Archive for the ‘Group Benefits’ Category

Heard of a Private Health Services Plan or PHSP?

A tax efficient health spending account for small business owners

Private health services plans (PHSPs) can be a flexible and cost effective way for a small business to offer tax-free health and dental coverage to employees. Even single-person businesses can benefit.

I came across this excellent article from CBC News called Are You PHSP -ing? This is an excellent article that really explains the benefits of having a a PHSP for small business owners for themselves and their family and even as a replacement to traditional group benefits plans available for smaller companies.

If you own a small business, are incorporated, and have never heard of a PHSP, a Cost Plus plan, a Health Spending Account, or any of the other names for this tax efficient plan, then please take a few minutes and read this article.

Are you PHSP-ing?

Small business embraces the ‘other’ benefit plan

Fiona Law looked at a raft of traditional group insurance plans while looking to provide health and dental benefits for her staff at Calgary-based CompuTouch.

 

Her business, which uses technology to support interactive meetings and conferences, has just three full-time employees. So she wanted something that was easy to set up and understand, a plan that would cover a wide range of medical expenses and offered the firm certainty of costs.

 

What she ended up choosing was not an insurance plan at all, but a private health services plan (PHSP).

 

“This was an alternative way of providing a benefit that was very straightforward and very transparent,” she says. “It’s a good compromise with a minimum of hassle.”

 

PHSPs — sometimes called health spending accounts — have been around for more than 20 years and have grown to become popular benefit programs at thousands of small businesses in Canada.

 

But there are still many entrepreneurs — including sole proprietors — who mistakenly think group insurance is their only option to pay the medical bills that medicare doesn’t cover.

What is a PHSP?

Private health services plans are a type of health and welfare trust governed by the Income Tax Act.

 

At their heart, they provide a way for a business to pay for all the medical expenses of employees and their families — and that includes the business owner — on a tax-free basis.

 

In the case of an unincorporated sole proprietor, a PHSP can let the entrepreneur have his or her out-of-pocket medical costs paid for by the business, with significant tax savings over paying for them with after-tax dollars.

 

With PHSPs, business owners can deduct all their eligible medical and dental expenses from their gross business income, instead of making them a personal expense.

 

“A PHSP … transfers an out-of-pocket expense to a business deduction,” says Rachel von Sturmer, who offers independent insurance advice to small businesses through her Vancouver-based firm, True Benefits Inc.

 

“[PHSPs are] a great option,” she says. “I have one for myself.”

How do PHSPs work?

PHSPs can be set up through third-party providers — there are more than a dozen in Canada — that specialize in administering these plans. It’s also possible to set up a self-administered PHSP.

General PHSP rules
Unused account balances can be carried forward for one year.
Plans for incorporated businesses must be offered to all employees. Those not wanting to participate can opt out.
Corporations can vary benefit levels by job classification, but all employees at the same level must receive the same benefit.
Maximum annual benefit can be changed at any time.

Let’s assume a small business owner has agreed to fund a PHSP for his five employees for up to $1,000 a year for each worker.

 

An employee or a family member visits a health practitioner and pays for an out-of-pocket medical expense (like prescription drugs, eyeglasses, or physiotherapy).

 

We’ll assume they submit their receipts to a third-party PHSP administrator.

 

The administrator ensures the claim is legitimate and that the expense falls within the limit funded by the business. Once it’s approved, the administrator sends a cheque to the claimant for the entire amount (up to $1,000 per employee per year, in this case).

 

The claimant gets all their medical expenses covered on a tax-free basis. And the business gets a 100 per cent tax deduction.

What does it cost?

Third-party administrators make their money by charging the business initial setup fees, as well as transaction fees that range from five to 15 per cent — 10 per cent is typical.

 

The tax savings
Several PHSP providers have calculators to figure out how much a PHSP can save an entrpreneur versus having no health plan at all. You can try one calculator here. (Note: the calculations will vary slightly from one administrator to another because of differing fee structures).

So a $1,000 claim would cost the company $1,000, plus the administration fee of perhaps $100, plus GST/HST on the fee, making a total of about $1,113 on average.

 

That amount can in turn be entirely deducted by the business.

 

Depending on the nature of the business and the income bracket of the entrepreneur, the tax savings could be as high as 39 per cent of the total amount paid.

Who and what is eligible?

Just about any medical expense that qualifies for the medical expense tax credit can be paid for through a PHSP.

 

Unincorporated businesses, like a partnership or sole proprietorship, qualify, as do incorporated businesses and self-employed professionals. There’s no formal limitation on the number of employees, although some administrators may have their own policies.

 

There are also some rules that the Canada Revenue Agency has established. In the case of sole proprietorships, for example, annual PHSP funding is limited to $1,500 for the owner, $1,500 for a spouse and $750 for each dependent child (there’s no set funding limit for corporations, but the CRA does look for reasonable benefit amounts). One PHSP provider we found won’t allow limits above $15,000.

 

PHSPs for unincorporated business also have to have an insurance element in place, so some companies add travel medical coverage.

What are the benefits of a PHSP?

Many employees like the flexibility of PHSPs. For instance, an employee with a PHSP that his small business has funded to the tune of $2,000 can decide himself how that money will be spent — dental bills for himself and registered massage therapy for his wife, or prescription drugs for his son and eyeglasses for his daughter.

 

Medical costs are entirely paid for up to the funding limit. There are also none of the deductibles, co-payments or annual limits on particular kinds of services that some group health plans have.

 

For employers, PHSPs provide cost certainty — they know upfront how much their benefit costs will be. With some of the big providers of group insurance, some very small businesses may find that their premiums will jump if one employee has a lot of health problems because the claims aren’t all pooled. Fortunately, there are some group health plans, like the Chambers of Commerce Group Insurance Plan, that pool claims and are available even to single-person businesses.

 

With group plans, there’s always someone who doesn’t like what’s covered and what isn’t, or doesn’t like the limits that may have been imposed. Some employees will want better drug coverage, while others might want better coverage for orthodontic work. Only big employers are usually able to offer the type of group plan that allows workers to pick and choose coverage — the so-called cafeteria plans. But with PHSPs, each employee is able to choose how to spend their plan dollars.

 

People with pre-existing health conditions may find it difficult to qualify for some group insurance plans. With PHSPs, that’s not an issue — all pre-existing conditions are covered because it’s not insurance, so there are also no monthly premiums for employee or employer. In fact, if an employee doesn’t have medical expenses, the employer isn’t out of pocket anything.

 

“It’s use it or lose it,” points out Keith Peden, marketing manager for Brock Health, a PHSP administrator in Calgary.

 

Most of Peden’s customers are the smallest among small business entrepreneurs — the self-employed, the sole proprietor, the family business — a group that he says most of the big group health providers typically don’t focus on.

