Health Risk Services Inc. has a number of quality group insurance programs each designed to meet a specific requirement in terms of expenditure and coverage in direct relation to the size of your business and the number of employees you have. Find effective insurance coverage at reasonable and competitive market rates.

Health Risk Services Inc. has a number of quality, extensive business insurance programs each designed to meet a specific requirement in terms of expenditure and coverage. Designed to meet the requirements and structure of your business but also guaranteed to continue to serve your changing needs when and if your business grows, is streamlined or realigned, you can choose the product and design that is best for you:

It is not uncommon to see a business’s profits or surplus cash invested in GICs or taxable investments. These taxable investments may not always be in business’s best investment option.

If the business or corporation already needs an exempt life insurance policy for key-person insurance, business loan protection or some other business insurance need, the policy could also be used as a vehicle for investing the company’s excess profits.

An exempt, permanent life insurance policy allows for tax-deferred growth of the cash value and tax-free receipt of the proceeds at death. The cash value growth within an exempt policy is not subject to annual accrual taxation and is only subject to tax if there is a disposition of the policy.

Significant cash value can accumulate on a tax-deferred basis if the business deposits the maximum amount permitted by the Income Tax Act into the exempt policy. The deposits can remain within the policy on a tax-sheltered basis and pay for the cost of insurance expenses in future years.

If the corporation or shareholder needs access to the cash at some future date, the policy’s cash surrender value can be accessed through withdrawal or a collateral loan secured against the insurance policy.

Policy withdrawals may trigger some income tax at the time of the withdrawal. Advances to the corporation received as a collateral loan will be tax free and if the proceeds are used to earn income from a business or property, and the other requirements of 20(1)(C) of the Act are met, the interest expense may be deductible for tax purposes.

DISCLAIMER: Please be advised that the information on this web site is intended to present a broad variety of general information as simply and accurately for your knowledge as we possibly can.  In no event does this information form part of or apply as a legal document.  Therefore, please note that rules, conditions and industry practices discussed may be changed over time.  Please consult Health Risk Services Inc. with specific questions

E & O Insurance applies.

Business Owners and Corporations are often looking for innovative ways to supplement benefit packages to both attract and retain key executives. One very accepted and effective way of accomplishing their goal is to offer an Executive Compensation Package that could include well designed insurance products such as life insurance, disability insurance and critical illness insurance.

The products can be structured so as to offer the following benefits to the executive:

1. Life Insurance:

  • Can create additional financial security to cover funeral expenses, educations costs, reduce debt and provide future income for the Executive’s family.
  • The coverage is guaranteed and portable and can follow the executive through his/her career and into retirement.

2. Disability Insurance:

  • Carved out from the regular traditional group coverage, these programs will ensure that the executive maintains his/her regular income with the highest standard of coverage when a disability occurs that prevents him/her from continuing to earn income.
  • A Return of Premium can be built into the coverage to reward the executive for remaining healthy. Up to 50% of the premium paid into the policy every 8 years can be returned to the Executive Tax Free.
  • The coverage is guaranteed and portable and can follow the executive throughout his/her career.

3. Critical Illness Insurance:

  • Will provide financial security in the event of the diagnosis of a critical illness for both the executive and their family. This product will pay out a lump sum, tax free benefit to the executive enabling him/her to make decisions regarding their present situation and future plans, without affecting their assets or savings.
  • A Return of Premium can be built into the product to reward the executive for remaining healthy. Up to 100% of the premium paid into the policy can be returned tax free, dependant on how the plan is structured when purchased.
  • The coverage is guaranteed and portable and can follow the executive throughout his/her career and into retirement.

The policy or policies may be purchased by the business/employer, or it may be owned and funded jointly by the employer and the executive. The executive’s dependants would be named as the beneficiary on any portion of a policy requiring a beneficiary designation.

Any employer paid portion of insurance premium must be reported as a taxable benefit to the Executive. It is also important to remember that the amount of premium reported represents a reasonable cost for the benefit received.

For assistance on establishing an Executive Compensation package for your key executives, please give Health Risk Services a call today!

