Simplifying Insurance | Solution Driven
At My Circle Consulting, we understand the importance of making the right insurance choices for your family or business. Whether you're a parent protecting your loved ones, a professional securing your income, or a business owner planning for the future, we’re here to simplify the process and provide tailored solutions.
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Trevor Perron
Independent Life Insurance Advisor
Serving Manitoba & Ontario
License #: LIA-50144 | AIA-50144 | 23218870
204-232-6263
No one really wants to think about life insurance. But if someone depends on you financially, it’s a topic you can’t avoid. Getting life insurance doesn’t have to be hard (or boring). We have some answers to common questions about life insurance so that you can make informed decisions about protecting your loved ones financially.
Life insurance plays a critical role in safeguarding your family’s financial security and providing peace of mind. Its importance lies in its ability to protect those who depend on your income, ensuring they can maintain their quality of life if you’re no longer around.
Financial Security for Loved Ones
Life insurance provides a cash payout to your beneficiaries when you pass away, helping them cover essential expenses like daily living costs, mortgage or rent payments, and outstanding debts.
Covering Major Expenses
It can fund significant financial needs such as college or university tuition, long-term care for family members, or even a child's wedding.
Peace of Mind
Knowing your loved ones will not face financial hardship in your absence offers unparalleled peace of mind.
Debt Protection
The payout can be used to settle any outstanding debts, ensuring your family doesn’t inherit financial burdens.
Legacy Building
Life insurance can also serve as a way to leave an inheritance or provide for charitable causes, ensuring your legacy lives on.
Regardless of the type of policy - whether term, whole life, or another permanent option - they all share the common purpose of delivering financial protection to your family.
In short, life insurance is an essential tool for ensuring your loved ones are financially prepared for the unexpected, making it a crucial part of any comprehensive financial plan.
Life insurance can provide financial security for your loved ones by covering a wide range of expenses. Here's a breakdown of common expenses life insurance can help with:
Funeral and Burial Costs: Cover the costs of funeral arrangements and burial services.
Uncovered Medical Expenses: Any medical costs not covered by insurance or other means.
Mortgage or Rent: Ensure the family can maintain their living situation without financial strain.
Car Loans: Pay off any outstanding car loans to avoid financial burden on the family.
Credit Card Debt: Clear credit card balances to prevent accumulating interest or financial stress.
Taxes: Help with estate or inheritance taxes that might otherwise be a financial strain.
Estate Settlement Costs: Assist in covering legal and administrative fees involved in settling the estate.
Food: Ensure the family’s basic needs are met.
Housing: Maintain the family’s home or rental expenses.
Utilities: Cover essential services such as electricity, water, and gas.
Transportation: Ensure transportation needs are met, whether for commuting or family use.
Health Care and Insurance: Maintain health insurance and medical expenses.
Continue a Family Business: Help keep a family business running by covering expenses or hiring staff.
Income Replacement: Replace the deceased’s income to maintain the family’s standard of living.
Education Costs: Cover the cost of schooling for children or future generations.
Retirement Costs: Contribute to the future retirement of a surviving spouse or family member.
Life insurance is a powerful tool to ensure financial security in times of loss, providing for both the immediate and long-term needs of the family.
If someone depends on you financially, you are most likely someone who needs life insurance. Life insurance provides cash to your family or loved ones after your death. This cash, known as the death benefit, replaces your income and the many non-paid ways you support your household. Your family can use this cash to pay for expenses like funeral costs, a mortgage, college tuition, and more.
1. Married or Partnered Couples
Many partners find it difficult to make ends meet without the other earner’s income in the picture.
2. Married or Partnered Couples with Kids
In addition to losing one partner’s income, the surviving parent may have to pay for childcare and other expenses without the other parent around to pitch in.
3. Single Parents
As the sole income earner for your family, you’ll want to think about how to replace your child’s only source of financial support.
4. Stay-at-Home Parents
From cooking meals to shuttling kids to school to helping with homework, stay-at-home parents perform many critical responsibilities that would be costly to outsource.
5. Empty Nesters
Many surviving partners would not be able to maintain the lifestyle they worked so hard to achieve without life insurance.
6. Retirees
Depending on the size of your estate, your heirs could be hit with an estate-tax rate of up to 45%. Fortunately, cash from a life insurance policy gives heirs access to tax-free money to pay for immediate costs and more.