 

His small business clients like the flexibility PHSPs offer. “Once they figure it all out, they love [them],” he says.

Are there any drawbacks?

PHSP’s are designed to deal with more of the regular, routine type of medical expense like teeth cleaning, prescription drugs and new eyeglasses — not a catastrophic medical issue. For major (ie., expensive) health events, group plans will tend to offer more coverage. That’s the insurance aspect — with group plans, you can end up getting back a lot more than you paid in.

 

So if people only have PHSPs in place and are worried by the financial impact of a major illness or accident, the purchase of additional catastrophic medical insurance — which can include critical illness or long-term disability insurance — is a must.

 

There can also be an issue of privacy. A few PHSP administrators can run on a pay-as-you-go model, rather than on a pre-funded basis. With pay-as-you-go, people pay their health-care expenses and then submit receipts to their employer, who then forwards the receipts to the PHSP administrator. Many people don’t want their boss to know what their medical issues are. That’s why most businesses have set up pre-funded health spending accounts with the providers.

 

Of course, in the case of a sole proprietorship, privacy of medical bills isn’t an issue because the boss is also the claimant.

Which is better?

Some businesses offer both PHSPs and group insurance plans to their employees. The PHSP can be used to cover medical deductibles or the parts of a group health insurance claim that aren’t covered (some dental plans, for instance, only pay 80 per cent of the dental fee schedule and some services, like orthodontic work, may only be covered at 50 per cent).

 

So is a PHSP right for you?

 

“It depends on the number of employees and the kinds of benefits they want to provide,” says Vancouver insurance consultant Rachel von Sturmer.

 

“Do they want to be a little bit more traditional and provide a full spectrum health, dental and life insurance plan, or are they more interested in providing a set budgetable amount per year?” she asks. “Group plans definitely have their place,” and says she often recommends them, depending on the particular needs, and the budget, of the clients who consult her.

 

One group plan she often points clients to — the popular Chambers Plan (mentioned above) — is specifically designed for the small and medium-sized business. and is in place at more than 25,000 firms.

 

But for sole proprietors who’ve just started their own business, have no other health benefits, have taxable income but don’t have a lot to spend, she’s definitely in the PHSP camp.

 

“They’re fantastic.”

Life Guard Insurance can refer you to the best PHSP administrator

At Life Guard Insurance we have a partnership with CustomCare – Canada’s largest Private Health Services Plan (PHSP) administrator. Please contact us today to find out more about setting up a PHSP for your business.

The article reposted by +Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about a Private Health Services Plan or PHSP would also be very much appreciated.

Canadian Life Insurance Products Protected Through Assuris

Assuris protects your investment into life and health insurance

Did you know that when you buy a personal life or health insurance policy in Canada that the insurance company you bought it from is “insured” by Assuris in case it goes bankrupt. Assuris is a non-profit organization funded by the life insurance industry to protect Canadian policyholders. One of the greatest fears of policy holders and investors today is that the financial institution they are giving their money to, like an insurance company, will go bankrupt and leave them with nothing.

The Federal Government of Canada has put in place legislation to protect Canadians’ investment into life and health insurance products. Policy holders and investors would be left with nothing to show for their many years of paying premiums and investments and lose their life and health insurance policies if an insurance company went bankrupt. In 1990 Assuris was founded under the Insurance Companies Act of Canada and designated by the federal Minister of Finance.

The role of Assuris is to minimize the loss of benefits a Canadian policy holder might face if their life insurance company went bankrupt and to ensure a quick transfer of their policies to a solvent Canadian life insurance company, honouring the protected benefits of policyholder (as described below).

Assuris Member Companies

Every life insurance company in Canada authorized to sell life and health insurance policies is required by federal, provincial and territorial regulations to become a member of Assuris.

Assuris maintains a liquidity fund of at least $100 million to provide the cash need to help transition life and health insurance policies from an insolvent life insurance company to a solvent company. If a Canadian life insurance company was to fail, Assuris has the power to assess other Members and raise additional funds to cover the cost of providing Assuris protection to Canadian policyholders. In effect, Assuris has the power to raise money from all Canadian life insurance companies if one of the Member companies fails, and use that money to provide the guarantees it promises to all Canadian policyholders.

Assuris Protection for you Life & Health Insurance Policies

If you’re a Canadian citizen or resident and purchased a life insurance policy from a Canadian life insurance company (all of which are Member Companies of Assuris), you are protected by Assuris. Assuris guarantees that, upon transferring your policy to a solvent life insurance member company, the benefits will be maintained as described below. Click here to download the Assuris protection brochure for Canadian policyholders.

Assuris protection for Life Insurance

Death benefit guarantee (all life insurance policies): you will retain up to $200,000 or 85% of your promised Death Benefit, whichever is higher.

Cash value guarantee(Universal Life and Whole Life policies): you will retain up to $60,000 or 85% of the Cash Value of your policy, whichever is higher.

For Whole Life Insurance, upon transfer of your whole life policy to a solvent company, dividends on your policy will continue to be paid, however the level of expected dividends may be adjusted.

Assuris protection for Critical Illness Insurance

Critical illness cash payout guarantee: you will retain up to $60,000 or 85% of the promised critical illness benefit, whichever is higher.

Assuris protection for Disability Insurance

Disability income benefit guarantee: you will retain up to $2,000 per month or 85% of the promised Monthly Income benefit, whichever is higher.

Assuris protection for Long Term Care Insurance

Long term care income benefit guarantee: you will retain up to $2,000 per month or 85% of the promised Monthly Income benefit, whichever is higher.

Assuris protection for Annuities

Payout annuity income guarantee: you will retain up to $2,000 per month or 85% of the promised Monthly Income benefit, whichever is higher.

Assuris protection for Segregated Funds

Segregated fund protection of guaranteed amounts: you will retain up to $60,000 or 85% of the guaranteed amounts*, whichever is higher.

* The “guaranteed amounts” refer to the maturity guarantee of the segregated fund contract. If you had a 75% guarantee of principle invested, and you deposited $100,000, your guaranteed amount would be $75,000. Assuris would then protect up to $60,000 or 85% of the guaranteed amount. In this case Assuris would apply the 85% rule to the $75,000 of guaranteed cash value at maturity of the segregated fund, and you would have $63,750 guaranteed by Assuris.

Assuris will also apply the same level of guarantees to group insurance policies sponsored by a company for the benefit of its employees.

Life Guard Insurance sells insurance policies protected by Assuris

All the life and health insurance policies sold by Life Guard Insurance are protected by Assuris because all the life insurance companies we are contracted with are all Member Companies of Assuris. Feel secure that your investment into life and health insurance is guaranteed by Assuris.

To insure you are protected by Assuris please check your policy is underwriten by a member company of Aussris: visit their Member List.

