Individual & Family Coverage

Individual Life

Life insurance is a type of coverage that pays benefits upon a person's death to designated beneficiaries. In some cases, there may be a maturity date, where the insured, if still living, can receive the proceeds.

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A small premium gives you immediate coverage and provides for a large death benefit payable upon the death of the insured to provide capital to provide an income for dependents.

Tax deferred interest accounts are allowed with some types of life insurance to offer insurance in tandem with an investment component, which can allow increased funds to pass tax free to heirs. This advanced estate planning tool is used by tax specialists who maximize the estate value while using life insurance. The investment after achieving growth can enhance retirement income.

 

Types of Life Insurance:

Life insurance may be divided into two classes:

 

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.

• The cost of insurance for a certain level of death benefit is the essence of this plan, generally with less emphasis on a cash value, though some Term to age 100 plans have cash-out options, and some can be quickly paid up, while some also offer tax-deferral options.

• 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.

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Permanent insurance is also available in many forms including Term to 100, Whole Life and Universal Life. Permanent insurance, as the name suggests, provides permanent protection. Although the premiums are higher initially, the eventual outlay is often lower as premiums for most policies remain constant.

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Permanent Life Insurance plans include:

• 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.

 

Term to 100 policies generally have a level premium for the life of the policy. Premiums continue until the earlier of death or age 100. At age 100, the policy will usually either pay out the face amount or become paid up. In contrast to Whole Life policies, Term to 100 policies do not typically have any cash surrender value.

 

Whole Life policies can be either participating or non-participating. A participating policy shares in some of the gains and losses associated with the underwriting of life insurance (e.g. interest earnings, operating expenses and mortality experience). If circumstances permit and at the discretion of the insurer, the policyholder is entitled to a return on investment in the form of a dividend. These dividends are not guaranteed.

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A non-participating whole life policy does not participate in the insurer's experience. As a result, owners of these policies are not entitled to dividends from the insurer. In contrast to a participating policy, all premiums, benefits and values for a non-participating policy are guaranteed.

Whole Life policies are also available with a limited pay period (e.g. whole life 20-pay). Policies of this type require larger premiums to compensate for the shorter premium payment period. At the end of the payment period, these policies become paid-up. As a result, the coverage remains fully in force without any further premium requirements.

 

Universal Life is a form of interest rate-sensitive policy with flexible premiums and adjustable benefits. It combines term insurance and an investment account with earnings based on current market returns. A key feature of a universal policy is its flexibility. Premium deposits are flexible allowing the policyholder to vary the amount, frequency, timing and duration of premium payments. Subject to an exemption test, Universal Life policies allow the policyholder to make deposits into the policy beyond the amount required to fund the cost of insurance. This can be very advantageous as the cash value of the policy grows on a tax deferred basis and the death benefit is tax-free. Benefits are also flexible allowing the policyholder to increase or decrease the face amount of insurance. The investment component of the policy also provides a great deal of choice to the policyholder. The investment options typically include daily interest accounts, term deposits, index-linked funds and segregated funds.

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Disability Insurance

The chance of becoming disabled for 90 days or longer, at least once before age 65, is approximately 1 in 3. Most people cannot afford to do without their income, particularly for an extended period of time. Disability insurance policies provide a monthly income to the insured during a period of disability.

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The main features of a disability policy are described below. Some of the benefits described are not available in certain policies.

 

DEFINITION OF DISABILITY

This is the most important feature of the policy as it is the basis for determining when the insured is eligible to make a claim. There are three common definitions in use:

1. Any Occupation: unable to perform the essential duties of any occupation for which one is reasonably fitted by education, training or experience

2. Regular Occupation: unable to perform the important duties of one's regular occupation and not gainfully employed in another occupation

3. Own Occupation: unable to perform the important duties of one's regular occupation (even if working at another occupation)

 

Two of the definitions are sometimes combined into one contract. For example, the own "occupation definition" could apply for the first two years of disability with the "any occupation" definition applying thereafter.

 

RESIDUAL DISABILITY BENEFIT

A sickness or injury may not be severe enough to keep the insured totally disabled, but may nevertheless result in a loss of earnings. This benefit pays a proportionate benefit if the loss of earnings resulting from a disability are within a specific range, typically between 20% and 80%.

 

PARTIAL DISABILITY BENEFIT

If the insured is considered partially disabled, in other words, is unable to perform one or more of the important duties of his or her occupation or, can perform all the important duties, but not on a full-time basis, a percentage of the maximum benefit is payable.

 

ELIMINATION PERIOD

This is the period from the onset of disability and the commencement of disability benefit payments. The elimination period can range from 30 days to 2 years. A shorter elimination period results in a higher premium.

 

BENEFIT PERIOD

This is the maximum amount of time that disability benefits are payable when the insured becomes disabled. The benefit period can range from one year to age 65. The longer the benefit period, the higher the premium.

 

COST OF LIVING ADJUSTMENT (COLA)

To reduce the impact of inflation, the disability benefit is increased (annually or semi-annually) by a fixed percentage or by the Consumer Price Index.

 

FUTURE INSURABILITY OPTION (FIO)

This benefit allows the person insured to purchase additional coverage at stated times in the future, without providing evidence of insurability. However, future purchases are generally subject to financial underwriting and maximum issue and participation limits.

