are buying them, be aware that less than 3% of insurance claims are due to accidental death. The equivalent term policy is often cheaper than any of the accidental death policies for sale.

4. Captive agents are only licensed to sell their own companies products, so be very wary of them. Insurance companies employing captive agents usually charge bigger fees than do insurance carriers employing independent brokers. The next issue with captive agents is that they can’t look around for the best product for your lifestyle and the best value for you.

5. Fees involved with the initial premiums can be off putting, but when looking at your life insurance premiums, work out the total cost instead. A marketing strategy used by lots of insurance organizations is low initial premiums. If you are looking for short lived insurance then the term plans offering reduced initial premiums which increase with age can be a good bargain. Whilst plans are offered to the consumer in the belief that we all have the same needs, this is definitely not the case. As individuals, insurance businesses, need to look at what the consumer requires.

6. Be knowledgeable of policy exclusions. Every life insurance policies have a two-year suicide exclusion. Recreational activities and travel may be excluded from your scheme if they are being done when you put the application in. As these exclusions and guides are different depending on which business you select, make sure your broker can look around for the best scheme and is up to date on their guidelines.

7. Although insurance organizations can’t contest the information you put on your documents, usually after two years (standard incontestability period of Canadian life insurance policies), it won’t stop them pursuing you on criminal charges if you lie or avoid filling in the application accurately. Up to the two year period an insurance business can question a claim if they think the customer did not fill in the application correctly, or withheld information.

What does the outlook hold for the Canadian economy?

Although other countries may be struggling, the Canadian economy has been well adapted. A sound financial system, speedy housing market recovery, solid social and health care networks, abundant natural resources – all these factors were supposed to make recession brief and not very painful. As for the future of the economy, well, this is still extremely uncertain.

We can hardly find so many contrasting opinions on the future state of the Canadian economy, than during this autumn. The members of the international organization OECS have seen the recession coming to a finish, some authorities still say that the Canadian economy is not to be taken at face value

The Bank of Canada surmised 2% growth of GDP for Q3; unfortunately August 0.1% contraction was a icy shower. The confident growth seen in alot of industries, have grown due to direct stimulus action. Now, Q3 GDP is anticipated to be flat and it’s the Q4 which should be finally credited with introducing some growth (3.3% if you want to believe BoC forecast or 2.7% if you prefer OECD professionals) Minister Flaherty says that we need to be careful even though the economy is recovering, it has still not fully restored. This is not an isolated thought, but something many agree with.

According to a new report from Reuters, despite thinking the Canadian economy is flexible, private equity investors are cautious and prepared for the option of a double dip, delaying plans for initial public offerings. “I think people are planning for things to get worse,” said Steve Dent, a partner at Birch Hill Equity Partners. What’s the way onwards for Canada? Buyout investments were a bit over $2.0 billion during the first three quarters, however the identical period of 2008 recorded $8.5 billion.

There is little elation between the experts and the economists. “This is going to be a period of no growth and false recoveries that don’t last”, declares Edward Safarian who is one of Canada’s looked up to economists Mr Safarian is fearful the the excessive capacities built could cause long term difficulties, even though the recession was halted in Canada. While unemployment figures may look well now, with the return of a multitude people to the workforce this could change. To try and avoid the return of the recession, the government needs to be careful when retiring the stimulus. In October the consumer confidence index was 84.7 points and then fell to 79 points in October, a sure symptom that customers are taking in these negative comments.

Dale Orr Economic Insight has put forward a warning in it’s latest report and is something that should be thought about carefully. Even when the GDP gets over zero, it’s per capita product is still challenged as the Canadian populace increases at over 1% per annum. So with 0.4% growth in 2008 our living standards started dropping even before the recession actually arrived.

LSM  Disability Insurance wishes All the best in the New Year

Seniors Life Insurance: Six Aspects to Contemplate

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The Canadian marketplace has changed dramatically for seniors looking for life insurance. Despite insurance companies look more carefully at applications the actual premiums, in most cases, are a lot lower.

When purchasing this type of insurance as a senior citizen there are six predominant factors to think about.

1. Many insurance businesses now supply life insurance to people up to age 85. What you need to be conscious of, is there can be a large difference in the premiums available the older you get. If you look at the rate’s today you will find that this is the perfect time to search for and buy life insurance.

2. Face amounts can be as little as $5,000 and premiums can be as little as $20/month. If you are looking for traditional life insurance and want a quick life insurance quote, search no further.

3. The majority of us will discover that creditor insurance schemes normally stop by the time you are 69. For those of you coming up to retirement age or have in fact retired already, rather than looking at creditor insurance you should look at individual life insurance, particularly if you are in good health.

4. If you fortuitous enough to be in good health with an excellent family health history you could certainly qualify for the preferred rates.