The article was written by +Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about Assuris protection for your life insurance products would be very much appreciated.

7 Myths About Life Insurance That People Commonly Believe

Get the facts about these common misconceptions about life insurance

Very often in my career I have had to answer these common questions about life insurance. It seems like people have this preconceived idea of how life insurance works, or what they should buy. I would like to set the record straight for these top 7 questions I commonly hear from clients.

I believe the misinformation below is due to people seeking advice on the complicated topic of life and health insurance from friends and family. Unless you are a licensed and qualified insurance broker, it would be hard to answer these questions without making some mistake of fact. Please, when getting information about life insurance products and services, speak to a licensed professional for answers, not your best friend’s uncle.

1. Life insurance is expensive

Actually it doesn’t have to be. In fact life insurance, namely term life insurance, has never been cheaper in Canada than it is today. If you are healthy and can qualify for preferred rates (discounts awarded to people in exceptionally good health) you can lock-in even lower premiums for 10, 20 or even 30 years of coverage.

Other types of coverage, namely whole life insurance and universal life insurance, can be more expensive vs. term life. This is because you are not renting coverage for a certain number of years; you are actually buying the coverage and owning it. The difference is like renting an apartment or buying a house. The house costs more but has a lot more value to the owner(s). If you look closely, the rate of return on permanent life insurance can be one of the best, guaranteed, long-term growth products in Canada today.

2. My life insurance through work is enough

Employer sponsored group life insurance is nice to have, but it is not your policy. As an employee you can be included in the group and get what coverage amount the company is offering. Group insurance is relatively inexpensive but the costs for coverage increase quickly as you age. Also, if you ever leave that job or retire, your entire group insurance plan, including the life insurance, ends immediately upon your date of termination.

If is never recommended that people rely 100% on their group life insurance. The employer never intended their group benefits plan be the sole source of insurance planning for employees. It is not only wise, but a fundamental piece of your financial plan to own and control a large segment of your total life insurance need, in conjunction with your group life insurance plan.

3. You can only have one life insurance policy

I’m not sure where this idea came from. Maybe people think that only one life insurance company will pay out, or that if you own two life insurance policies that only the larger one will pay but not the smaller policy. This isn’t true! When applying for new life insurance you must list the other policies you currently own. Telling the new life insurance company what policies you have and how much you are currently insured for is part of the underwriting process. The new insurance company wants to make sure that you can afford the new premium and that you are not “over insured”. It is reasonable in the eyes of a life insurance company that a person can insure themselves for about 20 times their gross income. Anything above that would raise some concern. Why do you need so much coverage, and how are you going to afford the premiums? Does the application make sense?

4. You must buy either term or permanent life insurance, not both

Of course you can own both term and permanent life insurance. Policies have even been designed so that a term rider can be included inside a permanent life insurance policy. It is standard to design life insurance with a combination of both term (temporary) coverage and permanent lifetime protection. I often here this concern when doing a financial needs analysis for clients and coming out with a large amount of life insurance risk, like $1 million. If the clients are interested in permanent coverage they are afraid they could never afford to buy the whole $1 million of universal life or whole life insurance. This is a probably true, as it is very expensive to buy a large face amount of permanent life insurance. What a person can do is buy a smaller amount of coverage as permanent life insurance protection and top up the rest of their needs with term life insurance for the time they need it (like 20 years to raise children and pay down a mortgage).

5. Life insurance is only for families

While life insurance is very commonly used by families to protect loved ones, it is also beneficial for single people and business owners. A single person probably has some debts to pay off, and a small life insurance policy will make it easier for his/her estate to clean off debts and settle affairs if anything were to happen. Also, a life insurance policy purchased while you are young and single will lock in your insurability. This means once the life insurance company has offered you coverage they can never take it away. As young, single people age, they too often become husbands, wives, and parents and they now need the life insurance. What if they had become unhealthy in the mean time and could no longer qualify for life insurance. That would be bad news for the family. But if they had a life insurance policy in their “back pocket” they could just change the beneficiaries to their new family and coverage continues.

A business owner too needs life insurance to protect his business in the event he/she is gone. There might be partners or investors who require protection. There also might be debts owing the bank or a family that requires this business to continue to have an income, etc. For many reasons the business could benefit from owning a life insurance policy on the business owner, regardless of whether or not they are part of a family.

6. Retired people don’t need life insurance

Well, if all retirees were independently wealthy, maybe. If every Canadian had enough money in savings to live off for the rest of their life, having paid off all debts, and spending Canadian winters as snowbirds in Arizona, then yes, you probably don’t have a great need for life insurance. Unfortunately this is the minority of Canadian retirees. Most Canadians are finding it hard to retire without some additional income. They are still carrying debt which needs to be paid off, and many rely on government assistance programs. Even for those that have built up wealth, there is the final tax bill for the estate, which can be a huge cheque to be paid to the Canada Revenue Agency after your death.

If people were smart and had purchased permanent life insurance when they were younger they would have a policy moving forward with them into old age. If not, they will still have a sizable final expense bill that will need to be paid. Life insurance for retirees can be a final expense plan taking care of the funeral and legal fees, or it can protect a larger estate from the erosion of taxation. Whatever your situation in retirement years, life insurance is still a good financial planning tool.

7. All life insurance companies are the same

It would be like going into to an ice cream shop and all the choices are plain old vanilla. Life insurance companies are as different as the many flavours of ice cream. We know it is all ice cream, that hasn’t changed, but the various flavours appeal to many different tastes. The same is true of life insurance companies. Let me give you an example. If you are a cigar smoker there is one life insurance company that will give you standard “non-smoker” rates if you smoke only one cigar per week on average. Another company will issue $250,000 of coverage of less with only a verbal medical questionnaire (no nurse will visit). Some companies are more lenient on foreign travel than others, so if you go overseas to non-vacation destinations, like Mumbai, India, then we should look at company X vs. company Y. Working with a life insurance broker who knows the ins and outs of the different life insurance companies is very important if your needs vary at all from a plain old vanilla flavour.

Get personalize advice from a broker at Life Guard Insurance

At Life Guard Insurance we have a team of qualified life insurance brokers across Canada who can help you with your life insurance needs. Please feel free to contact us to find a local broker near you who can show you how life insurance would benefit your financial plan.

The article was written by +Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about life insurance myths would be very much appreciated.

Ask the Right Questions To Build Trust with Your Life Insurance Broker

When meeting with a new life insurance broker here are some key questions to keep them honest

If you are reading this article, then you are probably shopping for a life insurance broker you can trust. Well, how do you know you can trust just any life insurance broker you meet? Because you found them on the internet and they have a pretty website? Probably not good enough when you’re about to invest a great deal of money over a long period of time into a life and/or health insurance product with a person you met online.