7. Business Owners
Life insurance can help your business in many ways if you, a fellow owner, or a key employee were to pass away.
Life insurance provides peace of mind and financial security, ensuring that your loved ones or business are protected, no matter what happens.
Life insurance generally falls into two main categories: Term Life Insurance and Permanent Life Insurance. Each offers unique benefits based on your financial needs and goals.
Term Life Insurance
Term life insurance provides protection for a specified period, such as 10, 20, or 30 years. It is designed to cover you during a time when you have significant financial responsibilities, such as raising children or paying off a mortgage.
Key Features:
Coverage for a set term (e.g., 10, 20, or 30 years)
Offers the highest coverage at the lowest initial premiums
Most affordable option for individuals on a budget
No cash value; it only pays a death benefit if you pass away within the term
Best For: Those seeking affordable coverage for a specific period of life, such as until your children are financially independent or your debts are cleared.
Permanent Life Insurance
Permanent life insurance provides lifelong coverage, as long as you continue to pay premiums. It also accumulates cash value over time, which grows on a tax-deferred basis. This cash value can be used for a variety of purposes, including taking loans against it, supplementing retirement income, or handling emergency expenses.
Key Features:
Lifelong protection (as long as premiums are paid)
Builds cash value that you can borrow against or use in other ways
Higher premiums compared to term life insurance
Can be used for long-term financial planning, including wealth transfer and retirement supplement
Best For: Those who want lifelong coverage and are looking for a policy that can build value over time for future use.
You Might Want a Mix
In some cases, a combination of both term and permanent life insurance might be the most beneficial approach. A mixed strategy can provide the flexibility of affordable temporary coverage along with the long-term benefits of permanent insurance.
You can assess your needs and financial goals to decide if a combination of these policies is right for you.
The cost of life insurance can vary widely depending on several factors, including age, health, type of policy, and coverage amount. Here's an overview of how these factors impact the cost:
Age: The younger you are, the less expensive your premiums typically are. This is because younger individuals generally present a lower risk to insurers.
Health: Good health leads to lower premiums, as healthier individuals are less likely to make a claim. If you have chronic conditions or smoke, your premiums may be higher.
Type of Policy: Term life insurance is generally more affordable than permanent life insurance (such as whole life or universal life). This is because term policies only offer coverage for a specific time period, while permanent policies provide lifelong protection and accumulate cash value.
Coverage Amount: The more coverage you need, the higher your premiums will be. A larger death benefit comes with higher costs.
A healthy 30-year-old can purchase a $250,000, 20-year level term policy for as little as $13 per month.
If the insured person passes away during the 20-year term, their beneficiaries would receive the $250,000 death benefit.
Term Life Insurance: This is often the most affordable option. For a healthy individual, the cost can range from as low as $10–$30 per month for smaller coverage amounts ($250,000 to $500,000) at younger ages.
Permanent Life Insurance: This typically costs more due to the cash value component and lifelong coverage. Premiums can range from $100 per month to several hundred dollars, depending on the policy type, coverage amount, and the individual's health.
If you're in good health, you’ll pay less. But if you have health concerns such as high blood pressure, diabetes, or a smoking habit, expect higher premiums.
Term life policies provide coverage for a set number of years, whereas permanent life policies cover you for life and have the potential to accumulate cash value.
Even if you're in less-than-ideal health, life insurance is still possible to obtain, though with higher premiums.
Determining how much life insurance you need depends on your unique circumstances and financial goals. Here’s a simple approach to help you calculate the right amount of coverage:
Consider the following types of expenses your loved ones would face if you were to pass away:
Immediate Expenses:
Funeral and burial costs
Uncovered medical expenses
Estate settlement costs
Ongoing Expenses:
Mortgage or rent
Car loans, credit card debt
Utilities, transportation
Living expenses (food, healthcare, insurance)
Future Expenses:
Children’s education costs
Retirement for a spouse
Long-term care or future living expenses
Next, assess the financial resources your family already has, which could include:
Your spouse's income or potential future income
Existing life insurance policies
Savings, investments, or retirement accounts
Other assets (real estate, business interests, etc.)
Subtract the total of your family’s current financial resources from the total estimated expenses. The difference is the amount of life insurance coverage you should aim for.
