Life Insurance
Life insurance provides coverage on the life of an individual, who is referred to as the life insured. Upon the death of the life insured, while the policy is in force, the insurance company (the insurer) will pay the death benefit stipulated under the policy to the beneficiary named under the policy. The person who applies for, and generally owns the life insurance policy, is known as the insured or the policyowner.
The primary benefit of life insurance is that it provides a tax-free cash payment to a designated beneficiary. These funds can be used to provide for the ongoing care of loved ones, and to cover taxes and other liabilities in the event of the life insured's death.
Term Insurance
Term life insurance provides protection against financial loss resulting from the death of the life insured during a specified period of time (or term). The policy pays a death benefit only if the life insured dies within the given period outlined in the policy. The period of coverage is usually for 1 year, 5 years, 10 years, or 20 years, or until a specific age, such as the life insured's age 65. At the end of the specified period, the insurance protection ceases, unless the policy is renewed.
Depending on the type of policy, term life insurance coverage may terminate once the life insured has attained the age of 65, or the policy may continue to offer coverage up to age 75. A cynic might suggest that coverage is terminated during this age range because the insurance companies do not want to insure a risk class that represents a higher risk of dying. In actual fact, there are two valid reasons why insurance companies adopt this policy:
Permanent Life Insurance
Permanent life insurance is a policy that provides coverage for the whole of the life of the life insured, rather than for a specified term.
There are three forms of permanent insurance:
Each of these policies requires the payment of premiums in excess of the actual mortality costs in the early policy years and the accumulation of a fund, known as a policy reserve or an accumulating fund. These accumulated funds (including investment income) are used to pay the high mortality costs experienced in the life insured's later years. The treatment of the policy reserve fund varies significantly between the three types of permanent life insurance.
Disability insurance
Disability insurance (DI) is a contract of insurance (a policy - either individual or group) that provides monthly benefits if the insured is unable to work due to an accident or sickness and, consequently, suffers a loss of earned income.
Individual plans usually pay 100% of the scheduled benefits when the insured suffers a major (over 80%) loss of income due to a disability. Many plans also pay a reduced amount to supplement earned income if the insured suffers a reduced level of income (less than 80%).
Why Disability Insurance is Important?
The likelihood of a person becoming disabled before age 65 is much higher than the likelihood of his or her death during that same time. For example, a 45-year-old male faces a 37% chance of being disabled for more than three months prior to attaining age 65. In contrast, the probability of death for this individual for the same period is only 3%.
Your clients buy life insurance to protect their families from economic hardship in case they die, but what happens if a client is injured or suffers a disabling disease and can no longer work or is able to work at a reduced capacity?
Risk management requires that risks that cannot be covered using one's own resources, such as one's savings, must be insured. Few people have sufficient resources to draw upon in the event that they suffer a disability and are unable to generate an income. For this reason, protecting a client against the risk of losing his or her income should be an agent's primary focus.
Life insurance policies insure against financial loss due to mortality (the instance of death), whereas disability policies insure against financial loss due to morbidity (the instance of disability).
In both cases, the insured is protecting his or her greatest asset: the ability to generate income through employment. This income is important for the well-being of the insured and the insured's dependents.
Example
Selena is a 35-year-old lawyer, now earning $100,000 a year. If Selena contracts a debilitating disease, she could suffer a $3,000,000 loss ($100,000 a year for the next 30 years of active working life). In all likelihood, the potential loss would be significantly higher if we assume Selena's annual income will increase throughout her career. To insure this risk, Selena could buy a disability policy that would provide a tax-free benefit each month until age 65.
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Mortgage Insurance
Assuming you use a mortgage to finance your home, it just makes good sense to ensure your investment is adequately protected through an insurance plan – one that will pay off your mortgage should anything happen to you.
But, there is more than one option for insuring your mortgage. Many people are unaware that their lending institution is not the only source for this kind of protection and that better choices may exist. Choices with lower cost and greater flexibility. So, it makes sense to do some shopping and comparing.