So, I put myself in your shoes. If I was shopping for a professional, experienced and qualified life insurance broker, what questions would I have for him or her that would make me comfortable to put my money in their hands? I came up with these top 7 questions:

1. How long have you been in the life insurance business?

The answer to this question is interesting, and should be one of the first things you pay attention to. If the person is brand new to the life insurance business, i.e. in their first 1-2 years, then he or she should have support from an agency or senior advisor. Such a new advisor should never be out there alone trying to build a life insurance business.

However, if the life insurance broker has been in business for over 20 years, chances are that he or she is very comfortable with the present status-quo and not actively trying to add clients to their business. Taking on a new client could be a real inconvenience as they probably have more than enough income from trailers on the insurance and investments of their current client base.

What you really want is someone who is in the early to mid stage of their career, still full of energy, eager to work hard and grow their client base, and wants to see new customers and build relationships. A life insurance broker like this has enough experience to service most common family needs and knows where to get help when the complexity of the case is beyond them.

2. What did you do before becoming a life insurance broker?

It’s funny how life insurance brokers come from all walks of life. I have met ex-grocery store clerks to ex-boardroom executives all in this business. What someone did before becoming a life insurance broker is not the be-all and end-all reason to deal with them, but it helps round out their profile. I used to recruit people coming into the life insurance industry. Many of my fellow recruiters at Clarica (now Sun Life Financial Career Sales) would talk to anyone about becoming an advisor – the waitress, the gym trainer, car sales man, anyone. What they looked for was “personality”.

I always focused recruiting on university and college students, career changers like ex-military, and people who truly wanted an entrepreneurial opportunity. People who become life insurance brokers because they are generally a good salesperson and like the high income potential of the industry do not have a good enough reason to join. It isn’t the kind of broker I would want. Someone who believes in the product, wants to help others, be their own boss, learn and grow. These are the qualities I would seek when recruiting new life insurance brokers, because it is the type of broker I would want to have take care of me.

3. How did you get your initial training in the life insurance business?

Unfortunately, there are very few organizations left in Canada that provides basic core life insurance training for new advisors and brokers. It is one of the fundamental flaws of our business that must be addressed. In the mean time you should ask your broker how he or she got their basic training in the industry. There are a few “career shops” that provide excellent training; namely Sun Life, London Life, Desjardins, RBC Insurance Career Sales and even World Financial Group. Very often, and often very quickly, good advisors in these shops outgrow the single product line and managerial/corporate control and strike out on their own. This is where many of the best independent life insurance brokers come from.

4. What made you become a life insurance broker?

No one will answer you “for the money”, but for many that is the underlying reason. If you are a good salesperson and can sell many life and health insurance policies, you can make a lot of money. But if all you do is sell new business and never look after your existing clients, then things can fall apart rather fast. Here are some good reasons to become a life insurance broker:

• They believe in the product – usually through personal or close acquaintance experience with death, disability or critical illness
• They like to help people with financial planning – a numbers geek
• They want to be an independent business person
• They want to be in control of their career
• They don’t want to be part of a large corporation but would rather build personal relationships with clients

These are all good reasons to become a life insurance broker.

5. How many clients are you looking after?

Too many clients and you just become another number to your broker. Too few and you know they are struggling to make a living. A successful number that is usually celebrated in the life insurance industry is 100 new sales per year. This is a benchmark of a successful advisor. If your new life insurance broker is selling 70 – 100 new life and health insurance policies per year then they are doing very well. Selling over 200 policies and they probably don’t have time to sit down with existing clients each year. You should be looking for a successful and stable life insurance broker.

6. What is your ongoing service commitment to existing clients?

How is this life insurance broker going to look after you over time? Maybe you don’t want a full sit down meeting and review once every year, but looking over things every 2 – 3 years as life changes is very important. There are also new products being introduced onto the market, conversion options you can exercise, policy changes that might need to be done. Your life insurance broker should be available to help you with these things, and in fact should be initiating contact every so often.

Does the broker also have a way to stay in touch with their clients regularly, like an email newsletter or website that you can easily keep in touch with them. Do you get at least an annual phone call from the broker or his/her administrator once a year to check up on you? These are some basic customer service standards that should be expected in this day and age.

7. Do you love being a life insurance broker and why?

I think everyone has a unique answer to this question, but they should at least answer in the positive. If they can’t identify why they love what they do, then chances are they won’t be around in the business a few years from now. I’ll tell you why I love being in the business as an example of what you should expect.

“I love being a life insurance broker because it gives me a chance to protect people from those unforeseen disasters in life. I believe in risk. I’ve watched 4 family members deal with and be taken by cancer and Alzheimer’s. I’ve even lost a cousin to violence. Everything was a shock to our family. Sometimes there was adequate planning in place, and sometimes not. I want to make sure my clients are protected from the trials in life that I know are there. I’m ready to answer the tough questions and help my clients face some tough realities that most people find are taboo subjects for dinner conversation. If I’m not going to help my clients ask these hard questions, then I’m not doing my job. But I know when we have answers and a plan in place my clients are financially secure from whatever life may throw at them. That is why I love what I do.”

Life Guard Insurance can help you find a great life insurance broker

At Life Guard Insurance we have a team of professional and experienced life insurance brokers across Canada who can help you. Feel free to contact us to be connected to a local life insurance broker in your area for a no obligation review of your life and health insurance plan.

The article was written by +Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about trusting your life insurance broker would be very much appreciated.

Focus on Health Insurance #2: Growing Families

What young families need to consider for health insurance coverage

For many young families, health insurance is a very big issue. Even the basic ongoing costs of prescription drugs and dental work can add up to a hefty monthly bill. And, because young families usually carry high debt loads and have lots of expenses for children, a more serious event like a disability or critical illness could push growing families over the edge.

This article will give you a good sense of the demographics of the average young Canadian family, their financial challenges and the biggest risks to their financial picture. Not everyone can afford every type of coverage they would like, but getting started with some basic and inexpensive health insurance plans can really save a growing family if something serious happened.

What does a typical growing family in Canada look like?

Here is a typical demographic profile of a young, growing family in Canada. Maybe it looks familiar to your family:

• Age of parents, 29 – 45 years old
• Married or Common-Law with between 1 – 4 children
• Have a mortgage, car loan(s) and often a line of credit
• Very often both spouses work
• Time is precious and life is very busy between work, family activities, children’s school and extra-curricular activities, etc.

Young families are often trying to get ahead quickly in life. They take on considerable debt levels to buy their dream home, give children every opportunity, live in the right neighbourhood, have kids go to the right school, etc. Both spouses often feel they need to work to afford the life they have chosen.

Young families are not afraid to spend money, and they do so regularly, buying what they want and need to deck out their home, go on family vacations, eat out, etc.