DISCLAIMER: Please be advised that the information on this web site is intended to present a broad variety of general information as simply and accurately for your knowledge as we possibly can. In no event does this information form part of or apply as a legal document. Therefore, please note that rules, conditions and industry practices discussed may be changed over time. Please consult Health Risk Services Inc. with specific questions.

E & O Insurance applies

Many businesses may appreciate the versatility of Life Insurance products in allowing them to use one policy to meet a dual need!  It is not unusual to encounter a business that requires financial protection that life insurance provides against death, either theirs or someone else’s within the company (i.e. Key Man Insurance) while another person needs a tax-sheltered investment vehicle.

“Split Dollar Life Insurance” can provide for the needs of both parties through ONE Life Insurance policy.  In these types of arrangements, on party typically owns and pays for a level death benefit portion of the policy and the other party owns and funds the remaining interests in the policy.

One example of Split Dollar Life Insurance being used effectively is when an employer needs Key Person Insurance on an executive and the executive is in need of a tax-sheltered investment vehicle. The employer and the executive could enter into a Split Dollar arrangement where the employer pays for and owns a level death benefit on the life of the executive and the executive pays for and owns the cash surrender value component of the policy. The beneficiary of the level death benefit is the employer, while the beneficiary of the cash value is designated by the executive who may choose his/her spouse, children etc.

Please be advised that tax implications on Split Dollar or any other type business insurance program must always be taken into consideration during the design of the program to ensure its long term effectiveness. For additional information on establishing this program for you business or company, please contact Health Risk Services Inc.

DISCLAIMER: Please be advised that the information on this web site is intended to present a broad variety of general information as simply and accurately for your knowledge as we possibly can.  In no event does this information form part of or apply as a legal document.  Therefore, please note that rules, conditions and industry practices discussed may be changed over time.  Please consult Health Risk Services Inc. with specific questions.

E & O Insurance applies

It is absolutely imperative that effective planning must take place for any business to survive the owner’s or another key executive’s death. Unfortunately, it can be extremely difficult to obtain adequate debt financing for a business since creditors will often require the business owner to personally guarantee a loan.

The death of the business owner or key executive may cause creditors to demand immediate repayment of outstanding business debts. The significant burden that this situation places on the business can force the liquidation of key business assets at “fire sale prices” at a time when business results may already be severely impacted by the death. To make matters worse, if the business owner has personally guaranteed the debts incurred by the business, the owner or the owner’s estate may be liable for any outstanding debts that the business is unable to pay! Similar situations of debt can occur if the owner or key executive are affected by either a disability or a critical illness.

SOLUTION: The business purchases Insurance policies on the life of the business owner or key executives.  Proceeds from the policies are tax-free to the company and may be used to pay down the existing debts. Life insurance, disability insurance and critical illness insurance policies all play a necessary part in protecting the company’ s interests and minimizing financial risks. The creditors interests are protected removing any personal liability from heirs and allowing the business to continue deft free!

Health Risk Services Inc. will almost always recommend programs for this type of protection that will be extremely “cost effective” by providing pure insurance for the necessary terms of the loans. Term periods most frequently purchased for business loan protection are:

  1. Annual Renewable Term (rates are guaranteed for 1 year periods only)
  2. Term 10 (rates are guaranteed for 10 years and then increase to the next premium level for the following 10 years)
  3. Term 20 (rates are guaranteed for 20 years and then increase to the next premium level for the following 20 years)

Please note that generally, life insurance premiums paid for business loan protection are not deductible for tax purposes. However, if a life insurance policy has been requested by a restricted financial institution who is requiring the policy to be collaterally assigned to them, a portion of the premiums may be deducted.    

Health Risk Services Inc. always recommends that your accountant play a role in the establishment of appropriate Insurance programs in order to determine the proper tax implications for your business or company.

DISCLAIMER: Please be advised that the information on this web site is intended to present a broad variety of general information as simply and accurately for your knowledge as we possibly can.  In no event does this information form part of or apply as a legal document.  Therefore, please note that rules, conditions and industry practices discussed may be changed over time.  Please consult Health Risk Services Inc. with specific questions.