Your mortgage lender will usually offer you mortgage insurance to cover the balance owing, if you should die before the mortgage is paid off. But you may also choose to buy insurance directly from your independent life insurance advisor instead. This is often a less costly option and offers much more flexibility.
Your mortgage lender’s joint coverage is very different from the joint coverage you buy directly from an insurance company. With the lender’s coverage, the death benefit is paid directly to the lender on the first death and the coverage ends.
Is mortgage insurance the same as an 'Insured-Mortgage'?
No. Mortgage insurance on your life is not the same as an “insured mortgage.” An insured mortgage protects the mortgage lender in case you do not make your mortgage payments. This coverage is provided by CMHC – Canada Mortgage and Housing Corporation – and is required if you have a “high-ratio” mortgage. (A mortgage is high-ratio if the amount borrowed is more than 75% of the purchase price or the appraised value of your home, whichever is less.)
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Health Insurance
You are not covered by a group health plan or not satisfied with the health coverage you have today, We have health and dental plans may be the answer for you.. Health Insurance is designed to fill the gaps left in your government health insurance plan. Whether your focus is prescription drugs, dental care, or a combination of both, We offers a selection of health plans and levels of coverage from which you can choose Drug and Dental Plan. Contact us, we believe we can cater to your needs in an effective and ethical manner.
Critical illness insurance
What is critical illness insurance?
Critical illness insurance is a form of health insurance that provides a lump-sum payment should you become seriously ill.
What are types of illnesses covered by critical illness insurance?
Although they differ from company to company, typical illnesses and diseases covered by critical illness insurance may include
Coverage can also vary according to the degree of severity of, or conditions associated with, an illness or disease. For example, if you are diagnosed with a type of cancer that is treatable and that results in minimal "down time", you may not be eligible to make a claim Coverage cannot be purchased for a pre-existing condition or illness. It is important to read your policy carefully. In addition, be sure to ask your insurance representative to provide you with a complete explanation of your coverage.
Do I need critical illness insurance?
In determining your need for critical illness insurance, you should consider benefits that may already be available to you through other insurance policies, such as life insurance and group health insurance. For example, the benefits offered through your employer’s group disability plan may provide appropriate and adequate coverage in the event of a critical illness. You should also consider your personal circumstances and the added financial strain that could be brought about by dealing with a serious illness or disease. Public and private health insurance plans typically do not provide coverage for day-to-day living expenses such as travel to and from treatments, home care and child care
Critical Illness Insurance Pt 2
How much does it cost?
Generally, the younger and healthier you are, the lower the premium (cost). However, the cost varies depending on your age, medical condition, the amount of coverage, the number of illnesses covered by the policy, and the insurance company.
It pays to shop around to get the best rate. When shopping for a critical illness plan, you should consider your income, financial obligations, dependents, and health care needs.
How can I make a claim?
You can make a claim if a physician, licensed to practice medicine in Canada and specializing in your particular illness, diagnoses you with a critical illness or disease covered by your policy.
If my claim is approved, when will I receive payment?
Generally, a lump-sum benefit payment will be made to you 30 days after the claim has been approved. There are no restrictions on how you use the money. Once your claim is paid, your critical illness insurance policy ceases.
What if I never make a claim?
If you die for a reason not covered by the critical illness policy, the premiums you paid may be refunded to your named beneficiary. Some plans will return the premium or a portion of the premiums paid during the life of the policy if the policy matures and no claim has been paid.
What if I make a full recovery?
You are entitled to collect the entire benefit even if you make a full recovery.
Is long-term care insurance is same as critical illness insurance?
No. Long-term care insurance provides for personal care on a long-term basis if you need supervision or assistance with daily living activities due to a chronic illness, disabling condition or cognitive impairment.