As a rough guideline, life insurance experts recommend a coverage amount equal to 10 to 15 times your annual income. However, many people may need more, especially if they have significant debts or dependents, or if they want to cover long-term care and education expenses.
For example:
If you earn $50,000 per year, a general recommendation would be between $500,000 and $750,000 in life insurance.
If you have more significant financial obligations (e.g., a large mortgage or multiple children’s education), you may need more coverage.
Debts: If you have significant debts like a mortgage or business loans, you’ll need more coverage to ensure those are paid off.
Dependents: If you have young children or other dependents who rely on your income, you’ll want to ensure you have enough to replace your income for many years to come.
Income Replacement: Consider how long your loved ones would need to replace your income, factoring in their ability to earn or access other resources.
Immediate Expenses: $50,000 (funeral, medical bills, etc.)
Ongoing Expenses: $2,500 per month for 10 years = $300,000
Future Expenses: $200,000 (college tuition for two children)
Total Expenses: $50,000 + $300,000 + $200,000 = $550,000
Current Resources: $100,000 (spouse's income, savings)
Life Insurance Need: $550,000 - $100,000 = $450,000
Using this method ensures that you choose a policy that adequately protects your loved ones.
A life insurance beneficiary is the person or entity designated to receive the death benefit from your life insurance policy upon your death. Beneficiaries can include individuals, organizations, trusts, or your estate. When naming a beneficiary, you typically choose two types:
The primary beneficiary is the first person or entity in line to receive the payout. This could be a spouse, child, sibling, friend, trust, or charity. You can assign more than one primary beneficiary, specifying the percentage each will receive (e.g., 50% to your spouse, 50% to a child).
The secondary beneficiary (or contingent beneficiary) is the person or entity who will receive the death benefit if the primary beneficiary has already passed away at the time of your death. For example, if your spouse is your primary beneficiary and they predecease you, the secondary beneficiary, such as a child or relative, would receive the payout.
Minors: If you designate a minor as a beneficiary, the payout may be held in a trust or managed by a legal guardian until the minor reaches adulthood. This ensures the funds are used responsibly and appropriately.
Charity: You can name a charity as a beneficiary. This can be part of your estate planning if you wish to leave a legacy or contribute to a cause you care about.
Estate: You can designate your estate as a beneficiary, but this means the payout will go through probate, and your beneficiaries may need to wait longer to receive the funds. It may also be subject to estate taxes.
Multiple Beneficiaries: You can have more than one beneficiary and allocate the death benefit in percentages (e.g., 70% to a spouse, 30% to a child).
Review Regularly: It’s important to review and update your beneficiaries regularly, especially after major life events like marriage, divorce, or the birth of a child.
Contingent Beneficiary: Having a secondary beneficiary ensures that your life insurance payout goes to someone if your primary beneficiary is no longer able to receive it.
Choosing the right beneficiaries ensures that your life insurance payout is distributed according to your wishes.
The process for getting life insurance typically involves completing an application, undergoing underwriting, and waiting for approval. The steps in the process can vary based on the type of underwriting used and the insurer’s requirements.
The first step is filling out the life insurance application, where you'll provide information about:
Personal details (e.g., name, age, address)
Medical history (e.g., any past or current conditions, medications)
Lifestyle (e.g., smoking habits, alcohol consumption, occupation)
Coverage amount (e.g., how much life insurance you want)
Beneficiaries (who will receive the payout)
Underwriting is the process where the insurer evaluates the risk of insuring you and determines your premium. There are two main types of underwriting:
Traditional Underwriting:
Application Review: You fill out a detailed application, and you may need to provide additional information, such as medical records.
Medical Exam: You’ll likely need to undergo a medical exam, which typically includes a blood test, urine test, and measurements of height, weight, and blood pressure. In some cases, additional tests or a physician’s report may be required.
Approval Time: The underwriting process can take several weeks because it includes medical reviews and risk assessment.
Premium Determination: Based on the risk assessment, you’ll be placed into a risk class, which determines your premium. Healthier applicants typically receive lower premiums.
Simplified Underwriting:
Online Application: This process usually involves a quicker, online application where you answer a shorter series of health-related questions.
No Medical Exam: No medical exam is required. Instead, the insurer may rely on your answers to the health questions and access to certain health records.
Immediate Approval: In many cases, you can get instant coverage or a decision within a few hours or days.