E & O Insurance applies

Using a life insurance policy can be a very effective way to fund the business tax liability that arises at death! At death, any individual who owns shares in a corporation, a partnership interest, or business assets (such as in the case of a sole proprietorship) will be deemed by CRA to have disposed of these properties.  As a result, a tax liability may arise in the form of capital gains and recaptured capital cost allowance.  If funds or other assets are not available to pay the tax liability the following two situations may arise:

  1. The shares or partnership interest may have to be sold.
  2. Business assets may have to be liquidated, possibly for a price below the fair market value.

Life insurance can provide the necessary funds needed to pay both the:

  • Tax liability that results from the capital gains.
  • Recaptured depreciation triggered by death.

Life Insurance is a particularly valuable funding vehicle if the beneficiaries want to retain the property or if the market conditions will not provide the estate with an amount equal to the fair market value of the property.  The individual could own the life insurance policy or it could be owned by the corporation or partnership and dispersed to the individual’s estate after death. For additional information on this concept and the type of life insurance policy that would suit your particular situation, please contact Health Risk Services Inc.

DISCLAIMER: Please be advised that the information on this web site is intended to present a broad variety of general information as simply and accurately for your knowledge as we possibly can.  In no event does this information form part of or apply as a legal document.  Therefore, please note that rules, conditions and industry practices discussed may be changed over time.  Please consult Health Risk Services Inc. with specific questions.

E & O Insurance applies

If you are an established business owner or an entrepreneur just starting out, it is important for you to be aware of the need to develop a creditor protection strategy. Most business owners, officers and directors don’t realize that their personal assets are at risk for creditor claims in the event that something goes wrong with their business.
In fact, a study has confirmed that three-out-of-four Canadian small business owners have not taken the adequate steps to protect their personal assets!

The types of liability that business owners, officers and directors can be personally liable for are:

  • Any debts for which the business owner, officer or director has given a personal guarantee
  • Any statutory debts such as wages and vacation pay
  • Any source deductions owed to the Canada Revenue Agency
  • Goods and Services Tax and or Provincial Sales Tax
  • Health and safety violations
  • Environmental damage

One of the easiest ways to protect personal assets: Investments with insurance benefits!!

Because certain investment products issued by insurance companies are regulated under the Insurance Act, they have the potential to protect personal assets from creditors in case of personal or professional liability, or a business failure.  CREDITOR PROTECTION IS ONE OF THE MOST VALUABLE BENEFITS of investing through a life insurance company, and in 1996, the Supreme Court of Canada upheld the creditor protection afforded to insurance investments under provincial legislation.

You can gain the comfort in knowing that as long as your investments are made in good faith, and a proper beneficiary is named, you can protect your hard-earned personal savings from professional liability.  In fact, insurance-based investments provide an inexpensive means for you to protect your family’s wealth and provide potential growth from the underlying investment.

For additional information on strategies for protecting personal assets from creditors or tips that can help you manage your risk, please contact Health Risk Services.  We will also be happy to educate you to the most appropriate creditor protection insurance vehicles available for your particular situation!

Let Health Risk Services assist you in making KEY PERSON insurance part of your business plan!!

DISCLAIMER: Please be advised that the information on this web site is intended to present a broad variety of general information as simply and accurately for your knowledge as we possibly can.  In no event does this information form part of or apply as a legal document.  Therefore, please note that rules, conditions and industry practices discussed may be changed over time.  Please consult Health Risk Services Inc. with specific questions.

E & O Insurance applies

Business owners and other key executives spend considerable time and effort to acquire the knowledge, experience, judgment, reputation, relationships and skills that make them a valuable asset to the business! If one of these key people dies, becomes disabled or critically ill, the business loses a key member of the management team and this can have a severe financial impact!

During the disruption that follows the death, disability or critical illness of a key player several things can happen as follows:

  • The business will suffer from the loss of knowledge, expertise and management capability.
  • Lenders may cut back credit.
  • Creditors may press for immediate payment.
  • Debtors may delay making payments.
  • Employees and customer may lose confidence in the business.
  • Competitors may take advantage of the situation.