Even though they have dual incomes, young families often feel financially squeezed. They are very concerned about jobs and paying off debt. Extra cash will usually go into paying down the mortgage vs. saving into an RRSP. Saving for their children’s education is also of paramount important and will also usually come before RRSP savings for the parents.

Growing families (the parents) tend to mistrust large financial institutions like banks and insurance companies. They want financial advice on their terms, with personalized service that caters to their busy life. They want to be educated and have a face-to-face advisor they can trust.

Key financial challenges for growing families

So, if that is the demographic of the average growing family in Canada, what challenges do they face? Let’s take the profile above and boil down the real financial picture:

• Their mortgage is the largest debt that young families have. The average mortgage in Canada is about $275,000, but can be much higher for new home owners in large Canadian cities like Toronto, Vancouver and Calgary.
• The average age of a mortgage holder in Canada is 37.
• They usually have at least one car loan and a line of credit of $20,000 or more.
• They often carry credit card debt of $5,000 or more month to month.
• RRSPs are minimal and are more common through employer sponsored plans vs. personal RRSP contributions.
• They will spend at $50 – $200 per month, per child on education savings through RESPs or life insurance.

We can see that the biggest factor that jumps out is the debt level. Mortgage on the house, loans on cars and even a line of credit to buy all the stuff they want now.

The biggest risk factor is that growing families are living on borrowed money. They MUST make regular debt repayments or the lifestyle they have leveraged themselves into will quickly end. Young families must make the mortgage payment, car loan payments, service their line of credit, etc. This can easily eat up over 50% of their monthly disposable income. So if one spouse stopped earning, there would be no money for things like food, gas, utilities, etc.

Health insurance: setting the stage for success

These risks exist for growing families in Canada. It is very common for parents of young families to buy adequate amounts of life insurance to protect their spouse and children. Term life insurance is very inexpensive in Canada today and is a cost effective way to be covered from the big risk of death.

Once the life insurance is in place, most growing families stop planning. They forget about their risk exposure to things like disability, critical illness or even ongoing health and dental expenses. Health insurance is a fundamental part of financial planning for young families, so they can continue to meet their debt obligations and maintain their lifestyle, no matter what happens in life.

Even if you have an employer sponsored group benefits plan that affords you disability coverage and health and dental insurance, you should still have your health insurance plan reviewed. About 45% of workers in Canada do not have any form of group insurance coverage, and are totally exposed to health risks. Here are the types of health risks growing families face:

• An income earning parent becoming sick or injured and unable to work
• A child being diagnosed with a serious illness, requiring parents to put work and life on hold to help their child recover or cope with the illness
• A parent being diagnosed with a critical illness requiring extend recovery time and expensive medication and rehabilitation services
• Ongoing health and dental costs that could seriously affect the family’s ability to meet monthly bills as they come due

With all these risks, here is how to allocate your insurance dollars if you have to choose which benefits to buy first:

• Disability insurance (if you do not have group disability coverage). Being disabled for an extended period is your biggest risk and more likely than any other health event during our working career.
• Critical Illness Insurance. Most group plans do not include this coverage and it can save a family financially when a parent or child must go through extensive treatments and recovery. Plan to be a financial survivor of a critical illness, not just a regular survivor.
• Health and dental insurance. Being able to pay for prescription drugs and dental costs can be very important to a growing family’s monthly budget. The prescription drug and extended medical coverage is good risk protection, but dental coverage is very expensive and might be avoided to save money.

Find out more about health insurance planning for your family

If you don’t have adequate health insurance coverage, or you just don’t understand the health insurance plan your employer’s group insurance gives you, we can help. Contact Life Guard Insurance for a free, no obligation review of your health insurance needs to protect your growing family.

The article was written by +Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about health insurance for growing families would be very much appreciated.

Dental Insurance has Very Expensive Premiums

What do you get for investing in dental insurance?

Unlike prescription drug coverage or extended medical insurance, dental insurance is one of the most costly forms of health insurance coverage you can pay for. Insurance companies know that you will use your dental insurance coverage frequently if you have it. Your local dentists wants you to come back for regular checkups, do lots of preventative treatments, and from time to time a major bit of work to keep your teeth and gums healthy.

In no way is this article suggesting you don’t need to get dental work done to fix up your teeth and keep up with oral health. I encourage everyone to follow the advice of their dentist and do the work that needs to be done. What we are talking about is whether or not you should pay for a dental insurance policy to cover the costs of ongoing dental exams and treatments over your lifetime.

Pros for having dental insurance

Protects your monthly budget from dental cost shocks

If you have a large family, there are many times with parents and children that they need dental work done immediately. Dental emergencies will come throughout your life, and they are not cheap. An unexpected dental treatment for a cavity, broken tooth or root canal could cost you thousands of dollars. If this would seriously affect your budget and make it hard to pay for things like your mortgage or groceries, you might want to have a dental insurance plan. It could save you from short term financial hardship.

Peace of mind you have coverage

Many people just like to have the peace of mind that they have insurance for all health and dental expenses. You might be accustomed to having coverage from being a member of a group benefits plan at work, where a large percentage of your dental expenses were covered. Even when people leave their employment and lose group insurance benefits they want to continue the coverage and have the same peace of mind. Sometimes the cost of dental insurance is less of a burden than worrying that your family is without coverage.

Your employer pays for it through a group benefits plan

If you are lucky enough to have a group benefits plan that your employer pays for, then take full advantage of the dental insurance. The high cost of the premiums are still being paid, but not by you. The cost is put onto the employers financial books, and becomes a tax deductible expense to the business. The benefits you enjoy are a non-taxable benefit to the you (the employee), so use the coverage and enjoy the security it provides. Be aware though that increased usage by all employees in the group will push up premiums for the employer. If costs go up too high the employer might reduce benefits for dental insurance or cancel the plan altogether. It is not a guaranteed policy that you own – it belongs to your company.

Premiums might be tax deductible

If you are paying for your own dental insurance plan you might be able to tax deduct the premiums. If you are self employed with a corporation, you can set up a Private Health Services Plan (PHSP) that can tax deduct the premiums for your personal dental insurance policy from your company’s gross income. All the benefits you would enjoy from the dental insurance plan would be tax free to you if set up properly as a PHSP. Even if you are not incorporated, the costs for eligible dental care will still create tax credits for you and your family.

