Bill’s Blog | May 5, 2022
I have been a Life Insurance Broker in BC since 2005, and I can serve anyone in the province. With technology and innovation in the insurance industry, I can help a client with Zoom and online applications. I use a simple three-step process:
- Evaluate your current situation and actual needs
- Provide education and generate several options and quotes
- Once you fully understand your best option and want to move forward. Then we will implement the solution, usually with an online application (expect 1 to 1.5 hours per application).
Depending on the client’s situation and needs, I will start by asking whether you have life insurance: Why? We all have a 100% risk of death, and it is critical you protect your loved ones and structure your estate correctly (life insurance can be a very effective solution in estate planning). These rules or insights generally apply to life insurance and critical illness insurance.
- Often people are underinsured as their situation changes over time. Or they have no insurance.
- They may only have a group policy which seldom is adequate. It is always best to have fully underwritten insurance policies you own. The group insurance is only temporary as long as you work for a company in most cases. Once you leave or you are let go, you have no coverage.
- General rules before you apply for any insurance. Key factors to consider are your age, health, and lifestyle choices. The younger the person is, the less they will pay in premiums. Your health is critical to whether you will qualify for insurance or get rated. Do not apply if you are awaiting medical test results or have a planned surgery. Once the test results or surgery is complete and everything is OK, then apply. Having serious health issues can prevent you from becoming insured or limit your options. Also, career choice, poor habits, addictions, extreme sports or hobbies will affect insurability and your lifestyle choices matter.
If a client has adequate life insurance, I will discuss the importance of Critical Illness Insurance. But, again, it is all about risk and protecting your income while recovering. After death, receiving a critical illness over your lifetime is your second highest risk. So, what is critical illness insurance? It is a policy that covers specified critical illnesses like cancer, heart attacks, strokes and many other serious illnesses (often 24 to 26 conditions on a full coverage policy). You can also purchase a simplified solution for 3 or 4 of the most common critical illnesses. So what are the key reasons to own CI coverage?
- How long could you go without receiving an income without being in a severe financial crisis? One month, three, six, a year or two? It will not be long for many people before they have to cash out investments or sell assets. Doing this can set a person back years financially. Having cash in a crisis is king. Having $25,000, $50,000, $100,000, $200,000, or a million dollars allows you to focus on recovering and not be burdened about income or selling things.
- The policy will pay you a TAX-FREE lump sum payment usually within 30 days if you receive one of the qualifying conditions listed in the policy. You can do whatever you want with this money. Pay off debt, subsidize income, vacation or take an alternative health treatment.
- One of the fantastic riders I can add to many policies is the Return of Premium Rider (ROPR). What does that mean? If you never receive a critical illness over the policy term, anytime after 15 or 20 years or on expiration, you can receive 100% of your premium dollars back. This benefit is available in many Term 65 or 75 policies. You did not receive a critical illness (The best option) or get your money back. I wish all insurance policies had this feature (home, auto, travel etc.), but only critical insurance offers this. It is like a forced savings plan and can provide a sizable payout down the road as you receive 100% of your premiums back.
- When I do seminars on this topic, I will often ask, “how many of you personally know someone who has or had cancer?” and the response is sobering. If I have 20 people present, at least 80 to 90% of the people will raise their hands. Cancer is the number one reason people claim on their critical illness policy. According to insurance and health stats, 50% of Canadian men will receive cancer at some point, and women are at 47%. Cancer does not care at what age it strikes a person, whether an infant, child or adult.
- The second highest claims are related to heart attacks or a severe heart condition. Stokes is number three.
If you would like to explore critical illness insurance to protect your income, family or business, please reach out to me. There is a unique strategy I can offer business owners utilizing CI coverage to protect their business and retain earnings. I am happy to assess your situation and provide options and the right solution. You can reach me by cell: 778-539-7107 or email: firstname.lastname@example.org
PS. I have another Referral relationship that can help you add diversification to your portfolio using proven and select private equity opportunities in Apartment REITs and Canadian Farmland. These are independent of the stock market. If you are interested, please let me know, and I will put you in touch with one of my business colleagues who can provide all the details.
All the best,
Bill Westmacott, Owner