Unfortunately, finding an immediate replacement for such a valuable resource that maintains the same qualifications of the key person being replaced can be extremely difficult. It usually is very costly in terms of actually finding and training that someone new, as well as meeting their income requirements.

During the time necessary to search for a replacement, the business will experience delays, disruption and reduced efficiency which could result in weakening the financial stability of the business. The impact of such a situation can be considerably reduced if the business has succeeded in establishing a proper plan prior to this event of loss.

This key person business plan should include the purchase of Insurance policies whether life insurance, disability insurance or critical illness insurance to ensure that there will be immediate cash to cover the business’s working capital needs and to find and train a suitable replacement for the person lost. The value of these benefits to the business should far exceed the cost of the insurance!!

Let Health Risk Services assist you in making KEY PERSON insurance part of your business plan!

DISCLAIMER: Please be advised that the information on this web site is intended to present a broad variety of general information as simply and accurately for your knowledge as we possibly can.  In no event does this information form part of or apply as a legal document.  Therefore, please note that rules, conditions and industry practices discussed may be changed over time.  Please consult Health Risk Services Inc. with specific questions.

E & O Insurance applies

Is your business prepared for the death, disability or critical illness of one of its owners?

If your business loses an owner to any one of these 3 situations, the remaining owners must decide how the business will continue.  Generally, you have four options:

  1. You can close down the business, but you likely wouldn’t want to do that after all of the time, energy, commitment and money you have put into it.
  2. You can continue the business with the new owner, but do you want to be in business with this person?  (for example, could be the spouse of a deceased owner).
  3. You can sell your shares, but who will buy them and at what price?
  4. You could purchase the shares from the affected owner or the deceased owner’s estate or the disabled partner’s spouse.

A key component of an integrated financial plan for the succession of a business would include a formal buy-sell agreement.  These agreements cover the terms of ownership and operation of the business.  It usually deals with the death, disability, critical illness and retirement of one of the owners, as well as disagreements about running the business that results in an owner wanting out.

This type of agreement often includes a formula or process for valuing the business to simplify the buy-out of an owner and will generally deal with:

  • Who will buy the shares
  • What the terms of the sale will be
  • When the sale will take place
  • Where the money to buy the shares will come from
  • What the purchase price will be

Proper funding must be in place to ensure that your agreement is viable. After all, without funding in place, agreements can fall apart because the remaining owners, obligated under the terms of the agreement to purchase the departing owner’s shares, may not be in a financial position to do so.

The options available for funding would be:

  • You can start saving today
  • You can borrow the funds from a bank
  • You can take funds from current earnings
  • You can sell assets

You can purchase life insurance, disability insurance and critical illness insurance to provide the funds needed!!

Since there are numerous possible ways to structure a buy-sell agreement, it is important to remember that each method has its own pros and cons and must be considered in the light of the circumstance of each given situation.  Another consideration is whether to fund the agreement with “corporate owned” or “personally owned” insurance.

Remember that there are several advantages to having your buy-sell agreement funded with insurance policies:

  1. Heirs obtain a definitive value for the deceased, disabled or sick partner’s interest.
  2. Surviving partners obtain total and unrestricted ownership of the business.
  3. Depending upon how the Insurance contracts have been structured, insurance proceeds can flow into the business tax free!
  4. Depending upon the nature of the applicable insurance contract (life, disability or critical illness) the proceeds can be realized within a very short and crucial time period.
  5.  Depending upon the type of insurance policy purchased, the longer the policy is in force, the greater the cash surrender value, which can be used to take advantage of other business opportunities.

Health Risk Services is prepared to work with your company to educate you and assist you in either the process of ascertaining the appropriate buy-sell agreement, or if in fact you already have one in place, to identify if the appropriate methods of funding have been addressed. Because there are many important issues to consider in establishing the buy-sell agreement and the funding that is right for you company, Health Risk would recommend that we work along with your other professionals such as accountants and lawyers to make sure that every detail is covered.