5. Another option to investigate, which usually comes with smaller premiums, is last-to-die coverage which is provided at most insurance companies. This type of insurance is used largely for estate planning and pays out a tax-free death benefit upon the passing of the last surviving spouse. It’s because the the insurance monies are paid out further in the future that the price are substantially less.

6. If you do have some health issues then think about Simplified Issue policies. These plans do not have medical examinations, but they do have health questions. When picking which company you should go with, have a look at the medical questions; choose the one you can answer no to the most. With a two year waiting period for the death benefit and very big charges, think carefully before looking for plans that require no medical details.

How Does Obesity Sway Life Insurance?

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Much like the rest of the planet, Obesity rates in Canada are firmly increasing. In 2004, the Canadian Community Health Survey stated that 23.1% of those 18 and older (an estimated 5.5 million adults) had a Body Mass Index of 30 or more, making them obese. Falling below the obesity level but still overweight was another 8.6 million Canadians.

For those that are overweight or obese purchasing life insurance is more complicated to buy due to the direct health problems that go hand in hand with weight issues such as heart disease and diabetes. The four categories of traditional life insurance are as follows:

Preferred Rates: For those that are totally healthy and have a family history of outstanding health.
Standard Rates: The rates the majority of individuals receive.
Rated/Substandard: Given to applicants who have a bigger risk classification.
Declined: The customer is denied coverage.

For an example – a male that is 6′ and weighs 265lbs and no health problems can buy life insurance at the standard rate; according to an in-house report between six life insurance companies.

Furthermore, the issue with obesity is that it often leads to other health conditions and insurance underwriters compound risk variables to decide the classification given. If you are obese find yourself a reputable broker as they are able to help obtain a fair premium for you.

To make matters worse most insurance companies use the identical height and weight tables for both male and female clients therefore it’s imperative that the insurance company is knowledgeable of any lifestyle issues. Simplified Issue Life Insurance is another alternative for obese individuals. Limited health questions and no medical assessments are the main advantage of these plans. With an enhancement in payment options over the last few years they are not as poor value as before.

For more information, visit our instant life insurance quote calculator.

Life Insurance as an Investment – Advisable or Not?

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There are two basic types of life insurance policies: term insurance and permanent life insurance. Term insurance policies are generally prepared to cover you for a temporary period of time, usually 10 or 20 years. With a permanent policy, the insurance can go on for your lifetime. If you buy a permanent policy, there are three additional groups of these: Term 100, Universal Life and Whole Life. Universal Life and Whole Life are available in multiple variations. The best insurance for you and your situation can be found in cooperation with a qualified insurance advisor.

When you pay the premium for a Whole Life policy, it already includes the investment part, but in case of Universal Life policies, it is paid separately. Another difference is that for Universal Life policies, the variety of investment possibilities is wider. When you are deciding for the best life insurance, the key aspect is that it should fit your situation and needs. Supposing your needs are met and a permanent policy is within your budget, the following question is whether it’s a sound investment?

There are a lot of different and often contradictory opinions on this subject, partly as not many people really understand the topic of life insurance as an investment. The following are the pluses and disadvantages of using life insurance as an investment:

Advantages

* Earnings within the policy and the MTAR limits increase on a tax sheltered basis. Whole Life policies set the premium, so as not to exceed the MTAR limit, and Universal Life policies set a maximum premium, which keeps the MTAR line in mind.
* The face amount can be extended with the investment part on an increasing death benefit Universal Life insurance and the dividends on a Whole Life policy. These are added to the face amount and paid out tax-free.
* On a permanent policy, you can use the investment part to pay for future premiums. This way, you will be able to pay with pre-tax dollars, rather than after-tax.
* The minimum investment rate guarantees are adjusted to more than 4% in case of numerous Universal Life insurance products. This is a perfect feature for the risk adverse investor in today’s low interest rate world.

Disadvantages

* Permanent policies often have surrender penalties if the client cancels the policy within the first few years.
* Generally, it is not a great idea to purchase a permanent policy, if you don’t need a permanent life insurance, as the mortality charge for the life insurance would be higher.

Five Reasons against Buying Your Life Insurance Policy Online

You might think that as a life insurance brokerage with a specialization in the online marketing of life and health insurance, we probably shouldn’t publish articles with titles like this one. Our website has thousands of visitors every day, many of them contacting us with questions about possibilities of purchasing an insurance policy directly online. After pondering on this idea for a long time, we came to a conclusion that purchasing life insurance online would mean a disservice to our clients.
The following supports our reasoning behind why purchasing a life insurance policy online just doesn’t make sense:

1. Life insurance, when bought directly via a website, is looked at on a singular level and not as part of an overall financial portfolio. When reviewing life insurance, careful planning should be put into determining why the insurance is needed, how much is needed and what’s the optimum type of life insurance for a specific need. It is quite difficult to do this without speaking to a broker over the phone or in person.