 

FIRST DAY HOSPITAL COVERAGE

Provides for payment of the total disability benefit from the first day of hospitalization as long as the insured satisfies the definition of total disability and has been hospitalized for a specified period of time.

 

ACCIDENTAL DEATH AND DISMEMBERMENT

This option provides a lump sum benefit for death and benefits for specific losses due to accidental bodily injuries sustained by the insured and resulting in a continuous total disability.

 

RETIREMENT PROTECTOR

In the event that retirement contributions are interrupted by a period of total disability, this option is designed to help maintain retirement savings.

 

Critical Illness Insurance

Critical Illness Insurance is a plan contracted with a life insurer typically to make a lump sum cash payment if a policyholder is diagnosed with one of the critical illnesses listed in the insurance policy.

These policies can cover serious illnesses that can cause loss of independence, such as the main health threats of cancer, heart attack, and stroke. As well many more illnesses, the list of which we can provide as we go over the insurance planning with you.

The policy may also pay out regular income to a policyholder undergoing a surgical procedure, such as having a heart bypass operation.

The policy may require the policyholder to survive a minimum number of days from when the illness was first diagnosed (usually 30 days).

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Long-Term Care

Many people think that our provincial health plans have generous long-term care benefits. What is not known is that a person must have income and assets below a certain level in order to qualify for accommodation in a long term care facility. Further, many of these government subsidized facilities have waiting lists several years long.

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Long Term Care Insurance is a relatively new form of insurance that is gaining in popularity as our population ages and the government continues to reduce medical services. Long Term Care Insurance provides tax-free benefits when a person is unable to perform one or more of the normal activities of daily living. It provides a daily benefit (e.g. $100 per day) to cover the cost of either having a registered nurse come to the policyholder's home, or for the policyholder's stay in a nursing home.

Recent surveys indicate long term care costs average about $115 per day, or $42,000 per year. The average length of time that care is required is 2.2 years. With certain conditions, this period could be much longer. Consider that the number of Canadians age 80 and over will double in the next 20 years and triple in the next 40 years. With demand growing, these costs are expecting to increase dramatically. Have you included these in your financial plan?

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It is recommended that Long Term Care Insurance be purchased while one is in his/her 50s or 60s as it is quite affordable and one's health is probably still good. The premiums are based on age, health and the type of plan purchased.

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Benefits of Long Term Care Insurance:

• Protection in the event of a catastrophe

• Logical addition to overall plan of risk protection

• Allows the insured to maintain independence and dignity

• Helps maintain control of the insured's life and estate

• Reduces the insured's reliance on family members

• Helps the insured afford the level and type of care wanted or needed

• Premiums are easier to budget than long term care expenses

 

Individual Health and Dental Insurance

Our governments do not provide us with the level of healthcare you may need. As they cut back their levels of healthcare coverage, you may be left to pay for expenses such as:

• Prescription drugs

• Dental visits

• Eye exams

• Paramedical services

• Transportation by ambulance

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Private Health and Dental Insurance plans are designed to cover individuals not protected or inadequately covered by a group health plan. These plans can benefit you by reducing your fees per visit to your dentist or health care provider.

Plans available offer:

• Single, couple or family coverage

• Potential tax-deductibility if you are self-employed

• Renewable coverage through to age 65

• Protection of the entire family, covering health, dental and prescription drug benefits

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It makes sense to consider coverage for unexpected medical expenses that may supplement your current health care plan. These plans generally cover chiropractors, osteopaths, naturopaths, podiatrists, registered massage therapists, acupuncturists, physiotherapists, psychologists, homecare nursing and necessary medical devices and equipment.

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Traveler and Visitor Insurance

These insurance plans can offer emergency medical protection for visitors, immigrants, foreign students and residents who are not covered by government health insurance. Visiting guests can be covered by valid medical health insurance, which begins upon arrival here as long as it is bought ahead of travel.

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Emergency medical expenses

While travelling outside your country or locality some expenses may be partially covered by your government health insurance. There is both daily and annual coverage, which is great if you travel to the warmer climes in the winter or travel year-round.

Travelling out of country, an insured individual is covered by emergency insurance that pays for expenses related to an emergency medical condition (covered by the plan). These expenses may be: a hospital stay, prescription drugs, ambulance transportation, etc. Please refer to the policy for more details.

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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

• Physician or surgeon

• 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

Note: Refer to the policy, which can vary.

 

Non-Medical Insurance

If a person is hard to insure, there are life insurance plans specifically designed for no medical underwriting for a lower face value. The premium may be slightly higher than a brokered insurance plan designed for healthy people.

You will only have to answer the typical questions in the policy application. These plans work best for people who:

• Have previously been turned down by insurers

• Are hard to insure

• Have been long-term smokers

• Are overweight

• Refuse to take a medical exam

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Before you purchase this plan, we can advise you of your options based on your health history, or if there are past failed applications. By searching the market, we will find the most suitable plan for your situation. You may be able to be underwritten by certain underwriters who accept more risk.

We will assess both a regular and/or non-medical life insurance plans and may advise submitting both types of applications. Both traditional and non medical insurance plan benefits are 100% tax-free in Canada when paid to beneficiaries.