Industry News

Insurance and Genetic Testing

Genetic testing has become one of the fastest growing trends of recent years.  The improvements in technology and science are making the process more affordable, faster, and easier to access for a larger part of the population interested in ancestry, reproduction, and especially to see if they have a predisposition to genetic disease that is already present in their family lineage.

Much media publicity was involved in how this information would be used and by whom.  Recent legislation prohibits insurance companies from using this information to underwrite a case.  Bill S-201 is a private member’s bill that would actually make it a criminal offence to request access to genetic testing results for commercial purposes including the underwriting of life and living benefits (critical illness insurance, disability insurance, and long term care insurance) in Canada.

insurance_genetic_testingGenetic Non-Discrimination Act:

An Act to prohibit and prevent genetic discrimination

“This enactment prohibits any person from requiring an individual to undergo a genetic test or disclose the results of a genetic test as a condition of providing goods or services to, entering into or continuing a contract or agreement with, or offering specific conditions in a contract or agreement with, the individual. Exceptions are provided for health care practitioners and researchers…”


Insurance companies are issuing statements and advising brokers/agents to make sure they ask no questions about any genetic tests or results of those tests, and certainly not to record any of this information when answering medical questions on applications.

Where is all this going?

Remember the cell phone hoopla?  We didn’t want to be locked into contracts for 3 years.  Government got involved, legislation was passed that a maximum of 2 years was allowed.  What happened?  All we ended up with was a higher cost to the phones that we usually got for free.

Medical questions, including medical questions with regards to medical tests, like urine and  blood analysis, EKG’s, PSA tests, and “information of a genetic nature”, like family history of heart disease, cancer, or diabetes, have always been used by insurance companies to underwrite the risk of insuring individuals.  The more accurate their measures, the better pricing model they can offer their clients.  Correct underwriting ensures that clients pay premiums that are directly related to their individual risk.

Insurance companies are concerned with “anti-selection”.  The process by which people who know they are at high risk are the most likely to request coverage.

Comments such as:

“We are concerned that this legislation could make it more difficult for all Canadians to access life insurance and living benefits products.”


“Bill S-201 is not specific to life insurance only and will impact all lines of our individually underwritten business including living benefits and medically underwritten group insurance.”

Insurance companies are busy assessing the potential impact this legislation will have on their business.  The bottom line is that premiums could increase for all categories, including life insurance, especially critical illness insurance, disability, and group coverage – which many Canadians still rely on but costs are controlled by their respective employer.

All good intentions aside, just like the cell phones, we may all end up paying higher premiums.

What should you do?

Get while the going is good.  Firstly, if you don’t own insurance, start asking questions and get some.  Most Canadians own life and health insurance.  If your contract is coming up for renewal, ask now.  If your mortgage life insurance is through a bank then it is doubly important for you since you have no control over whether they raise rates. They have the right to do so.  If the only insurance you have is through your work, then get your own.  When you purchase your own insurance you can control the amount and cost.  Otherwise, you are leaving both to your employer.  They too can raise rates or reduce your coverage in order to control their costs.

If you know you have a family history of diabetes, high blood pressure, heart disease, cancer, etc. then be smart about it and get your life and health insurance as early as you can.  Lock in the rates for a long duration, or lifetime, or add a guaranteed insurability clause (limitations apply).  You are never too young to have insurance.

Parents, protect your children by applying on their behalf early, especially if you yourself are predisposed to any hereditary illness.  

We take for granted the availability of life insurance and health insurance, like critical illness and disability.  We also take for granted the pricing structure; the knowledge that premiums are fixed for a period of time, or even lifetime.  What if all that changes?

Who’s to say it cannot?  Long term care insurance is a prime example of a product where premiums are only fixed for 5 years at a time.  This was not always the case.  Insurance companies are leaving room for increases to their cost based on experience.  This may become the norm moving forward for both life insurance and critical illness and even disability.

The Aging Workforce Can Benefit from a Toronto Life Insurance Policy

“While it would seem that older Canadians leave their long-term jobs to relax in their golden years, new analysis from Statistics Canada shows retirement is changing, and more than half of these workers aged 55 and older return to the workforce within a decade.

Toronto Life Insurance Brokers told to Consider E-Cig Use as Smoking

Electronic cigarettes (e-cigs) are relatively new to the Canadian market. Provincial and federal health officials have yet to declare their stand on what manufacturers claim is a healthy alternative to smoking. To date it has pretty much been decided that e-cig users will be considered smokers by the insurers.

Want to Pay Lower Premiums for Life Insurance on your Mortgage? Make a few changes.

Drop that cigarette right now, if you know what’s good for your finances.