Limited Coverage: The coverage amount is often lower than traditional underwriting policies, and the premiums can be higher due to the lack of a medical exam and risk assessment.
After your underwriting is completed:
Traditional Underwriting: Once the insurer reviews your medical exam results and application, they will decide whether to approve or deny your application. If approved, you'll receive an offer with a premium quote based on your risk class.
Simplified Underwriting: If you qualify, you’ll receive your policy with immediate coverage, although there may be limitations on the payout in the initial years or a higher premium compared to traditional policies.
Once approved and you accept the policy terms:
First Premium: You’ll pay the first premium, and coverage begins once the payment is received.
Ongoing Payments: You’ll continue to make premium payments on a monthly, quarterly, or annual basis to keep your policy active.
Submit Application: Fill out personal, health, and lifestyle information.
Underwriting: Traditional or simplified underwriting is used to assess risk.
Approval/Offer: Receive your policy offer, including premium and coverage details.
Payment and Coverage: Pay your premiums and your coverage begins.
If you’re in good health, traditional underwriting may be a better option for more affordable, higher coverage. If you need quick coverage or don’t want to undergo a medical exam, simplified underwriting may be the way to go, though premiums tend to be higher and coverage more limited.
If you are denied life insurance, understanding the reason for the denial is essential for determining your next steps. Common reasons for denial include:
Serious Medical Conditions: Conditions like cancer, diabetes, heart disease, or other chronic illnesses may increase your risk for insurers and could lead to denial.
Smoking: Tobacco use increases the risk of various health conditions, which may result in higher premiums or denial.
Heavy Alcohol Use: Excessive alcohol consumption is also a significant risk factor.
High-Risk Occupations/Hobbies: Jobs or activities that involve a higher risk of injury or death (such as extreme sports or dangerous professions) may lead to denial.
Age Limits: Some insurers may have age restrictions for certain policies, particularly for term life insurance. If you’re too old for a specific plan, it could result in a denial.
Criminal Activity: A history of criminal behavior, such as DUIs, convictions, or other legal issues, can make you a higher risk and result in denial.
Financial Risk: Insurers may deny coverage if they view you as a financial risk, such as having a history of bankruptcy, unpaid debts, or poor credit.
Understanding the exact reason for your denial allows you to take the necessary steps, whether it’s improving your health, adjusting your lifestyle, or exploring other insurance options.
It's recommended to review your life insurance at least once a year or whenever a significant life change occurs. Regular reviews help ensure that your coverage aligns with your current needs and financial situation.
Annually: Even if nothing major has changed, it’s a good practice to reassess your life insurance coverage at least once a year.
Major Life Events:
Marriage: When you get married, you may need to update your beneficiary designations and adjust coverage to reflect your spouse’s financial needs.
Having a Child: A new addition to the family often increases your financial obligations, so you may want to increase your coverage.
Starting a Business: If you’ve launched a business, you may need additional coverage to protect your business or ensure its continuity.
Divorce: If you go through a divorce, you may need to change beneficiaries or adjust your coverage to reflect your new circumstances.
Buying a Home: A new mortgage or increased debt can mean needing more life insurance coverage to protect your family.
Retirement: When you retire, your financial obligations may change, and you might want to adjust your coverage or reduce it based on your new financial status.
Changes in Health: If your health improves or worsens, it may affect the cost and coverage of your life insurance.
A life insurance review with a financial professional ensures that your policy is up to date, covering your current needs and giving you peace of mind.
Living benefits of life insurance allow you to access part of your death benefit while you're still alive, typically in cases where you're facing a terminal illness or a serious injury. These benefits provide financial support during challenging times and can help cover medical expenses, take care of your family’s finances, or provide for other special needs.
Terminal Illness: If you are diagnosed with a terminal illness and have a limited life expectancy (often 12-24 months or less), you may be able to access a portion of your death benefit early to help cover medical bills, pay off debts, or fund special expenses.
Chronic Illness: If you become chronically ill and unable to perform daily activities (like bathing, dressing, or eating), some policies allow you to access benefits to cover long-term care or other necessary services.
Critical Illness: Some policies offer living benefits if you are diagnosed with a critical illness such as heart attack, stroke, or cancer. These benefits can help with the cost of treatment, rehabilitation, or recovery.
