Frequently Asked Questions

Email any questions you might have to info@insuranceadvantage.ca

My term policy is renewable and convertible. What is the difference?

A term policy that is renewable allows the insured to renew the policy for the same term and face amount on expiry of the original term without medical evidence until a date or age specified in the policy.

Common renewal periods include 1, 5, 10, and 20 years. For example, a 10 year renewable policy will renew every 10 years without evidence of insurability. The premiums for each renewability period will increase to reflect the mortality risk for that period and will be higher than the premium for the previous period.

Typically, the policy will state the cost of the guaranteed renewal premiums.

A policy must be written as a renewable policy. Otherwise, it is non-renewable.

A convertible policy allows the insured to convert to permanent insurance for the same or decreased face amount without evidence of insurability.

Conversion is an attractive feature that provides life insurance to a person who might otherwise be left without insurance because of poor health upon expiry of their term policy.

Conversion is not usually available after a certain age. Check your policy.

I have chosen my beneficiary. I was wondering, can you choose more than one?

The beneficiary is a person or persons who will receive all amounts payable when the insured dies. Keeping in mind the face amount of the policy, the number of beneficiaries is up to the owner of the policy.

A beneficiary can be:

The insured’s estate
A person or persons
A class of persons
A business
A trustee
A minor

It is important to select the most appropriate beneficiary(s) when the contract is drawn. However, it is just as important to regularly review the beneficiary(s) appointed to see if a change needs to be made.

What is a contingent beneficiary?

A contingent beneficiary is a beneficiary who would receive the insurance proceeds if the primary beneficiary(s) is not living when the policy matures.

You may have more than one contingent beneficiary.

Is it possible to change my beneficiary?

A person(s) who is designated as beneficiary can be named revocable or irrevocable.

Any beneficiary that is revocable can be changed at any time in writing. If the beneficiary was named irrevocable, then the beneficiary must agree to the change in writing.

I am getting divorced and want to ensure my children are looked after in the event my ex-spouse dies. Is it possible to have the purchase of life insurance in my settlement?

This question is best left to the legal experts. Although we have seen settlements that stipulate insurance as part of the solution, the individual must agree to purchase and continue to pay for the insurance on their life.

Is a disability insurance payout calculated according to declared income or can I choose any amount?

Disability income insurance provides a monthly income to those who are unable to work as a result of sickness or an accident. The amount of disability income payable is based on earned income.

Earned income includes salary or wages, commissions, net research grants, and net business income.

Fundamental to the concept of disability insurance is that benefits received from all sources will NOT pay more to the disabled person than the person received as earned income prior to their disability.

Therefore, the maximum disability insurance payout will be based on a persons earned income; however, they may choose to insure themselves for a lower amount based on a needs analysis and/or affordability.

Do all the insurance companies cover the same illnesses for critical insurance policies?

Mainly, yes, but there are differences. Full coverage polices cover approximately 22 – 26 different critical illnesses. Make sure you are comparing apples to apples when looking at the different offerings. With some insurers you need to add at an additional cost some critical illnesses that others automatically include. There are also insurers that offer “basic” policies. These policies usually offer coverage for 3-4 of the most common critical illnesses: stroke, heart attack, cancer, and bypass.

Is it true that you have to survive 30 days after being diagnosed with a critical illness before you qualify to receive a benefit?

Yes. Critical illness is a “living” benefit and you are your own beneficiary. Most policies have a 30 day survival period but some exceptions may apply. Please refer to the policy contract for details.

Don’t all insurance companies charge about the same amount for the various insurance products?

Prices can be quite different. For example, some insurance companies are more competitive for older clients while others may be more competitive for younger women. Some might be more reasonably priced for smokers while others may take a harder line. You have to remember insurance companies are in constant competition with each other. Using our free quote service ensures you get a wide sampling of the various offerings and pricing according to your situation at the best possible price.

What are the main insurance companies operating in Canada?

There are approximately 105 life and health companies operating in Canada. Some are federally incorporated and may operate in all provinces and some are provincially incorporated and operate only in their respective province.

Here is a partial list of the more commonly known life insurance companies: Manulife, Sunlife, Canada Life, BMO Life, RBC Insurance, Empire Life, Foresters, Equitable Life, Assumption Life, Industrial Alliance, Transamerica, Wawanesa, Blue Cross, Canada Protection Plan, La Capitale/Penncorp, and more.

Are most insurance agents paid on a commission or are they on salary?

At Insurance Advantage, we are insurance brokers. We are contracted individually by each insurance company. They pay us a commission based on business issued and accepted. All insurance brokers are paid in this fashion. There are career agents that work specifically for one insurer only and they may or may not be paid a salary and commission. We cannot speak on anyone else’s behalf but keep in mind the price you pay for your policy is typically the same whether or not your agent is a computer (online) or is on salary or commission.

What is the maximum age that a person can buy life insurance? Are you ever too old to buy life insurance?

The maximum age is 85. Therefore if you are 86 you in fact are too old to purchase life insurance. Since life insurance is priced based on age and health, it would make sense to visit this area of your financial planning much earlier than the maximum age. If you wait too long then your choices in product narrow considerably and the cost might be prohibitive.

Why does the cost of insurance go up as you age?

Insurance underwriting is about risk assessment. The process of classifying or rating the potential degree of risk that a proposed insured represents to an insurance company determines, to a great extent, the cost. The older a person becomes the greater the mortality risk to the insurer, the greater the cost.

Is my agent able to show me competitive quotes from many companies to ensure that I get the best deal I possibly can?

We would like to represent you as your insurance advisor. Therefore the answer is “yes”. We can show you the best product for the best price. We are not partial to any insurer. We are partial to you. We place you first.

Is it cheaper to pay my premium yearly as opposed to monthly?

For most life products, yes. Universal life products – no. Usually the savings is just under one month’s premium. If you can afford to do it, it makes sense to save the extra dollars.