Tobacco use is a major factor insurance companies look at when they assess your premium. How big is the gap between premiums? In one account, a smoker’s policy costs $135 a month, while a nonsmoker’s costs $70. The good news is most insurance companies only require you to quit smoking for one year to qualify for non-smoking rates. Forbes’s Kate Ashford reports on this and other factors that can really add to what you will pay for life insurance.

Making Informed Choices for Life Insurance in Toronto

This is a prime example of why people should avoid Creditor Insurance offered by lenders. There was only a simple questionnaire and after death this application went through the approval process and Mr. Foreman was essentially declined. Had he went to a Life Insurance broker and applied for proper underwritten insurance it is likely that he would have been rated or declined. At least he would have known prior to dying that he didn’t have insurance on this loan. A quality life insurance broker would have then sourced him some guaranteed issue insurance and at least he would have been covered.

Know How to Use Life Insurance on Mortgage—Ask an Insurance Broker

“Canada’s national housing agency has increased the cost of insuring mortgages for homebuyers who make down payments of less than 20 per cent.

Starting in May, the housing agency will charge an average of about 15 per cent more to insure mortgages, CMHC said in a release Friday.

Prior to the announcement, the premiums ranged between 0.5 per cent and 2.75 per cent. Under the new rules, they will range from 0.6 per cent to 3.15 per cent.

The changes are unlikely to have a major effect on the housing market, but in real-dollar terms, the move makes it incrementally more expensive to buy a home. A heavily leveraged buyer — someone with only five per cent down, and therefore borrowing 95 per cent of the home’s value — would be most affected by the hike.”


Ask about Life Insurance Rates in Toronto—Even When You’re Single

If you’re currently living the “single” life, then you’re very much aware of all its advantages. You get to watch TV whenever you want and as much as you want. You get the whole bed to yourself. You can move to a new apartment, a new city, a new country—at a moment’s notice. You can live the life you want without compromise or worry, except perhaps, when it comes to your finances. Kimberly Palmer reports, for US News and World Report:

According to a 2011 survey from USAA Life Insurance, the number of single people buying life insurance increased 10 percent compared to a year earlier. The biggest growth was among 20-somethings, which experienced a 24 percent increase in life insurance purchases.

The increase appears to be driven in part by the economy. During economic downturns, people across the board tend to buy less insurance, simply because they can’t afford it. So part of the increase in life insurance purchases, which is happening across multiple demographic groups, can be attributed to the economic recovery following the most recent recession.” More

Choosing a Toronto Life Insurance Policy: The Right Questions to Ask

No matter where you live in Ontario, whether it be a small town or a big city like Toronto, a life insurance policy is meant to protect the people who depend on you for financial support. Should the time come when you are no longer able to provide for them, life insurance can help fill some, if not all, of the financial void. A USA Today news article details the importance of Life Insurance:

Life insurance ranks at the top of the list of things consumers know they probably should buy, but get no personal enjoyment from whatsoever. There’s just no happy way to look at life insurance.

But while life insurance isn’t all that much fun to buy, much less talk about, it’s a critical part of many people’s financial plans. A life insurance policy is a pact between you and the insurance company. As long as you pay the bill, or premium, the company will be there to pay a death benefit to your beneficiaries if you pass away, giving them cash to get by.

The piece of mind consumers can get from owning a life insurance policy to protect their families from untimely death can be hard to quantify, but an important one nonetheless.” More

Life Insurance on Mortgage in Canada: Advantages and Disadvantages

According to Michael Babad of The Globe and Mail, many Canadians are now burdened with a huge mortgage debt, which contributed to the increase in household debt per capita for the second quarter of 2013.

“According to Statistics Canada, mortgage debt stood at about $1.1-trillion by the end of the second quarter, up by $18-billion, while other consumer credit hit $500-billion.”

For Canadians in the Greater Toronto Area (GTA) most household debt can be attributed to mortgage debt as a result of buying a home. A quick way to reduce debt would be to sell your home or not buy one in the first place and simply rent. There are a lot of people who make a strong case for this stating many advantages and savings. There are a lot of expenses associated with homeownership like maintenance, taxes, interest etc. These saved funds could be redirected to RRSPs and other savings vehicles. This would take a lot of discipline of course but it is a strategy that has its merits. More

When Securing Life Insurance in Toronto and through-out Ontario FSCO recommends consumers to shop around

The Financial Services Commission of Ontario (FSCO) is a regulatory agency of the Ministry of Finance that regulates insurance, pension plans, loan and trust companies, credit unions, caisses populaires, mortgage brokering, and co-operative corporations in Ontario. More