Long-Term Care: If you need long-term care due to an illness or injury, some life insurance policies offer a rider that lets you access your death benefit to cover these expenses.
Riders/Endorsements: Living benefits are usually added as riders to your life insurance policy. These riders may be included at no additional cost or may require an extra premium, depending on your policy.
Payout: The amount you can access depends on your policy’s terms and the severity of your illness. In most cases, accessing living benefits reduces the overall death benefit that will be paid to your beneficiaries when you pass away.
Living benefits can offer crucial financial relief in difficult circumstances, giving you the ability to manage expenses while still living. It’s important to review your policy to understand what living benefits are available and how they work.
Life insurance generally pays out as a lump sum to the beneficiaries when the policyholder passes away. The payout process involves the following steps:
Claim Submission: To begin the process, the beneficiary needs to file a claim with the life insurance company. This typically involves completing a claim form provided by the insurer.
Death Certificate: A certified copy of the death certificate is required to verify the death and initiate the payout process.
The insurer will review the claim to ensure all conditions are met and the policy is valid. This includes checking that the premiums were paid and that there were no misrepresentations on the application.
Typical Payout Timeline: Most life insurance companies will process the claim and issue the payout within 30 to 60 days after receiving the necessary documentation (such as the death certificate).
Delays: Delays can occur under certain circumstances, including:
Contestability Period: If the policyholder dies within the first two years of the policy, the insurer may investigate the cause of death more thoroughly. This is part of the "contestability period," during which the insurer can review the information provided on the application for any inconsistencies or misstatements.
Unusual Circumstances: If the cause of death is unusual (e.g., an accident or suicide), the insurer may take longer to process the claim.
Illegal Activity: If the policyholder’s death occurred while engaging in illegal activities, some insurers may deny the claim.
Fraud: If the insurer determines the policyholder provided false information on the application, such as omitting important medical details, they may also deny the payout.
Once the insurer processes the claim and approves it, the payout is typically made in a lump sum to the designated beneficiaries. This payment is usually tax-free, though there can be tax implications in certain circumstances.
Understanding the process and potential delays can help beneficiaries prepare for how and when they will receive the life insurance payout.
Life Insurance
Critical Illness Insurance
Disability Insurance
Individual Health and Dental
Travel Insurance
Business Owner?
Group Insurance
Health Care Spending Accounts
Buy Sell Agreements
Key Person Insurance
Split Dollar Critical Illness Insurance
Corporately Owned Whole Life Insurance
Term life insurance provides temporary financial protection for a specified duration, offering flexibility to match coverage with specific financial goals. Below are the common term durations and their key features:
T5 (5-Year Term)
Coverage Duration: 5 years.
Best For:
Short-term financial responsibilities.
Temporary needs like paying off a short-term loan or covering specific events.
Key Advantage: Affordable coverage for immediate, short-term protection.
T10 (10-Year Term)
Coverage Duration: 10 years.
Best For:
Financial obligations spanning the next decade.
Covering costs like a child’s education or reducing mortgage balances.
Key Advantage: Provides stability during critical financial growth years.
T15 (15-Year Term)
Coverage Duration: 15 years.
Best For:
Longer-term goals, such as:
Supporting a child through high school and college.
Paying down medium-term financial obligations like a mortgage.
Key Advantage: Ideal for bridging mid-range financial commitments.
T20 (20-Year Term)
Coverage Duration: 20 years.
Best For:
Securing long-term financial protection for dependents.
Ensuring children’s education or a spouse’s financial security.
Key Advantage: A popular choice for individuals with growing families or significant long-term goals.
T25, T30, T35, and T40 (Extended Terms)
Coverage Duration: 25–40 years.
Best For:
Extended financial commitments, such as:
Supporting a growing family.
Paying off long-term mortgages.
Ensuring financial stability into retirement.
Key Advantage: Offers prolonged coverage aligned with long-term financial plans.
At the conclusion of the term, policyholders typically have the option to:
Renew the Policy: Continue coverage for another term (premiums may increase).
Convert to Permanent Life Insurance: Transition to lifelong protection without a medical exam.
Purchase a New Policy: Opt for new coverage, if needed.
Affordable: Term policies are generally more cost-effective than permanent options.
Customizable: Choose the term that matches your financial goals and commitments.
Flexible Options: Adjust your coverage as life circumstances change.
