#1 – Mortgage Insurance
If you have your mortgage insured through your bank with Mortgage Insurance, then you are not alone. Many Canadians are not aware that this is the biggest mistake to make when they are getting a mortgage (or loan) through their bank or credit union.  To understand why you are making one of the biggest financial mistakes by buying mortgage insurance, read this full article on why you are making one of the biggest financial mistakes you will ever make.

#2 – What is the Right Amount of Life Insurance to Purchase?
Any financial advisor will stress having the right amount of coverage. It’s important for clients searching for Life Insurance to ensure that they first focus on the right amount of coverage, and secondary to this, focus on the appropriate term of coverage.

#3 – Working with a Captive Agent
A captive agent is only allowed to sell his/her own company’s products. Insurance companies employing captive agents generally charge higher premiums than do insurance carriers employing independent brokers. At Life Insurance Adviser.com we are all brokers in order to shop all the major insurance companies to find our clients the best value with the most competitive products in the marketplace.

# 4 – Optional Life Insurance through your Companies Benefit Plan
Most Canadians have some basic insurance (i.e.: $25,000 or 1x Annual Earnings) through their employers group insurance plan. Although this is nice to have, some Canadians opt for additional coverage amounts because it is offered to them. What these Canadians don’t realize is that most of these plans’ increase yearly in cost. These plans also generally have a higher initial cost compared to what is available in the marketplace. Also, the important thing to remember is that if you leave your employer, you don’t have the option to keep that life insurance at that same rate. This is especially important if you have developed a health issue or have had a change in health because your ability to purchase individual insurance at that time may be restricted or lost.

# 5 – Association Plans
Many associations offer Life Insurance options for its members. These plans from first glance look very attractive, although after careful review and proper comparison, these plans are not all that good. The CAA offers a plan for its members of the Canadian Automobile Association. It is also very common to see most professional associations (Ie; CDSPI – Canadian Dental Service Plans Inc., OMA – Ontario Medical Association)offering these plans to graduates and its members. Read this full article to understand why you are paying thousands more in premiums without the necessary guarantees!

# 6 – Permanent Insurance versus Term Insurance
There has been a constant debate within the financial industry relating to which type of insurance is the best to purchase. Every person’s financial situation is different and selecting the right type of insurance should always come secondary to selecting the right volume of coverage. Many people purchase the bulk of their insurance with term insurance in order to cover off “term risks”. A good example of a term risk is a mortgage or having dependent children. With both of these examples, it is only necessary to cover a volume of insurance for a set period of time (i.e.; 20 years). Many people will choose a permanent insurance policy for all or part of their Life Insurance needs in certain situations. Many people will purchase a permanent policy for many various reasons (tax-sheltering money, covering a long term risk such as funeral expenses, covering taxes on an estate, and guaranteed investment opportunities).

#7 – Joint Coverage versus Individual Policies
When two individuals (common-law or married spouses, business partners, etc…) purchase a life insurance policy, they have the option of selecting between a joint policy (“one bag of money”) or having two individual policies (“two bags of money”). Joint policies typically offer a cost which is slightly lower than that of an individual policy. It is important to examine your needs in order to determine which is best for you. What many insurance agents neglect to value is that fact that some insurance companies offer joint policies that include a double pay-out if both insured’s die within a set period of time (ie; 60 or 90 days of one another).

#8 – Non-Medical life insurance plan
Some insurance companies offer policies that are underwritten non-medically. This basically means that there is no medical testing required. Most Canadians see these types of plans advertised through commercials on t.v. Although these plans are of value to those that have a history of certain medical conditions, these plans carry higher costs and smaller face amounts than traditional life insurance policies. These policies include no medical test with medical questions ranging from none at all, to usually only a few questions. Non-medical life insurance can be a very good fit in some instances but these policies are designed for applicants with health issues that prevent them from applying for traditional life insurance.

# 9 – Accidental death insurance
Most Canadian life insurance companies market accidental death insurance. These types of policies generate huge profits for the insurance companies, as under 4% of all life insurance claims are related to death by accident. These types of policies are sometimes warranted in order to supplement clients existing Life Insurance portfolio’s depending on certain criteria, such as the client’s occupation and/or lifestyle (i.e.; Truck Driver).

#10 – Policy exclusions
All life insurance contracts have policy exclusions. All life insurance policies include a two-year suicide exclusion. Some life insurance contracts can also carry specific travel and/or recreational activity exclusions. This is another reasons why it is important to work with an insurance broker as we are able to search around to not only find you the best value for your money, but we are able to find you the most favourable contract wording in the industry.

#11 – Misrepresentations on an application
Life insurance policies all include something called an incontestability period.  This period is usually two years and it gives the insurance company the right to contest your life insurance claim if they feel that there has been misrepresentation during the application process. This investigation would usually be based on a “material fact” that the insurance company feels was not disclosed by the insured at the time of application.

# 12 – Replacing a Life Insurance Policy
Many agents will recommend to their prospects or clients to replace their existing life insurance policies. Many agents will replace an existing policy to try to earn a new policy commission. Replacing an existing term life insurance policy usually only makes sense under a couple of different circumstances. First is when the current policy is nearing the end of its term (ie; Term 10 or Term 20), and the second is if term policy costs have decreased since the policy was purchased. Replacing a Term life insurance policy is much different than replacing an existing whole life or universal life policy. These types of policies should rarely ever be replaced as they are usually secured with guaranteed premiums (based on the age of purchase) and can sometimes have high cancellation/surrender fee’s.

#13 – Keeping corporate life insurance
Many large corporations offer their employees the option to keep their Life Insurance coverage at retirement or at a certain age (i.e.; 65 or 70 years old). These options usually offer maximum coverage amounts with higher premiums than what is available through traditional plans. Some of these policies also include a policy schedule in which the coverage amount starts to decrease at a certain age. In order for a price comparison, please get a free quote.