DISCLAIMER: Please be advised that the information on this web site is intended to present a broad variety of general information as simply and accurately for your knowledge as we possibly can.  In no event does this information form part of or apply as a legal document.  Therefore, please note that rules, conditions and industry practices discussed may be changed over time.  Please consult Health Risk Services Inc. with specific questions.

E & O Insurance applies

Health Risk Services Inc. has a number of quality group insurance programs each designed to meet a specific requirement in terms of expenditure and coverage in direct relation to the size of your business and the number of employees you have. Find effective insurance coverage at reasonable and competitive market rates. HRS Inc. can design a plan to minimize monthly contributions and provide far-reaching coverage in the following areas:

Health Risk Services Inc. has a number of quality personal insurance programs each designed to meet a specific requirement in terms of expenditure and coverage. Flexible, cost-effective and user specific products that not only provide support and assurance but also guarantee that they continue to serve your needs when and if your circumstances contributing to your insurance requirements change. Choose the product that is best for you:

What Is Travel Insurance?

Travel Insurance is intended to cover sudden, unexpected and unforeseeable circumstances which create a need for emergency treatments such as hospitalization, emergency surgery or dental work, transportation, and recovery or return of personal possessions. Basically, Travel Insurance will provide coverage for health care services in another province or country that your local or provincial plan will not cover. When purchasing a Travel Insurance Plan, ensure you are purchasing the right product with the best coverage by using an HRS Inc. Travel Insurance Checklist to guide you in your decision-making process.

Who Should Purchase Travel Insurance?

Government health insurance plans will pay only a small fraction of expenses if you are sick or injured while outside Canada. Some hospitals charge thousands of dollars a day, not including doctors, Efees or diagnostic services. Without emergency hospital and medical insurance, you and your family would be responsible for these high costs.

Travel Insurance: Key Features & Options

Circumstance/Occurrence Definition Coverage
Hospitalization Emergency hospitalization (semi-private) and emergency medical services in excess of provincial or territorial plan Up to $5 million
Meals & Accommodation While you are in hospital, insured family members or traveling companions remaining with you will be reimbursed for reasonable living expenses Up to $3,000
Transportation of Family or Friend Round trip economy transportation to bring family or friend to bedside

Travel Costs and/or identification of remains in cases of death

Up to $3,000

Up to $1,000

Return Transportation One-way economy transportation to return insured travelling companions and one insured accompanying family member home* Extra costs incurred
Attendant Attendant (not a relative) and return economy transportation to travel with your children home when you have been air evacuated back to Canada* Extra costs incurred
Return of vehicle or watercraft vehicle or watercraft used on journey which cannot be returned due to illness or injury that is covered by your plan Up to $3,000
Pet Return (Dog or Cat) Return of accompanying dog or cat to Canada if you return to Canada under the Emergency Transportation benefit or are hospitalized due to a sickness or injury covered by your plan Up to $300
Return of Deceased In the event of death, cost to return your body to Canada

In the event of death, cost for cremation or burial at place of death

Up to $10,000

Up to $4,000

Accidental Dental Emergency repair or replacement of whole or sound natural teeth caused by an accidental blow to the face Up to $3,000
Dental Emergencies Immediate relief of acute dental pain from causes other than an accidental blow to the face Up to $500
Emergency Transportation Arrangements for emergency transportation to a hospital in Canada or to the nearest hospital** Extra costs incurred
Return to Original Trip Destination One-way economy transportation for you and travelling companion to return to original trip destination after your emergency is completely resolved if your return home was under the Emergency Transportation benefit Up to $5,000

* Travelling companions are under the age of 18, or physically or mentally handicapped and reliant on you for assistance
** Patient must be medically assessed as transportable

What is Not Covered Under Travel Insurance

Travel insurance does not cover everything. This insurance has exclusions, conditions and limitations. Certain circumstances and conditions may affect the manner in which insurance coverage can be applied to a medical situation.

Available only to the spouse and dependent children of an employee or insurance policy holder, dependent life plans provide coverage in flat amounts only. Coverage for the spouse is generally higher than that available for children. Coverage for children generally becomes effective 14 days after birth and continues until the child is 21 years of age (25 years if in full-time attendance at school or university).