2. The websites where you can directly buy a life insurance policy offer only a limited product selection. Most companies selling life insurance online limit their portfolio to a few carriers and in some instances, just one carrier with just a few of their products.

3. When you buy your insurance online, there is a danger that you might not fully understand all its features. When you buy your life insurance online, you might be surprised later about some nuances – for example certain ten-year term policies are not renewable or convertible, or may carry a higher than usual renewable premium, and so on.

4. Many insurance policies just belong to things that are too complicated to be sold online. There are too many details in some policies (for example Universal Life or Whole Life insurance) that cannot be disclosed when the policy is sold directly online. BMO’s Universal Life policy offers over 400 investment options. There are just too many details in the whole plan, which makes it difficult to be purchased online.

5. Any further communication would likely be with a call centre and not a broker.

Just to be understood right – of course the Internet is a valuable source of information when buying life insurance. You can find out all sorts of great information concerning life insurance on the Internet. Our Instant Quote Calculator or Needs Analysis Calculator are just a few examples of great tools when looking for a life insurance policy. But looking for information is very different to purchasing.

Sales are decreasing severely for the US Life Insurance

LIMRA International have announced this is the biggest fall since 1942 over the last six months for US life insurance. Bloomberg News reports that individual life insurance sales have dropped 20% in the second quarter of 2009 because savers avoided investments associated to stocks.

This however is a totally separate story in Canada. Steady and Whole life term policies have been used to offset losses which were 6% fewer than the US. All told, there has only been a 1% decline in annualized premiums so far in 2009.

A personal budget may be more inflexible in the US, but the majority of US citizens will still have life insurance as the basis of their financial planning. Without sufficient life insurance, an accidental death can create a financial tsunami in the typical household. For family members left behind, life insurance policies provide security from monetary issues.

Life Insurance plans don’t have to destroy the bank, there are ways to decrease your premiums. The tips below show you how to save dollars, whilst still buying the best deal for you.

Avoid accidental death insurance. Innocent customers are pushed to purchase this insurance by lots of Canadian insurance companies. With just over 2% of accidental death policies paying out they make a extremely profitable income to the insurance companies but a waste of your hard earned cash for you. When comparing this policy to a term policy the majority of the time the term policy is less expensive.

Keep an eye out for captive agents. They can only sell that organization’s goods. In comparison to companies that hire independent brokers, companies hiring captive agents often charge much higher premiums. When an agents is tied into one organization’s policies they are unable to browse for policies that best meet your needs or your pocket.

The cheapest policy is not consistently the least expensive. Look at the complete expense of your policy, there may be a big price increase later which could work out more expensive in the long term. A ruse insurance companies use to obtain your business is offering reduced premium introductory offers. Making the most out of low initial premiums works if you only want insurance on a limited basis rather than long term. The issue is, many brokers engage a one-size-fits-all principle. Many brokers and agents want to sell the policy and get out as quickly as possible, and not spend time working out what the best policy for you actually is.

See if you can locate a company selling preferred rates. The variation between preferred and standard rates can be very meaningful, particularly for term policies. A 40-year-old man, non-smoker would pay $62.55/month with Equitable Life for standard rates on a $500,000 Term 20 policy. The scheme would cost $44.55/month if the same male qualified for preferred rates. Preferred rate calculator – click here to see if you are eligible.

Make sure you are not over insured. To find out if you are over-insured and what insurance you may need try our Needs Analysis Calculator.

Don’t try and go it alone, use an independent broker. A broker that has access to the whole insurance market is more likely to accomplish your requirements than someone who has only got access to their own company or one or two others.

Is Canadian Tire Term Life Insurance all its cracked up to be?

Canadian Tire is Life insurance is not just backyard furniture and power tools as the name brings to mind. Their insurance plan was adjusted and put out to the people. A marketing drive was created by this firm whose underwriters are Canada Life. Below are the details of the Canadian Tire Term Life Insurance Plan. Applying is not difficult, you can do it by calling, mail or on the internet. There are seven health questions to fill in. You may find you have to provide more detail or be subject to a nursing visit if any of the questions are answered yes to. A critical illness plan provided by individual brokers is not the same as the terminal illness benefit provided by this plan.

I can’t see what the difficulty is: So explain it to me please.