Cons for paying for dental insurance coverage

Insurance companies make at least 30% profit over time

Insurance companies are not in the business of losing money on any of their insurance products. If you own a dental insurance plan that is costing your family $250 per month in premiums (family of 4), that adds up to $3,000 per year. In some years you might have a lot of dental expenses for each member of the family, adding up to a cost much higher than the $3,000 you spent in premiums. You might each maximize your eligible coverage in a given year, and take out $6,000 to $8,000 in benefit for that year. Not every year will you have lots of dental expenses and/or emergencies. In many years all you and your children will need is a basic checkups and cleanings. That would cost only about $400 – $500 per person. This would add up to $1,600 – $2,000 in paid out benefits. The insurance company then pockets the $1,000 plus in premiums as profit and reserves for future claims. Over time an insurance company will take in at least 30% more in premiums than paid out in expenses. They have to in order to cover operational expenses in running the dental insurance plans and to make a small profit. So, paying your dental costs out of pocket throughout your life would mean you keep that 30% extra as savings.

Pure costs can generate tax credits

Even if you don’t have a PHSP, you can still get immediate tax credits for dental expenses on your personal tax return. Each member of your family is eligible for tax credits equal to 3% of their net income or $2,024 per year (whichever is less) for medical expenses incurred during the year. Therefore, dental expenses you pay for out of pocket will reduce your taxes owing each year.

A PHSP can be a better alternative and more tax efficient

If you are incorporated you can set up a Private Health Services Plan (PHSP) to allow you to transfer 100% of all eligible dental and medical expenses to your corporation. These expenses are paid for by the corporation as a tax deductible business expense and the benefits are non-taxable to the employees and their families. It is one of the best kept secrets in Canada today; those self employed or small corporations can have their companies pay for health and dental expenses, create a tax deduction, and give employees a tax free financial benefit. Basically a pay-as-you-go plan with tax credits.

Pay-as-you-go will save money over your life

If you don’t have a group dental insurance plan, you might be better off just paying for expenses as you go through life. Setting up a savings account for extra expenses, like the new TFSA account, would be a great place to save money for many of the unforeseen dental expenses throughout life. Overall you would be able to save about 30% of those ongoing premiums if you can pay for expenses yourself. Then, accounting for the tax credits you would get for running the expense through a PHSP or getting regular tax credits for dental costs, you would be even further ahead. Unless you really want the peace of mind and monthly budget control that dental insurance can provide, paying your costs yourself is actually a better financial plan.

Contact Life Guard Insurance to review your family dental insurance plan

If you currently have a dental insurance plan, or you would like more information on getting one or a PHSP, feel free to contact Life Guard Insurance. We can help evaluate whether or not you would benefit from paying for dental insurance.

The article was written by +Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article Is Dental Insurance Worth the Cost? would be very much appreciated.

Designing a Personal Insurance Plan with Life & Health Insurance

A personal insurance portfolio has a hierarchy of needs

If you have even gone through a complete personal insurance planning exercise, you will find there are many life and health insurance products that could benefit you. Can you afford to buy all the insurance you need? Doing your personal insurance planning is a financial balancing act. You can’t be “insurance poor”; spending so much money on life and health insurance that you can’t afford to save for retirement or forgo a decent lifestyle today.

So, based on your budget, there is a hierarchy of needs when doing your life and health insurance planning. As you put your personal insurance plan in place, most Canadians should take care of these risks in a methodical way:

• Life Insurance coverage
• Disability insurance to protect your income
• Critical illness insurance against life altering events
• Health and dental insurance for those ongoing medical expenses

Life Insurance is your personal insurance plan cornerstone

Life insurance is the cornerstone to any financial plan. That is because a premature death is the most financially impactful event that can happen to a family. Death is an “end game” scenario! Unlike a disability or getting a critical illness, where there is a good chance of recovery and continued life and income, once a person dies there is total loss of that person’s financial contribution to their family.

Imagine a primary bread-winner was to pass away at age 40. If that partner to the family was making $100,000 per year, the immediate loss to the family would be $2,500,000 without factoring in raises and bonuses over time.

Also, there is a need for permanent life insurance planning, such as buying whole life or universal life insurance, for long term estate and legacy planning needs. The younger you buy permanent life insurance the better it is for you. Starting to plan both your short term and long term life insurance needs when you are young will provide both risk management and equity growth throughout your life.

Disability Insurance covers your biggest risk

Disability insurance covers the biggest risk factor of your personal insurance plan. Many people are covered by a group benefits plans through their employers, but still over 40% of Canadians are either self employed, working for a small company without benefits, part-time workers, or working on contract without group disability coverage. These Canadians need to do personal disability insurance planning, especially since the risk of suffering a long term disability sometime in their working career is about 45%.

Also, there is a need for highly paid Canadians such as managers, executives, top paid sales people, etc. to look at a personal disability insurance plan as a top up to their current base group insurance plan. Typically these group insurance plans have a monthly benefit cap and they don’t cover bonuses and/or commissions. Only base salary is covered. This leaves highly paid Canadian workers, who are arguably the most valuable to their company, the least insured against a disability. This large risk exposure should be covered, especially considering the risks.

Critical Illness Insurance can save your personal financial plan

Any personal insurance plan should also include critical illness insurance coverage if you can afford it. Critical illness insurance covers a very common risk, with 1 in 3 people suffering from one or more of the covered critical illnesses before age 65 (illnesses include cancer, heart attack, bypass surgery, stroke, MS, Parkinson’s, and many more). You can get very inexpensive short term critical illness insurance like a term 10 policy or a lifelong permanent plan with full return of premium if you never get sick.

You should really take a look at this very important health insurance policy to protect yourself and your family from the devastating financial impact of getting a life altering critical illness. Once you have had an event or a serious illness you can no longer qualify to add critical illness insurance to you personal insurance plan.

Health & Dental Insurance is a cash flow management tool

A health and dental insurance plan covering prescription drugs, dental costs and extended medical expenses is really a cash management plan for your personal insurance plan. Insurance companies are not in the business of paying out more benefits than the premium they are taking in. In fact, the insurance company has to make a profit on this product! Therefore they take in more premium over time than benefits paid out.

The real advantage to most people who own a health and dental plan is feeling secure that they are not going to have to pay a very large amount of money out of pocket in any given month. They want to be secure that ongoing medical expenses will be paid from the health and dental insurance plan in exchange for an ongoing monthly premium. It basically gives people financial peace of mind with their monthly budget/expenses.

Life Guard Insurance can help design a personal insurance plan for you

If you are looking to either start your personal insurance plan or take the next step, we can help. Contact Life Guard Insurance to be put in contact with a local life & health insurance broker who can help you design your personal insurance plan.

The article was written by Mitch Reynolds+. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article  Building Your Personal Insurance Portfolio would be very much appreciated.

A Life Insurance Broker Knows the Mass Market Is Dead

Get a Uniquely Customized Risk Management Plan from a Life Insurance Broker

Any life insurance broker in Canada with any industry experience can tell you that the mass market of selling one size fits all life and health insurance to Canadians is dead. This is a fairly new shift in the Canadian life insurance marketplace. It was only about 15 years ago that life insurance brokers and managing general agencies (MGAs) became a major distribution channel for life insurance companies. Before that life insurance was mainly sold by career agents who worked for one of the major life insurance companies.