Your children and your spouse’s children (other than foster children) are eligible dependents if they are not married or in any other formal union recognized by law, and are under age 21. If your child is a full-time student attending an educational institution recognized under the Income Tax Act (Canada), they are considered an eligible dependent until the age of 25 (age of 26 for employees residing in Quebec) as long as the child is entirely dependent on you for financial support.

Employers may share in paying the premium, or opt to have employees pay the entire premium. The benefit is payable to the covered plan member upon the death of the dependent.

Benefit Amount
The most common amounts of dependent life coverage are $5,000 for a spouse and $2,500 per dependent child or $10,000 for a spouse and $5,000 per dependent child. However, coverage for higher amounts is often available.

According to Statistics Canada, life expectancy at birth is age 83 for women and 78 for men. Almost inevitably, age brings with it a higher risk of limitations than can hamper your ability to live independently. As we age, our ability to perform daily activities both physically and mentally may become more difficult to achieve as an individual. In Canada, 1 of 3 seniors aged 65 – 74 will become dependent on others to assist for daily activities and 4 of 5 seniors 85 years or older will require assistance. If one day you needed help performing everyday tasks, who would you get this help from? In 90% of cases, caregivers are family members, either a spouse or the children.

Definition

Loss of independence means the insured needs:

  • Help performing 2 of the 6 activities of daily living: bathing, dressing, eating, using the toilet, getting in and out of bed and chairs, or be incontinent OR
  • Ongoing supervision to ensure his or her security because of a cognitive impairment of organic origin (i.e., Alzheimer’s disease, senile dementia)

Why take out loss of independence insurance?

In the event you become unable to care for yourself, you receive a non-taxable monthly benefit, allowing you to keep your financial and estate plans on track. You can use the amount received as you wish, notably to:

  • Protect your wealth and children’s future inheritance
  • Hire home care personnel
  • Make required home adaptations
  • Get services not offered in public or private health care facilities

Long-term care insurance (LTC or LTCI), helps provide for the cost of long-term care beyond a predetermined period. Long-term care insurance covers care generally not covered by regular health insurance plans. 

Individuals who require long-term care are generally not sick in the traditional sense, but instead, are unable to perform basic daily activities such as dressing, bathing, eating, toileting, continence, transferring (getting in and out of a bed or chair), and walking. Age is not a determining factor in needing long-term care. About 60 percent of individuals over age 65 will require at least some type of long-term care services during their lifetime. About 40% of those receiving long-term care today are between 18 and 64. Once a change of health occurs long-term care insurance may not be available.

Benefits

Long-term care insurance generally covers home care, assisted living, adult daycare, respite care, hospice care, nursing home and  Alzheimer facilities. If home care coverage is purchased, long-term care insurance can pay for home care, often from the first day it is needed. It will pay for a visiting or live-in caregiver, companion, housekeeper, therapist or private duty nurse up to 7 days a week, 24 hours a day (up to the policy benefit maximum).

Other benefits of long-term care insurance:

  • Long-term care insurance could help cover personal, out-of-pocket expenses and deter from individuals having to rely on their children or family members for financial support. Without long-term care insurance, the cost of providing these services may quickly deplete the savings of the individual and/or their family.
  • Premiums paid on a long-term care insurance product may be eligible for an income tax deduction. The amount of the deduction depends on the age of the covered person. Benefits paid from a long-term care contract are generally excluded from income.
  • Business deductions of premiums are determined by the type of business. Generally corporations paying premiums for an employee are 100% deductible if not included in employee’s taxable income.

 

Types of Policies

Private long-term care (LTC) insurance is growing in popularity. Although premiums have remained relatively stable in recent years, coverage costs can be expensive, especially when consumers wait until retirement age to purchase LTC coverage.

