Over the recent years, life insurance evolved from receiving the benefit only when someone passes away to now providing discounts at your gym, helping you earn Amazon gift cards, building up a nest egg for retirement, and so much more.
Life Insurance
Life insurance is no longer a doom and gloom product that by its fundamental structure, excluded many people from obtaining it. Premiums have decreased over time (while it seems everything else in the world is getting more expensive). Its definition of what “healthy” is has become more lenient and it now offers more benefits.
If you are HIV positive, you can now get insurance. If you smoke marijuana, you can be qualified as a non-smoker. If you want to earn gift cards for being healthy and active, your policy can give you some. If you hate needles, you may only have to answer a few questions to get insurance without any blood work.
Mortgage Insurance
Mortgage insurance is a form of life insurance that will pay off the outstanding mortgage debt in the untimely event of your death. Here’s where things get complicated.
Many people think that their mortgage offer is conditional on buying the bank’s insurance and that is essentially a mortgage-linked trap – believing that saying no to the bank's insurance will invalidate their mortgage. It is written in the contract of your mortgage, making it seem like you must purchase it as part of the approval. This simply is not true but most people simply say “yes” to the insurance, and then cost is tacked onto your monthly mortgage payments.
Before you check that box on your mortgage, you should know a few things about all your options:
Price
Mortgage insurance through a bank is generally more expensive than for ‘standard’ life insurance.
Portability
If you change banks or sell and buy a new home, you will usually have to apply for a new mortgage insurance policy. ‘Standard’ life insurance, however, stays with you.
Qualification
This is the most important difference between the two types of insurance for your mortgage.
With the bank's mortgage insurance you usually do not have to provide any form of medical evidence of your health. Sounds good right?
This is the tricky part, if something were to happen to you and you passed away, the medical evidence is taken then. If at the time of your passing you had a medical condition that would have deemed you to be uninsurable, the insurance policy may not pay out. This means, you will not get the money to pay off your house.
With standard life insurance the medical evidence is required when you apply for the insurance and once you are approved, no matter that status of your health, you should be paid the full amount of your insurance policy.
Payout
This is another significant difference: With bank mortgage insurance, if you pass away and you meet the medical evidence at the time, the bank will pay off the remaining balance of your mortgage; you cannot use the money as you feel.
It automatically pays off the mortgage balance which might not be the best solution at the time. In addition, the bank's mortgage insurance payout value declines as you pay down your mortgage. So, while you continue to pay the same price for insurance, it is actually worth less.
Alternatively, with ‘standard’ insurance you can leave the money to whomever you wish and they can choose what to do with the money at that time. This insurance will also keep the payout value the same, regardless of how much you owe on your mortgage.
Critical Illness Insurance
Thanks to healthy living and modern medicine, the chances of surviving a critical illness are positive, but recovery can be costly, even in Canada where we have government health care.
Critical illness insurance provides a lump-sum payment to use however you wish as you recover from a serious illness. This could mean that your significant other can take time off to help you recover, pay hotel costs if the hospital is not close to where you live, purchase medicine not covered through provincial health care, etc.
This type of insurance also gives you access to the best doctors in North America to provide you with the valuable second opinion.
Return of Premium
What if you do not become sick with a critical illness? When you add a Return of Premium option to your policy, you can get all your premiums returned to you, tax free, if you do not make a claim on your critical illness policy. It is a win/win scenario. If you become sick from one on the 25 covered illnesses then your policy will pay you the benefit, if you do not become sick, then the policy will give you back all your money.
If you are a business owner, you can set up a corporate policy with a return of premium option included and if you do not make a claim on the policy, the premiums can be returned to you personally. The premiums are paid by both the corporation and you personally, but the total premiums paid is returned to you personally.
Disability Insurance
Many people think disabilities are caused primarily by serious accidents, but that is a myth. A disability can result from a number of causes, including an injury, a serious illness or a mental health issue, and chronic conditions such as back problems and muscle pain.
Personal: Self-employed or Top-Up
How do you plan to live if you can't earn an income? If you are self employed, this is the question you should be asking yourself. Personal disability insurance offers a range of benefits and premium options to suit your occupation, income level and other factors. If you have an employer that either does not offer short and/or long-term disability, you should look at a personal policy to cover any shortfalls.
Personal: Loan Coverage
Unlike other disability products, this one is unique as it does not replace your income but instead pays your personal debts such as mortgage, credit cards, vehicle payments, etc. It also works in combination with other disability insurance you have. This is an important component of this insurance. This will NOT reduce your disability income benefit, it is in addition to it.
Policies that replace your income must adhere to strict guidelines to ensure that your disability income does not exceed your pre-disability income (called integration). Your benefits will be reduced so the total of all your disability benefits do not exceed 100% of your average monthly pre-disability earned income. Personal Loan Disability Coverage does not follow integration.
Business: Buy/Sell Disability
Being disabled is a difficult personal problem to deal with; however, it is also problematic for the other business partners involved. Your business’ success depends on the productivity of a core team of partners; if you or one of them becomes disabled, your business can suffer. You can help protect your business with Buy-Sell Plus disability insurance to finance the buy-out of a disabled partner.
Business: Group
Disability claims can be emotional and stressful events and having short and/or long-term coverage as a value-added employee service can help make their difficult times a little bit easier. Group Disability Insurance is usually part of a group Health and Dental Program but can be purchased separately, depending on your business.
Business: Expense Coverage
If you become disabled, this insurance will pay expenses required to keep your business operating. The expenses typically included are:
Employee Salaries
Rent
Utilities
Property Tax
Accounting and Legal Fees
Insurance Expense
Office Supplies
Utilities & Telephone
Leased/Rented Equipment
Health Insurance
In Canada we are privileged to have a health care system that pay for the vast majority of our health needs, but this does not mean everything is covered. This is, if you are lucky, your employer benefit plan will cover most of the gaps not covered by your provincial health care plan.
If you don’t have an employer benefit plan or if it is insufficient, build your own. We can help you create a health and dental insurance plan that's just right for you, your family, and your budget.
Help cover routine and unexpected health and dental costs
Stay covered even if your health or job changes
Save money if you have three or more children
Some insurers even offer AIR MILES® reward miles
Business Benefits
Are you your own boss or the boss of many? You can create your own benefit plan and the best part, it does not have to be rigid and strict as it used to be in past years. There are many with flexible options to customize it to what you need.
For example, Health Spending Accounts (HSA) are a great alternative (or supplement) to a traditional employee health benefits plans. Eligible business owners who provide HSAs can also deduct all their eligible medical and dental expenses from their gross business income, instead of making them a personal expense. Depending on the nature of the business and the income bracket of the entrepreneur, the tax savings could be significant over having no plan in place. The other best part of an HSA is that you do not have to qualify medically.
If an HSA is not what you are looking for, some of the more traditional plans are available on a guaranteed issue basis where drugs for pre-existing medical conditions are covered. Others require a medical questionnaire and coverage is subject to review and approval. Not matter what you choose, we are committed to offering the kind of customer service you expect and deserve.
It's all about what you want.