These captive agents, of which there are a few remaining organizations in Canada like Sun Life Career Sales, Primerica and RBC Insurance Career Sales, have only one limited product line to sell. They must try and squeeze all their diverse clients’ needs into a one-size fits all product for life and health insurance because they don’t have the ability to shop the Canadian marketplace for alternative solutions.

How a life insurance broker can give you choice

The life insurance agency that Life Guard Insurance works with is called PPI Solutions. PPI Solutions is Canada’s largest national MGA (Managing General Agency) and has thousands of life insurance brokers under contract across Canada. You see, life insurance companies like Manulife and Sun Life don’t deal directly with each individual life insurance broker. They outsource the maintenance of regional offices, administrative staff, client management systems, etc. to an MGA who has the staff, systems and resources to service a whole group of life insurance brokers.

PPI Solutions, being Canada’s largest MGA, has contracts with 18 of Canada’s largest life insurance companies. Each life insurance company has a suite of products to choose from. Therefore, our life insurance brokers can access all these different life insurance companies to sell policies to their clients. Now that is a lot of choice! Our brokers affiliated with PPI Solutions have access to well over 150 different life and health insurance products. Each policy can be uniquely customized for the amount of benefit required and individual riders that can be added.

So, there is an almost unlimited amount of choice when dealing with a life insurance broker. They don’t have to fit you into a product. Rather, they have to research the market and find the insurance product that best suits you and make it fit your unique situation.

The advantages of dealing with a broker face-to-face

Email, the internet and the phone make doing business much easier today than even 5 years ago. Documents can quickly be scanned and emailed. Original documents can be sent overnight by courier. Video conferencing can make it like you are almost in the same room.

Maybe one day when video technology is of high enough quality and universally used the traditional face-to-face appointment with an advisor could be replaced (we would also have to replace the formal ink signature with an e-signature of some type). Until technology is so good that it becomes invisible, and the connection between life insurance broker/advisor and client is not watered down, the face-to-face appointment is still the best.

A life insurance broker needs to understand your unique family or business situation. Everyone’s story is different, and by meeting with you and doing a full discovery of your needs a life insurance broker can then recommend the right products to solve your risk exposure. There might even be risks you have never before thought of. There is a lot more to the life insurance business than plain old life insurance.

As an example, here is a brief description of my last 5 clients (without divulging any personal info):

• A young family with a new baby wanted to do proper life insurance planning. The parents got Joint First-to-Die Term 100 life insurance and the baby got a small whole life insurance policy.
• A wife and mother of a child with a disability took out permanent life insurance to make sure she leaves money to her disabled child when she passes and is no longer there to provide support.
• A senior IT professional who just left employee status to become a consultant lost benefits and needed life and disability insurance.
• An Oil & Gas drilling consultant needed disability and critical illness insurance to protect the family, especially since deciding to take up motorcycling again.
• A young couple having a baby in the 2011 wanted a low cost life insurance plan since the husband was finishing university and the wife will need to go on maternity leave soon, so they got term life insurance.

As you can see there isn’t one case here that seems similar to the other. Even though our houses might look like cookie cutter, color matched, row-on-row suburban uniformity, behind each door there is a family as unique and different as you are from the parents who raised you. A life insurance broker knows this and can design YOUR plan that is fits your family.

Why the internet can never truly replace the role of a life insurance broker

I do believe the internet will rock almost every industry in the world to its core and change the way we all do business and interact with those who have products and services to sell us. Where the internet excels is by taking inefficient markets and eliminating those inefficiencies and reducing costs for the end consumer.

This is where the traditional middleman comes in and creates barriers for consumers and adds a layer of cost for consumers to cross those barriers. Jeff Jarvis, in his book What Would Google Do? highlights real estate agents as a classic example of a middleman making money off an inefficient market:

Real-estate agents have nothing to fear from me – or, they think, the internet – because they control one of the last dark pools of restricted information left in the business: the multiple-listing service (MLS) database of properties for sale. If your house isn’t listed there, buyers won’t see it and other agents won’t show it and sell it.

And that is the main reason real-estate agents can charge up to 6% commission to sell your house. Otherwise they are a glorified door opener. You can make up your own mind whether or not to buy the house. And it has been researched that real-estate agents actually create less value, as they typically leave their own personal properties on the market 10 days longer and sell them for 3% more than their clients’ houses.

So why do I go into detail about real-estate agents. In order to compare them with life insurance brokers. I believe that more people would buy life insurance if they had an open source of comprehensive information about life and health insurance products to research on the internet. And if they knew their life insurance broker has access to all the life insurance companies in Canada and could shop the market on their behalf. The vast amount of products, complexity of those plans, individualized design, continuing education and training, and the market research broker’s do for their clients does bring value to the market. Then, if a prospective client can quickly and easily compare prices from all different insurance companies online, that too keeps the life insurance broker accountable to their clients to find the best deal.

A life insurance broker cannot be automated by an internet program because they bring value in advice and access that can only be gleaned from human interaction.

How a life insurance broker earns commissions by providing value

I thought this section would be valuable for life insurance shoppers to understand. A life insurance broker is paid a commission from the insurance company for selling you a policy. There is no advance on commissions. They can only earn the commissions once the policy has been through the underwriting process, is issued by the life insurance company, and accepted by the client (you). There is a lot of hard work that goes into meeting with clients, designing plans, researching market alternatives, presenting solutions, and dealing with underwriting in order to get to a finished product – a life or health insurance policy in place.

Once they deliver you the policy they are paid a commission approximately equal to the annual premium you are paying. Sometimes a little more, sometimes a little less. This is a onetime commission payout, and the life insurance broker has only a very minimal trailer on the policy which might end after 4-5 years. From that commission, the life insurance broker must run their office, pay staff, lease office space, and all other expenses a small business owner might incur.

The business of being a life insurance broker can mean a good income, but not without a lot of hard work and taking care of their clients not only for today’s sale but far into the future as their needs change.

Life Guard Insurance can help you find the best life insurance broker

At Life Guard Insurance we have connections with PPI Solutions life insurance brokers across Canada. We can find the best life insurance broker in your area who specializes in family and business life insurance planning. Feel free to contact us today to be matched up with a life insurance broker.

The article was written by Mitch Reynolds+. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about the value of a life insurance broker would be very much appreciated.

Life Insurance Provides More Than Money – It Provides Security

What did people do before they could buy life insurance?