  • Tax qualified (TQ) policies are the most common policies offered. A TQ policy requires that a person 1) be expected to require care for at least 90 days, and be unable to perform 2 or more daily activities (eating, dressing, bathing, transferring, toileting, continence) without substantial assistance (hands on or standby); or 2) for at least 90 days, need substantial assistance due to a severe cognitive impairment. In either case a doctor must provide a plan of care. Benefits from a TQ policy are non-taxable.
  • Non-tax qualified (NTQ) often includes a “trigger” called a “medical necessity” trigger. This means that the patient’s own doctor, or that doctor in conjunction with someone from the insurance company, can state that the patient needs care for any medical reason and the policy will pay. NTQ policies include walking as an activity of daily living and usually only require the inability to perform 1 or more activity of daily living.

Creditor insurance is usually available as part of a group insurance policy, rather than an individual policy. Group polices are generally less expensive than the individual type. The lender is the owner and beneficiary of the group policy. The borrower is known as the insured.

For example, a bank wants to insure all its mortgage customers. The bank applies for a group creditor insurance policy. The insurance company weighs the risks of the entire group with the price of the policy. Each customer pays a fee, called a premium, to be covered under the policy. As a result, the bank customers pay a lower fee than if they each bought an individual insurance policy.

Decreasing term life insurance may be used to cover a mortgage loan. As the customer pays the mortgage each month, the outstanding balance – the amount that is insured – is lowered. The amount of the death benefit will be lowered to match the remaining loan balance. As a result, the premiums can also be lowered each month.

Creditor insurance can also be used to insure credit card balances. These policies are sometimes called credit card protection programs. The customer can choose to purchase life or disability insurance, or both. The cost of the policy varies each month, based on the credit card balance. When the customer has a zero credit card balance, there is no premium due that month.

Banks may also use creditor life insurance policies for business loans. If a bank loans money to a business owner, the bank may require a life or disability insurance policy for the owner. Such policies help ensure that the loan will be repaid. This coverage is especially important if the owner’s work creates the main source of revenue for his company.

What Is Critical Illness Insurance?

A critical illness is something that no one would choose or wish to experience, yet it affects many of us when we least expect it. If you have a mortgage, you work full time or you have dependents, choosing to purchase a Critical Illness Insurance Plan will protect you from having to make a choice or a compromise in these important areas of your life.

Who Should Purchase Critical Illness Insurance?

If you are between the ages of 18 and 65, a Critical Illness Insurance Plan could be of great value to you. Family finances, future plans for education, career and life experiences can all be possible even in the event of a critical illness that affects the main source of household income. Critical Illness Insurance plans can also complement existing income protection plans and existing group or association disability plans.

Critical Illness Insurance: Key Features & Options

Each insurance provider will be able to offer a number of key features and options for each Critical Illness Plan. Each plan owner can determine which features, options and “riders” will be best suited for their needs and have them “built in” as the plan is designed.

Disability insurance insures the beneficiary’s earned income against the risk that disability will make working (and therefore earning) impossible. It includes paid sick leave, short-term disability benefits, and long-term disability benefits. Disability insurance can provide you with financial security by replacing a portion of your earnings when an accident or illness causes you to become disabled and unable to work for a fixed period of time. Accidents and illnesses are a fact of life and could happen to anyone at any time. Did you know that:

  • 1 in 3 people, on average, will be disabled for 90 days or longer at least once before age 65.
  • The average length of a disability that lasts over 90 days is 2.9 years.

Both personal and business disability insurance solutions are available that offer flexibility and features to help bridge the gap between income and expenses during a disability. Policies can be designed to include components that insure short-term disability claims and move into longer term coverage in the event that a disability leave is extended.

Employer-Supplied Disability Insurance
Since one of the top reasons for becoming disabled is getting hurt on the job, it is not surprising that the second-most important form of disability insurance is that provided by employers to cover their employees. There are several subtypes that may or may not be separate parts of the benefits package: workers’ compensation and more general (but very basic) disability insurance policies.

Individual Disability Insurance Policies
Those whose employers do not provide benefits, and self-employed individuals who desire disability coverage, may purchase their own policies on the open market. Premiums and available benefits for individual coverage vary considerably between different companies, for individuals in different occupations. In general, premiums are higher for policies that provided more monthly benefit, pay the benefit for a longer period of time, and start payments for benefits more quickly following a disability. Premiums also tend to be higher for policies that define disability in broader terms, meaning the policy would pay benefits in a wider variety of circumstances.

Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price. Mortgage loan insurance helps protects lenders against mortgage default, and enables consumers to purchase homes with a minimum down payment of 5% — with interest rates comparable to those with a 20% down payment.

To obtain mortgage loan insurance, lenders pay an insurance premium. Typically, your lender will pass this cost on to you. The premium payable is based on a percentage of the home’s purchase price that is financed by a mortgage. The premium can be paid in a single lump sum or it can be added to your mortgage and included in your monthly payments.

Mortgage loan insurance is not to be confused with mortgage life insurance which guarantees that your remaining mortgage at the time of your death will not be a burden to your estate.

Proper financial planning may include a solid Life Insurance policy that could protect your family and loved ones from the difficulties of maintaining a stable and secure lifestyle in the event of a premature or unexpected passing. Life insurance can help create financial security for you and your family as it can be used to:

  • Pay final expenses and any debts
  • Provide an income for your family
  • Ensure your family has the resources to maintain a comfortable standard of living
  • Leave your desired contribution to a favourite charity

While you’re still living, some life insurance policies can:

  • Build tax-advantaged savings you can draw upon as needed for personal or business opportunities
  • Supplement your retirement income or provide for long-term care or home care for yourself or a family member

The following is a brief explanation of the various types of Life Insurance Policies available:

Term Life Insurance is Life Insurance which provides coverage at a fixed rate of payments for a limited period of time. Term Insurance is the least expensive way to purchase a substantial death benefit on a coverage amount per premium dollar basis over a specific period of time.

Available Terms of Coverage for Term Life Insurance are:

  • Annual Renewable – Premium increases every year
  • 5 Year Term – Premium increase every 5 years
  • 10 Year Term – Premium increases every 10 years
  • 20 Year Term – Premium increases every 20 years

Term Life Insurance policies do an excellent job of meeting immediate and fixed time period needs such as loans, mortgages or family protection. Premiums are guaranteed for the duration of the coverage, even the subsequent renewal years. Your policy automatically renews at the end of the “term” without your providing proof of health to the Insurance Company. However, the increase in premium or price can become substantial in later years, causing many people to terminate policies in their retirement years even though they may still have a need for insurance coverage. Also, it is important to remember that the majority of term policies will terminate coverage at age 75 or 80.

Term insurance is well-suited to meeting large, short-term protection needs for the lowest initial cost. For example, if you have purchased a home using a mortgage amortized over 25 years. A Term 20 Life Insurance Policy will cover the initial 20 years of your mortgage for the least amount of cost. Or perhaps you have purchased a new car that requires life insurance coverage, a 5 year or 10 year Term would be the answer for you!

Term Life Insurance provides you the option to later change or convert your current policy to a Permanent Life Insurance policy with the same Insurer without providing proof of health. Two important points to remember regarding conversion of a policy is:

  • The insurance company usually offers a select number of Life Insurance contracts that you can convert to
  • The Conversion privilege usually expires around age 65 or 70.

There is absolutely no doubt that many consumers will purchase Term Life Insurance on “PRICE” alone!

However, just like any other product that you may purchase, there are many other considerations that you should be aware of when making your decision to buy.

What to look for in an Insurance Company?

  • Does the company consistently receive excellent ratings from several internationally-known rating agencies?
  • Does the company have the capital to grow and to compete in an increasingly competitive environment?
  • Does the company treat its existing clients fairly?

What to look for in a Term Life Insurance product?

  • Is the product convertible? For how long?
  • Does the product offer no medical underwriting for most policies?
  • What permanent products are available to convert to?
  • How long is the product renewable?
  • Are the renewal rates guaranteed? Are they competitive?
  • Does the product offer lower rates for healthier clients? How difficult is it to qualify for a company’s preferred rates?
  • Are preferred rates offered when converting to a permanent plan?
  • Does the product offer a range of coverage options all in the same plan?
  • Does the product offer the flexibility to change as client’s needs change?
  • Does the product offer a range of competitive riders to custom design solutions to meet your unique needs?