1. Lifelong Coverage
Provides coverage for the insured’s entire lifetime, as long as premiums are paid.
Unlike term life insurance, Term 100 has no expiration date, making it a permanent coverage option.
2. Death Benefit
Pays a guaranteed death benefit to beneficiaries upon the insured’s death.
Beneficiaries can use the funds for various needs, such as:
Covering final expenses.
Replacing lost income.
Paying off debts or other financial obligations.
3. Fixed Premiums
Premiums remain stable and predictable throughout the life of the policy.
Ensures affordability and ease of budgeting over the long term.
4. No Cash Value or Investment Component
Term 100 is a pure insurance product with no savings or investment features.
Focuses entirely on providing coverage and death benefits without additional complexities.
5. Guaranteed Coverage
As long as premiums are paid, the policy remains in force for life.
Provides financial security and peace of mind for policyholders and their loved ones.
6. Estate Planning Benefits
The tax-free death benefit can be used to:
Cover estate taxes.
Ensure heirs receive an inheritance without financial burdens.
7. Cost-Effective Premiums
Premiums are generally higher than term life insurance but lower than whole life or universal life insurance.
Ideal for individuals seeking lifelong coverage without the higher costs associated with cash value policies.
Term 100 is a straightforward and affordable option for individuals who:
Want lifetime coverage without the complexities of cash value or investment features.
Are looking for a cost-effective way to secure a death benefit for their loved ones.
Need a simple yet reliable tool for estate planning and financial protection.
Whole life insurance is a type of permanent life insurance that provides lifelong coverage and combines a death benefit with a cash value component. Here's a detailed overview of its key features:
1. Lifelong Coverage
Designed to provide coverage for the insured’s entire lifetime, as long as premiums are paid.
Unlike term life insurance, there’s no expiration date, ensuring lifelong protection.
2. Death Benefit
Pays a tax-free death benefit to beneficiaries when the insured person passes away.
Beneficiaries can use the funds to cover expenses, replace income, pay off debts, or meet other financial needs.
3. Level Premiums
Premium payments remain fixed and predictable throughout the life of the policy.
This stability ensures no surprises in premium costs over time.
4. Cash Value Component
A portion of your premium contributes to a cash value that grows over time.
Some insurers allow access to the cash value as early as 14 days, while others may take up to 10 years.
5. Dividends (if applicable)
Certain whole life policies distribute dividends, which policyholders can:
Enhance cash value.
Purchase additional coverage.
Receive as cash payouts.
6. Loan and Withdrawal Options
Policyholders can borrow against the cash value without triggering taxes.
Withdrawals can also be made but may reduce the death benefit and may be subject to taxes.
7. Premium Payments
Premiums are typically higher than term life insurance due to the lifelong coverage and cash value feature.
Consistent premium payments ensure the policy stays in force, offering guaranteed coverage and financial security.
8. Estate Planning Benefits
The death benefit can be used to cover estate taxes, protecting your heirs from financial strain.
Ensures your legacy passes on without significant tax liabilities.
Whole life insurance is ideal for individuals seeking:
Lifelong protection with guaranteed coverage.
A savings component for conservative growth.
Estate planning tools to safeguard heirs from financial burdens.
With its combination of security, savings, and planning advantages, whole life insurance provides a comprehensive solution for those looking to protect their loved ones while building a financial foundation.
Some life insurance policies include a cash value, offering both protection for your loved ones and the opportunity to access funds when needed. Here's what you need to know about cash value in life insurance:
Cash value is a component of certain life insurance policies that grows over time. Depending on the type of policy, this growth can occur through:
Guaranteed and additional cash values accumulating annually.
Policyholder dividends, earned in participating insurance policies, contributing to growth.
It’s important to note that cash value is not the same as a savings account. Accessing cash value can impact your policy’s coverage and the protection for your beneficiaries.
Tax-Deferred Growth: Cash value grows tax-deferred, meaning you won’t pay taxes on its growth unless accessed during the life of the policy.
Death Benefit: The policy’s death benefit, often tax-free, provides financial security to your named beneficiaries. In some cases, the cash value may form part of the death benefit.
Whole Life Insurance: A type of permanent insurance with guaranteed cash value growth.
Participating Life Insurance: A whole life policy offering the opportunity to earn dividends that can enhance cash value.
