Term Insurance locks in the premium for only for a specified period of time such as 5, 10 or 20 years. After the initial term is over, the premium will automatically renew at increased guaranteed amounts determined at policy issue. This is the most affordable option for short term needs but is the most expensive in the long run if renewals are needed to be maintained long term.

Whole Life insurance is a policy where the premiums never increase. The original policy stays as is for the entire life of the contract. There are many variations such as a whole life with values and twenty pay, but in all cases the cost remains the same. Riders can be added to include other individuals such as your wife and children. Other benefits can be purchased as well, such as a waiver of premium in the case of disability.

Universal Life is a hybrid of both term and whole life. The insurer determines and assumes the cost of insurance and administration, but the insured assumes the investment risk. In this case the premiums are not known for the entire life of the policy.

Riders and Other Benefits

Insurance policies can also include other riders, such as Child Insurance Riders, that can provide an affordable means of providing insurance for a child that can be converted into other insurance types and coverages prior to the contract expiry. Other benefits policies can include are guaranteed insurance options, waiver of premiums, …….. our insurance advisors will review these additional riders and benefits so that you may select the suitable coverages for your personal needs.

Critical Illness is an insurance that pays you tax free benefit if you are diagnosed with a critical illness and survive 30 days. This benefit will help ensure that you can afford the overwhelming expenses that will be required by you and your family while coping with a life threatening disease. The strain of lengthy treatments and long periods of convalescence is debilitating enough without the fear of rising debt. There is no prevention from serious illness, but there is definitely protection for you and your family from financial consequences.

The diseases most commonly covered are:

• Heart Attack
• Stroke
• Cancer (Note: No benefit is payable if cancer is diagnosed within 90 days of policy issue)
• Coronary Artery Bypass Surgery
• Multiple Sclerosis (based on at least 2 episodes)
• Parkinson’s Disease
• Kidney Failure (both kidneys)
• Major Organ Transplant
• Major Organ Failure Requiring Transplant
• Paralysis (90 day waiting period after diagnosis)
• Occupational HIV Infection
• Alzheimer’s Disease
• Blindness
• Deafness
• Loss of Speech (6 month waiting period after diagnosis)
• Dismemberment
• Major Burns
• Coma
• Benign Brain Tumor
• Motor Neuron Disease
• Aorta Surgery
• Heart Valve Replacement

It can be purchased as term to age 65 or 75 and as 5 and 10 year renewable term. There are also plans that cover child hood critical illnesses.

Disability Insurance insures your income in the event of disability. Where will your income come from if you become disabled? Six months of total disability can wipe out 10 years of savings.

Borrowing may not be an option. Who would lend money to someone who can’t work? You could liquidate assets such as your home or car, but would you get a fair market price for them?

You already insure your most prized possessions, but shouldn’t you protect the one thing that makes them possible? Protect your most valuable asset with a disability insurance plan.

How much is enough? Contact your insurance advisor for assistance in determining the amount that best suits your needs.

With the increase in life expectancy and improved medical care, people are living longer. The financial obligations of caring for the elderly over a long term can wipe out an individual’s life savings, impoverish the patient’s spouse, and impose hardships on one’s family. Even worse, the appropriate professional care may not be affordable or covered by provincial health care plans.

Long term care insurance (LTC) is a recent innovation, prompted by the enormous costs that can be associated with the health care needs of the aged.

The health insured is the individual whose health is insured under a health or long-term care insurance policy. As with any other type of insurance, individuals should purchase LTC coverage before age, disease, or incapacity limits their ability to pass underwriting standards. Like all insurance, the cost of LTC rises steeply with age, so the premium will be more affordable if coverage is purchased early. The insured must be between the ages of 40 and 80 at the time the policy is issued.

If the claimant qualifies for benefits, coverage is for life. Long-term Care is subject to an elimination period, which can range from 0 to 180 days. Benefits may be payable either in the case of cognitive impairment (i.e., the inability to think, perceive, reason or remember) or if the claimant can no longer perform unaided two of the five activities of daily living (ADLs): bathing, eating, dressing, toileting or transferring positions of the body.

Terms of a Long-Term Care Insurance Contract

Standard Features – The contract is guaranteed renewable, which means that the insurer cannot cancel or decline to renew the policy. The premiums are level and based on the age at which the contract was purchased. There is 10 days to examine the policy without obligation to purchase it. Also, the contract is portable, which means that it can be used to provide coverage anywhere in Canada, the U.S. and its territories.

Contract Limitations – The contract also has limitations. No benefit is payable for a pre-existing condition unless the period of care begins at least six months after the policy’s effective date. The applicant has a variety of elimination periods, or waiting periods from which to choose. The longer the elimination period, the lower the premium.

Optional Features – Some of the optional features included are waiver of premium and inflation protection and return of premium.

Long-Term Care and Income Tax

The nature of the expense of long-term care insurance is such that it does not qualify as an eligible medical expense. This is not health care insurance and the premiums do not qualify for the medical expense tax credit. However, it is believed that the benefit will be received tax-free.

Parental support

Although the majority of people feel a moral obligation to support their parents in a time of need, many are surprised to learn that they may have a legal obligation of parental support. This obligation to support their parents arises under provincial family law.

Individuals may even want to purchase a long-term care policy on their parents to protect themselves from exposure to the obligation to pay for their parent’s long-term care as they age.

While the premium is attractive there are limitations to group plans.

• There is usually no guarantee of renewability and no guarantee as to the amount of premiums in future years.
• The master policy governing the plan may be cancelled by the insurance company without any provision for continuing coverage after termination. An uninsurable individual may not be able to obtain other insurance at reasonable rates.
• The master policy may be revised through discussions between group representatives and the insurer without the consent or consultation of members. This could result in lower coverage, higher rates or both.
• The life insured must maintain membership in the association or continue with the employer in order to maintain coverage.
• Employee group plans usually limit the amount of the death benefit to a multiple of annual salary. If this amount is not sufficient, it is usually not possible to increase it and other life insurance would have to be purchased.

Mortgage Insurance vs. Term Insurance

Mortgage Insurance is usually sold by the lender while arranging the mortgage and is made payable to the lender, not the insured. The payments remain the same even though the coverage diminishes each month. Purchasing term insurance rather than mortgage insurance can provide so much more:

Term Insurance - Protects your family

Gives you control – you own the policy, choose the beneficiary, and select the type of coverage you want.

Is fully portable – your plan will continue when you move and you don’t have to buy a more expensive policy (if you are older).

Allows shopping for interest rates – upon renewal, you are not tied to one lending institution and can shop around for a better mortgage rate.

Offers you a choice of plans and benefits – you choose the type of policy and benefits you want. Term plans can be converted to a permanent plan without a medical.

Gives you a choice of amount of coverage – you choose the amount of coverage you require and the coverage does not decrease as the mortgage is reduced.

Provides stable coverage – plans have a built in grace period from 30 to 90 days for missed premiums.

Expert advice – you deal with a professional insurance advisor about insurance and all your insurance coverage can be through one broker.

Mortgage Insurance - Protects the bank

Policy controlled by the bank – the bank is the beneficiary.

Not portable – protection runs out when the house is sold or traded.

Inflexible – the mortgage must be paid off upon death regardless of other investment opportunities or needs.

No shopping – unless you are willing to pay a higher premium and are insurable.

Limited choices – limited plans and benefits offered and no conversion privileges.

No choice of coverage amount – coverage must be equal to the mortgage and decreases as the mortgage is reduced (the price does not!). No stability – a missed mortgage payment often means lost coverage.