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We are now going to consider the Canada Life individual term life plan to the Canadian Tire Scheme. Payments are a lot higher on the Canadian Tire plan. These increase by $40 for a 40 year old male smoker. The Tire Term plans are considerably higher for the same type of policy. The adaptability and modification of these types of policies are not available on the Canadian Tire policies.With limited benefits of $250,000 and the policies running no longer than 5 years, we are now starting to see the imperfections in this policy. Also there are extra premiums on this plan of PST. You can add riders to individual plans which give your additional benefits. Also you can combine it with another plan if you require. As the Canadian Tire Term Life Insurance plan is a group plan, you don’t get the tailor-made and personal advice of a broker to lead you to the best resolution for your situation. To give a run down: Although the Tire Plan looks great on paper your will be better off with a personal plan which suits your personal lifestyle. To find out more about the Canadian Term Life Insurance, please refer to our more detailed article.

How does an insurance agent earn their monthly paycheck?

All insurance agents, both captive advisers (those working for a single company) and independent advisors (those working for multiple companies) are usually paid commission when an insurance policy is put in force. If you decide to cooperate with an insurance broker, there are two main advantages for you: you can get the best rate on the market, and the broker will help you to choose the most suitable type and amount of coverage for your situation. Of course, the broker gets his/her commission paid from the insurance company. However, the media and consumer scepticism has done a lot to create misunderstanding. The following are points often misunderstood regarding the payment process.

“Life insurance commissions drive up the price of the policy.” Life insurance policies, whether sold by salaried employees or self-employed advisors, have distribution costs. With the price of the insurance product, you already pay also the cost of distribution. RBC Insurance, Manulife or other companies using multiple distribution models for their life insurance products usually charge the same rates no matter how the customer buys the product. The Manulife call centre, website or an independent broker will always sell you their $200,000 Term 10 insurance for the same price. “Life insurance commissions are negotiable.” Life insurance commissions are not negotiable. The situation is different from when you are buying a car or a house. Once again, the commissions are built into the distribution costs of the insurance and cannot be altered.

“The commissions for Whole Life or Universal Life insurance are higher than for Term Life insurance.” The life insurance commissions depend largely on the policy price. So the broker gets more money for a more expensive insurance. The initial price of Whole and Universal policies is higher than for Term policies, but these are bought only once. Term policies increase in cost as the insured gets older, so they will buy multiple term policies over their lifetime. Every time a new policy is purchased, the broker gets paid the commission, but also the applicant is older each time, so he/she has to pay a higher insurance rate. If the applicant’s health status has changed, the insurance rate will be also higher or, in some cases, the coverage won’t be available. The insured people should always understand how the various life insurance policies are structured so that they will be able to determine how much life insurance they need. “The commissions paid by some insurance carriers is better than from others.” Commission rates can vary slightly from one provider to another, but regarding that insurance commissions are a fixed cost within the policy, this should have no impact on the consumer decision. It is nevertheless very important that your broker has access to insurance from multiple companies, as some of them, while independent, work only with two or three. We can offer you products from 15 various life insurance providers, so that you always get the best price available on the market.

Photo source: rick

Collectibles insurance: Why not?

Photo source: Chris Devers

Hands up anybody who has ever collected anything in their lives. Most of people at some point started a collection of various stuff like toy cars, match boxes or bottle tops. Generally, after a certain period of time, these valued treasures have been given away or just disposed of.

For sure, there are some among us that have never given up this sometimes strange habit and have turned it into a lifelong hobby There is, however, a certain breed of collectors, who have taken this hobby to a higher level and have diversified their portfolios by investing in valuable coins or stamps.

So, who is the special insurance cover for? Think about this: average homeowner insurance is normally adequate to cover most items of value in your home such as appliances etc. But collectibles are a different matter entirely In certain instances low value collections may be covered, but submitting a claim to the insurer is fraught with difficulties and can often be unsuccessful. General home insurance policies offer no more than the material cost. Of course it is simple to claim for a broken TV set, but try claiming for a priceless rare Roman coin.

So, Mister Collector, what to do if that little collection of yours would cost more to replace than the new car on your driveway? Are you having sleepless nights being scared about its safety? Luckily, you won’t need to worry anymore. There are now special policies tailor made for these collections. AIG and Allianz are but two of many insurance companies that have specialist policies for valuable collections.

If you are a serious collector, it is most likely you will choose an ‘all risk’ policy which will insure your valuables against everything from fire to nuclear attack to ‘mysterious disappearance’ Mysterious disappearance cover is provided for in the Fireman’s Fund policy. Transportation and traveling doesn’t have to be a worry as both are covered in all specialist policies.

Since collections tend to increase in size and value over the years, insurance policy creators have included this in their policies as a way of attracting customers. New additions to your collection can be covered easily with a simple phone call to your policy provider. If you are nervous about going to collect a new addition, then a simple phone call to your insurer prior to going and your new investment is insured.

Obviously nothing can replace your cherished collection, should it be damaged by fire or stolen by some hard-hearted thief.

Nevertheless, if you can be compensated financially for the full value of your investment, then the pain should be more bearable.