Have you ever wondered where the whole concept of life insurance came from? Why do we need this product and why do so many people own it? Many times in my career I’ve heard people say, “I don’t believe in life insurance.” And for that one person the product might not be necessary or make sense, but about 75% of Canadians own some form of life insurance (either a personal policy and/or through their group benefits).

So, if life insurance is so common and so important, why do we need it today, in our modern society and we never needed it before? These are questions that an insurance guy with a history degree tends to ask (OK, so now you know I’m a history buff). The answer to this question lies in the fact that life insurance is much more than a financial product. It is an artificial financial construct to replacement the socially responsible “village” of our past.

How the village managed risk

Let’s go back in time, say 300 years, to an early modern village in Europe. This was a place where everyone had a role to play in society – often a life you were born into as your parents were your teachers. Imagine your village, where you have 10 brothers and sisters, parents, grand-parents, aunts and uncles, cousins, nieces and nephews all living together in your village or in neighbouring villages. Families were much larger (birth control was invented in the 1970s) and your “kin” were probably married to or related to almost everyone in the village. It was a truly interwoven society.

So, when tragedy struck, and it struck often back then, how would the village handle it? The interwoven society, all relying on one-another, all involved in each other’s business, would step up to feed and care for those who had lost their parents or providers. We’ve all heard the old saying, “it takes a village to raise a child.” This is the kind of society that you could rely on your neighbour to help raise your kids, because they were probably also your relatives.

The modern industrial revolution changed everything

It was the industrial revolution that started almost 200 years ago now that changed how our society works. Industrialization brought us the factory, mass production, and efficient transportation. Less people were need on the farms because machines could now do the work of many people. The factories needed workers, so they centralized in the cities. The great human migration from the land to the cities began. People went where the work was, leaving behind their families and the close knit societies of the village.

This was a turbulent time in our human history. Things were not great in the cities if you were a poor factory worker. There was no health care, housing was bad, and schools had not yet been invented so children often worked in the factories too. The industrialists took advantage of the workers who left behind their social safety net and were now very vulnerable in the cities without a financial or social support system to fall back on.

It took most of the last century to sort through the problems that industrialization brought to human society. We had revolutions in Russia and Germany (communism and national socialism – think Nazis). There was the rise of the labour union and ultimately the America Civil Rights movement to give the poorest of the poor workers in the USA, the ex-slaves, rights in their society. I don’t think our societies have got it all figured out yet, as we can see by the current state of the world. But we have made a lot of progress in the Western World towards a safe and secure society (the problem now is the developing world wants what the west has, and there just isn’t enough to go around).

So where does life insurance fit in?

I hope the very brief history lesson didn’t bore you. I just wanted to paint a picture before jumping into how life insurance has risen as one of the foundational products for personal risk management today. Most people know what risk management is. It is a way to manage your personal financial risks from a very high potential loss downwards using financial products and strategies. Life insurance isn’t the only way to manage risk, but it is the easiest and most convenient way in our society today.

Life insurance has become a tool to help the average Canadian manage their risk. Fundamentally, life insurance isn’t about money. It’s about providing a life and a lifestyle after a breadwinner is gone. Your neighbours won’t take in your children in and none of us want to burden our extended family with the responsibility, at least not without the resources to go along with it. Our society has not done a good job of institutionalizing social responsibility. Look at the foster care system and how many problems can come out of that. Many disadvantaged people slip between the cracks of our social system where as the village of the past would have banded together to care for the less fortunate and give them a place in society. So, life insurance has become that societal safety net for families when we can’t depend on the system or our neighbours to provide for those we love.

Even the governments got in on the life insurance business. The Canada Pension Plan, which started in the 1950s, included $2,500 of life insurance for every Canadian worker. Unfortunately the Canadian government never increased the death benefit, so today it is still $2,500, which doesn’t pay for much. There are monthly benefits called the Orphan benefit and the Spousal benefit which provides a monthly income for children and non-working spouses through the Canada Pension Plan if a working spouse dies. Companies began offering life insurance as part of their employee benefits package to attract and keep workers too.

The first personal life insurance policies in Canada were sold about 140 years ago. Back then all that was offered was permanent whole life insurance, and it was mainly for the middle class and rich people. There wasn’t a product well priced for pure risk protection for lower income Canadians. Fast forward to today and we have some of the most competitively priced term life insurance policies ever. It costs Canadians less per thousand dollars of life insurance today than ever before. For instance, a 40 year old male non-smoker can get life insurance for as little as $0.45 per $1,000 per year!

So, as the need for life insurance has grown, a global industry has risen. There are not only life insurance companies in Canada today, but international re-insurance companies that consolidate life insurance risks from around the world, and are able to bring the prices down (the larger the group of insured lives, the lower the potential risk). It has never been more cost effective to protect your loved ones with life insurance than it is today.

If you don’t have personal life insurance, Life Guard Insurance can help

Feel free to contact Life Guard Insurance to be put in contact with a local life insurance broker who can show you how to provide your family with the financial security you need.

The article was written by Mitch Reynolds+. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about life insurance, a history lesson would also be very much appreciated.

Group Insurance Education Symposium in Calgary

September 26 & 27, 2011 – Register Now!

If you are a licensed insurance broker in Calgary we would like to share with you this excellent upcoming educational symposium for group insurance sales. If you are already in the group insurance business or looking to enter group insurance sales, this symposium is the perfect educational forum to learn the skills needed for group insurance sales.

The Business Career College is an advisors’ educational institution that we highly recommend here at Life Guard Insurance. Please see their advertisement below for more information on this educational forum coming soon to Calgary.

If you’re attending we hope to see you there.

Mitch Reynolds

President, Life Guard Insurance

Group Insurance Symposium: Calgary, Alberta Where: Business Career College Calgary Campus #115 – 2323 32 Ave NW Across from Joey’s at Barlow and 32nd Calgary, AB T2E 6Z3 Driving Directions When: Monday September 26, 2011 at 8:30 AM MDT -to- Tuesday September 27, 2011 at 5:00 PM MDT Add to my calendar Dear Insurance Advisors, Following a successful Group Insurance Symposium in April in Edmonton, Business Career College is holding a Group Insurance Symposium In Calgary, Alberta.  The dates will be September 26th and 27th of 2011.   This session will provide 15 Life and 15 A&S Credits.  (AIC #30782) The price is $185 plus GST. Presenters have been chosen with the specific goal of helping you to build your group insurance business and better understand group benefits.   Please click on the link below to register. Invites are coming soon for sessions in Ottawa, Vancouver, and Winnipeg! Register Now! Tentative Speakers and Topics include: Technology and Benefits:  Global Office Systems Employee Assistance Programs:  HumanaCare Employee Communications:  QuikCard Group Pensions:  Desjardins Group Travel:  RBC Insurance Plan Design:  Manulife Disability Management:  Sun Life Drug Trends:  ClaimSecure