The cash value in your policy can be accessed in several ways:
1. Borrow Against the Cash Value
Take a policy loan without a credit check or collateral.
Interest applies, and unpaid balances reduce the death benefit.
Excessive borrowing may lead to policy cancellation if the cash value is depleted.
2. Take a Cash Withdrawal
Withdraw funds directly, permanently reducing the death benefit and future cash value growth.
Withdrawals may be subject to taxes.
3. Cancel Your Policy
End the policy to receive the cash surrender value (cash value minus loans, interest, premiums, and fees).
Coverage ends, and any payout may be taxable.
Choosing a life insurance policy with cash value can offer financial flexibility and peace of mind.
Critical illness insurance provides financial protection in case of severe and life-threatening illnesses, ensuring individuals and their families can focus on recovery without the added burden of financial strain. Here's a detailed breakdown of its key features:
Specific Illness Coverage
Purpose: Designed to cover a list of predefined, serious illnesses.
Common Covered Conditions:
Cancer.
Heart attack.
Stroke.
Organ transplant.
Payout Condition: Benefits are paid upon diagnosis of a covered illness, subject to the policy's terms.
Lump-Sum Benefit
What It Provides: A one-time lump-sum payment.
Eligibility: Paid upon diagnosis and survival of a specified waiting period.
Usage: Can be used at the policyholder’s discretion, such as:
Medical expenses.
Ongoing treatment.
Rehabilitation.
Living expenses.
No Requirement for Death
How It Differs from Life Insurance:
Life insurance pays upon the policyholder’s death.
Critical illness insurance focuses on the financial impact of surviving a severe illness.
Flexibility in Use
Where the Money Can Go:
Medical treatments.
Paying off debt.
Supporting daily living expenses.
Any other financial need during recovery.
Additional Riders
Optional Enhancements:
Return of Premium Rider: Refunds all or a portion of premiums if no claims are made during the policy term.
Other Riders: Depending on the insurer, options may vary to further customize the policy.
Premium Structure
Factors Influencing Cost:
Age.
Health status.
Coverage amount.
Illnesses covered.
Supplemental Coverage
Why It’s Used: Complements other types of insurance like life insurance or disability insurance.
Purpose: Addresses the unique financial challenges associated with surviving critical illnesses.
Before purchasing critical illness insurance, it’s essential to review:
Covered Conditions: Ensure the illnesses that concern you are included.
Waiting Periods: Understand how long you must wait after diagnosis to receive benefits.
Exclusions and Limitations: Familiarize yourself with what is not covered to avoid surprises.
Critical illness insurance provides peace of mind, offering financial support during challenging times and allowing individuals to prioritize their health and recovery.
Disability insurance, also known as income protection insurance, safeguards individuals from financial hardship if they become unable to work due to a disability or illness. It ensures that policyholders can maintain financial stability during challenging times by replacing a portion of their income. Here's a breakdown of its key features and benefits:
Income Replacement
Purpose: Provides regular benefits to replace a portion of lost income if the policyholder becomes disabled.
Benefit Amount: Typically, a percentage of the insured person's pre-disability income to maintain financial stability.
Various Types of Disability Coverage
Short-Term Disability (STD): Covers disabilities, with benefits lasting six months to five years.
Long-Term Disability (LTD): Provides extended coverage, often until recovery, retirement age, or a specified policy duration.
Accident Only: Provides coverage for accidents only. Typically less expensive than the combined accident and illness coverage. Any external accident causing injury is covered with accident only coverage.
Accident/Illness: Provides coverage for both accidents and illnesses.
Elimination Period
Definition: The waiting period before benefits begin.
Customization: Policyholders can choose elimination periods that suit their financial situation:
Shorter periods = Higher premiums.
Longer periods = Lower premiums.
Benefit Amount
Flexibility: Policyholders select the benefit amount, limited to a percentage of their pre-disability income.
Use: Helps cover essential expenses, such as rent/mortgage, utilities, and to maintain your current lifestyle.
Premiums
Factors Affecting Cost:
Age.
Occupation.
Health status.
Benefit amount.
Elimination period.
Exclusions
Examples:
Pre-existing conditions.
Disabilities caused by risky activities or self-inflicted injuries.
Renewability and Guaranteed Insurability
Renewability: Most policies are guaranteed renewable to age 65.
