If you aren't looking after your family's finances, Who Is?
|Posted on October 4, 2017 at 2:45 PM||comments (42005)|
Each one of us bears a responsibility to act as our own advocate and plan for our own care when the time comes that we can no longer take care of ourselves. Many mistakenly believe the government will take care of us. Any government assistance covers only the most basic care which is far less than what is considered reasonable.
The most logical solution to manage the inevitable is Long term care insurance. Long term care insurance provides the necessary resources when one is no longer independently able to care, physically or mentally, for themselves.
However, this intelligent solution comes with its own set of issues. Traditional Canadian long term care insurance products require full underwriting and as a result over 50% of applicants are declined. Furthermore, they are very costly and out of reach for most Canadians.
Fortunately, with the “Silver Tsunami” of aging Baby Boomers there are new products arriving in the market place to address these needs. They are affordable and do not require a medical exam. To find what works best for you, I suggest you consult with an experienced insurance broker.
|Posted on July 11, 2016 at 10:20 AM||comments (14601)|
Buying a new home can be a daunting experience. There's a ton of paperwork and some very legal, very serious-looking documents to sign. It all gets quite overwhelming, especially if it's your first time. One thing that banks love to do is tie mortgage insurance into your mortgage agreement, right along with a dangerous-looking checkbox and signature line you need to fill in if you choose to "recklessly" opt out.
What the banks don't tell you is that you may be far better off taking that leap of faith and signing away that mortgage insurance. Here's why I want you walk into that mortgage broker's office, check that box, sign that line and opt out of it with total confidence.
Let's get one thing perfectly clear: this isn't to say you don't need to insure your mortgage, but in most circumstances, an ordinary term life policy will do far better.
With mortgage insurance, everyone pays the same premium. There are no discounts for, say, being a non-smoker or being healthy (or being a woman who will statistically live longer). So, you're usually not getting the best deal. Even if you aren't a chain smoker who eats a pound of bacon every day, you probably still aren't getting a better deal. In fact, you may be paying for nothing.
A scary, technical-sounding word that simply means that your insurance is "underwritten" to determine if you qualify. Assuming you do, your cost of insurance is based on your age, health, activities and pre-existing conditions, but as long as you qualify and pay your premiums, your coverage is guaranteed and the policy will pay out. The bank's mortgage insurance may use "post-claim underwriting." This means that they'll only decide if you qualify after a claim is made, at which point they may decide you never did qualify and wind up paying nothing. This practice seems terrible, but apparently it really happens, so buyers beware.
The bank's mortgage life insurance benefit value declines as you pay down your mortgage. So, while you continue to pay the same price for insurance, it's actually worth less. Traditional term policies keep their value and usually do so with lower premiums.
With mortgage life insurance, the beneficiary is the bank -- with personal life insurance, you get to name your beneficiary. You (or rather, your beneficiary) will have the flexibility to choose how to spend the money. They may not need it to pay off the mortgage. They could choose to invest the money or just spend it Brewster's Millions-style. In general, though, this means better financial security for your loved ones.
Mortgage life insurance is tied to your mortgage. If you buy another home or chose a different mortgage lender at renewal, you'll have to take it out again. A simple term-life policy will be portable and continue to cover you regardless of who you have your mortgage with.
If you already have life insurance, you may actually already have sufficient (or partial) coverage for your mortgage. Only a proper needs analysis by an insurance adviser will determine that. Your mortgage lender will not bother with this and always cover the full mortgage amount.
Consolidation of Coverage
With private term life, you can consolidate all your insurance needs (mortgage, income replacement at death, education, childcare, etc.) into a single policy. This saves you money on overhead and fees of having multiple plans. With the bank, you can only cover the mortgage and must hold different insurance policies for the rest of your needs.
Finally, remember it isn't just an untimely end that you need insurance for to protect your mortgage and your family. Make sure to consider disability and critical illness insurance in case you become unable to pay your mortgage due to serious illness or injury. Most employers do offer some sort of coverage for this, but always make sure it's sufficient for your needs.
If you're not sure if you have sufficient coverage, a good insurance agent or broker will usually be able to give you practical advice on what works for you.
Written by Tea Nicola Published in the Huffington Post Posted: 09/10/2015 12:25 pm EDT Updated: 09/10/2015 12:59 pm ED
|Posted on July 11, 2016 at 10:15 AM||comments (1855)|
Brokers should warn clients of the potential pitfalls of mortgage life insurance, especially from the big banks, following the negative press surrounding a recent claim denial.
Recently deceased Christopher Massa, whose mortgage and mortgage life insurance was with Scotiabank, was diagnosed with lung cancer in October - and it is that diagnosis that has made the bank deny the claim on his $289,000 mortgage.
“The insurer declined Mr. Massa’s claim because he was not eligible for insurance coverage based on his health condition,” Sheena Findlay, a spokesperson for Scotiabank told the Toronto Star. “We understand that this has caused Ms. Massa frustration and we thank her for her continued patience while we investigated this charge.”
Scotiabank offers mortgage protection life insurance based on the age of the purchaser and the balance of the mortgage at time of purchase. Prices range from $0.09 per $1,000 of mortgage amount for someone aged 18-30 and $1.64 per $1,000 for purchasers aged 66-69.
Approval for bundled life insurance is a simple yes or no question, according to the Scotiabank website.
“Approval is based on answering one health question. If you answer ‘No’ to this question and your mortgage is $500,000 or less you are approved,” states the website. “Answering ‘Yes’ to this question does not necessarily mean you won't be approved; it simply means the insurer will contact you for more information.”
The insurance, which differs from traditional life insurance, is meant to act as a safeguard that will take care of an outstanding mortgage in case of death.
The bank claims Massa filled out the questionnaire incorrectly and ended up paying his widow $5,000.
Orginally published in Life Health Professional July 15, 2014, written by Jamie Henry