Long-term care policies generally reimburse, up to a specified limit, the expenses incurred for various types of care, such as nursing home or home health care; or they pay a pre-determined benefit amount on a daily or monthly basis.
Is disability insurance the same as critical illness insurance?
No. Disability insurance, also known as “income replacement” insurance, provides a monthly income replacement benefit if you become disabled and can no longer perform the normal duties of your work. Generally, the benefit is limited to a percentage of your regular income and ceases once you earn an income or you no longer meet the definition of disability in the contract.
Unlike critical illness insurance which provides the full policy benefit in a lump sum payment on diagnosis of a critical illness, long-term disability policies may have a waiting period from the onset of disability. Unlike critical illness benefits, long-term disability benefits may be affected by other income you receive or by your full recovery from the illness.
Where can I get critical illness insurance?
A licensed insurance agent or broker like Hilltop Financial & Insurance Ltd, can help you find critical illness insurance and other types of health insurance coverage. Contact us, we believe we can cater to your needs in an effective and ethical manner.
Business Insurance
The Canadian business insurance market holds tremendous potential for the professional life insurance advisor, especially with the rapid growth in the number of smaller businesses in the past decade. Today, there are more than a million entrepreneurial businesses in Canada whose principals depend on the advisors like you to help them achieve their financial goals.
What happens to a business when a key employee; a top salesperson, manager, partner or product developer suddenly dies? The business could be in serious jeopardy, unless it implements a sound financial plan.
Key person insurance is an integral part of planning for every business. No matter how small, if planned appropriately, it can protect the business against financial hardship if a key employee dies. Often the survival of a business after such a loss is dependent upon this insurance. Fortunately, the process of implementing key person insurance is relatively easy.
Determining the type of key person insurance and the amount needed depends upon the business and the employee insured. There are three approaches to key person insurance:
Approach 1: Company owns the policy and is designated the beneficiary to receive proceeds of the face amount and cash value on the death of the key person.
Approach 2: Key person and company jointly own policy on a reverse split dollar basis – key person pays premiums for and controls the interests in the policy related to the cash value and the company pays the premiums for and controls the interests in the policy related to the face amount.
Approach 3: Key person and company jointly own policy on a split dollar basis – company pays premiums for and controls the interests in the policy related to the cash value and key person pays premiums for and controls the interests in the policy related to the face amount.
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Travel Insurance For Visitors to Canada
Canadians who are not eligible for a government health insurance plan, persons who are in Canada on a work or student visa, or new immigrants who are awaiting government health insurance plan coverage an Emergency Medical Plan that provides coverage for an unexpected medical emergency during your trip; or the Travel Canada Plan that provides emergency medical benefits at half the premium when all your travel is within Canada; or an All-Inclusive Plan if your plans include pre-paid travel arrangements. Includes Emergency Medical, Trip Cancellation and Interruption, Baggage Loss, Damage and Delay, and Flight and Travel Accident. Or you can purchase the Trip Cancellation/Interruption insurance separately.
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Long-term Care
The Long-term Care pays a benefit if the life insured requires care at home or at a facility such as a nursing home. The care must be required because the insured meets one of the following criteria:
The insured is unable to perform at least two of the six activities of daily living bathing, dressing, feeding, toileting, getting in and out of bed or a chair (transferring), and continence.
OR
The insured requires continual supervision because of the deteriorated mental abilities, such as with Alzheimer's Disease.
Long-term care insurance should be part of your financial future. you can take control over the quality of your care, as well as eliminate many out-of-pocket expenses. you receive the care you need in the comfort of your own home. It also provides comprehensive coverage for nursing home care, should you need it.
You can purchase long term Care from age 40 up to age 80. Give yourself the opportunity to live with dignity and not be a burden to your family or a drain on your assets. it provides an important part of your financial strategy, protecting you against what might happen tomorrow.
Contact us, we believe we can cater to your needs in an effective and ethical manner.
