Individual Insurance Overview

Life Insurance

If you have financial obligations (a mortgage, bills, support for children, education payments, etc.) that would continue if you were gone, you most likely need life insurance.

From assessing ongoing cash flow needs, we can determine the amount of insurance required, the type of insurance needed, and for how long it will be needed. There are, of course, other reasons to purchase Life insurance including:

• to settle a large outstanding tax bill on an estate after death

• to donate a tax deductible amount to a charitable or religious institution

• to provide some income in retirement

There are two main types of Life insurance: Term and Permanent.

Term insurance could also be described as temporary insurance –it is purchased for specific lengths of time the most common being ten or twenty years. At the end of each term you can choose to renew if you need to and the insurance costs will change to reflect the new age of the insured and the increased risk. As insurance costs increase with age, the insured is faced with significant increases in their premiums with each renewal. The best time to get insurance is before you need it as the rates are very affordable when you are young and healthy. For example, a 35-year-old male non-smoker may pay about $43/month for $500,000 20-year term policy (smoker rate about $100/month). A 50-year-old male, non-smoker, may pay about $160/month for the same coverage.

Permanent insurance lasts for the rest of your life and has more flexibility in terms of cost and can offer an investment component. The cost is often fixed throughout the life of the insurance policy. For anyone considering life insurance for longer than 25 years (for estate planning purposes, for example), it is wise to give serious consideration to permanent insurance. Although more expensive than term insurance initially, over the long term, permanent insurance becomes very cost effective. For example, the 35-year-old male non-smoker would pay between $115-$190/month for a $250,000 life insurance policy that would never expire or increase in cost (but may increase in benefit).

An individual plan for life insurance may be more suitable than a lender-pay mortgage life and health insurance policy. For information about your specific situation, feel free to contact us.

Disability Insurance

Disability can strike anyone at any age - by sickness or accident. The studies are clear: the chance of being disabled and unable to work for more than three months before age 65 is between 1 in 4 (women) and 1 in 8 in men.  We hear people say all the time that they can't afford disability insurance - but 28-year old self-employed male who works construction for a living could break a leg surfing - and they would not be covered by WCB.  Many young people will earn between 2-3 million dollars between now and age 65. That's a large enough sum to merit spending one work day a month to insure.

For the self-employed: you are a risk-taker. Don’t let that extend to leaving yourself uninsured in case you are unable to work. You have invested education, training, time and money into building a business or practice that is liable to suffer the greatest loss if problems or a crisis occur. Many people take for granted the various safety nets that safeguard our health, welfare and incomes. These programs are not always available to the self-employed individual (such as EI).

What is a major loss? How would you protect yourself against one? You probably have a certain extent of protection already. You insure your home and possessions, your automobile, your business premises, and you may have interruption insurance and liability insurance. In fact, people insure all the things that can be replaced; but there is one thing we cannot replace, and according to insurance statistics, it's the event that is most likely to happen -- the loss of health.

This health and ability to conduct your business is your most important asset without which you cannot use your skills to generate income; and all that you have worked for can be lost.

Can you afford to take a six month holiday starting tomorrow? If so, you are one of the fortunate few who don't necessarily need protection. If not, you probably can’t afford a six month disability either, and that could start at any time. By assessing your ongoing cash needs, we can determine whether it would be possible to pay bills if you were unable to work for three months or longer.

There are many variations of disability plans, and even more variations in the degree of disability a person can suffer. It is important to discuss these differences thoroughly before applying for a disability policy. Many workers have LTD (long-term disability) plans through work. Depending on your situation, a top-up individual plan may be suitable.

Talk to us about individual plans for life, disability and health insurance.

Critical Illness Insurance

An ad for Critical Illness Insurance asks the question, "What if you had a heart attack and survived?" Good question, considering you may be physically able to go back to work - with the same hours that caused the heart attack in the first place. What if you wanted a lifestyle change? Could you afford it?

What if you needed extended treatment? Could your spouse afford to take time off work? Could you pay for non-insured medical treatment outside Canada (due to waitlists in Canada)?

Illness brings its own set of financial problems and those who are ill certainly do not need the additional stress of reduced income and increased expenses. Compounding this may be delays in certain types of tests or treatment, and the frustration of knowing that across the border in Seattle, the test or treatment could be done without delay.

This is where Critical Illness Insurance can literally be a lifesaver: paying a lump sum payment of up to $2,000,000 after diagnosis is confirmed. It is up to you how you use the money. Many people insure their mortgages or their spouse's income (if you were sick and able to receive disability benefits, the Critical Illness benefit could pay for your spouse to take time off work to support you during recovery). There is no right or wrong amount of coverage - it is meant to be used for whatever you deem necessary at the time. Of course, this makes determining a coverage amount difficult but the premium cost will also dictate how much you can afford. It is generally wise to get as much coverage as you can 1) afford and 2) feel would be the minimum needed in the event of a critical illness.

This type of insurance was introduced to Canada in the early 1990s and has grown in popularity since. It is important when applying for one of these policies that there is a complete understanding of the circumstances under which the policy pays out and when.