Tax Benefits
Tax-Free Benefits: Depending on the policy, benefits may be tax-free, enhancing financial security.
Disability insurance is often overlooked but remains one of the most crucial types of coverage. Here’s why:
Protect Your Most Valuable Asset: YOU and your ability to earn an income! Your income is essential for maintaining your lifestyle and supporting dependents.
Prevent Financial Setbacks: Loss of income due to disability can result in significant financial strain, potentially amounting to hundreds of thousands in missed earnings.
Ensure Financial Security: Provides peace of mind and resilience against unexpected challenges caused by illness or injury.
Disability insurance ensures your ability to maintain financial stability even if life takes an unexpected turn.
What is Health Insurance?
Health insurance helps reduce the cost of medical care. It works by requiring a monthly fee, known as a premium, in exchange for coverage.
Deductibles: Some plans require you to pay a certain amount out-of-pocket (the deductible) before the insurance kicks in.
Coverage Levels: After meeting the deductible, some plans cover 100% of costs, while others require coinsurance, where you pay a percentage of the costs.
Additional Benefits: Many health insurance plans offer extra programs and services at no cost, such as virtual healthcare.
Canada’s healthcare coverage is divided into three types:
Universal Healthcare (Provincial/Territorial):
Funded by taxpayers and covers most basic healthcare and medical services.
Coverage varies by province and territory, and a health card is typically required.
Workplace Benefits:
Offered by employers or associations to cover expenses not included in universal healthcare.
Includes coverage for prescription drugs, dental, vision, paramedical, and ambulance services.
Often more affordable than personal health insurance due to group cost-sharing.
Personal Health and Dental Insurance:
Designed for retirees, self-employed individuals, or those without access to group benefits.
Helps cover healthcare costs not covered by universal healthcare.
Plans can be customized to suit individual needs and budgets, with some offering guaranteed coverage for pre-existing conditions.
Universal Healthcare (Provincial/Territorial):
Family doctor visits.
Emergency room visits.
Inpatient care/surgery.
Diagnostic tests (bloodwork, scans, genetic testing).
Radiation therapy and chemotherapy administered in outpatient clinics.
Cancer support services (e.g., dietitian, counseling, physiotherapy).
Mental health services through cancer centers.
Workplace Benefits:
Prescription drugs.
Dental care.
Vision care and prescription eyewear.
Paramedical services (e.g., physiotherapy, chiropractic).
Ambulance services.
Personal Health and Dental Insurance:
Prescription drugs.
Dental and major dental care.
Vision care and prescription eyewear.
Paramedical services (e.g., physiotherapy, massage therapy, chiropractic).
Ambulance services.
Hearing aids and medical supplies.
In-home nursing and health aide care.
Emergency travel medical coverage.
Accidental death and dismemberment benefits.
Hospital accommodation and cash benefits.
Whether you need personal health insurance depends on your healthcare spending and risk tolerance for future expenses.
Consider Personal Insurance If:
You frequently incur healthcare costs not covered by provincial/territorial plans.
You have existing health concerns or anticipate significant future healthcare expenses.
Personal health insurance offers peace of mind by filling gaps in coverage, ensuring financial stability in the face of unexpected medical needs.
What Are Employee Benefits?
Employee benefits are group health insurance plans provided by employers to make healthcare more affordable and accessible for their employees. These benefits supplement employees’ salaries, addressing their health needs—basic or complex—while supporting work-life balance and preventative healthcare access.
For employers, offering benefits packages provides a competitive edge, helping to attract and retain top talent in the industry.
Employee retention is a significant concern in Canada. While benefits were once considered a job perk, the pandemic has elevated them to an essential requirement.
Competitive Advantage: Offering comprehensive benefits distinguishes businesses in the competitive job market.
Attracting Talent: Talented employees seek employers who provide more than high salaries—they value robust benefits.
Retention: Providing benefits demonstrates that businesses value and invest in employees’ well-being, fostering loyalty and reducing turnover.
Prescription Drug Coverage
Many plans cover prescription drugs, making medications more accessible and affordable. To qualify:
The drug must be prescribed by a medical professional.
It must be medically necessary.
It must have a Drug Identification Number (DIN) authorized by Health Canada.
Paramedical Coverage
Paramedical services aim to reduce stress, manage pain, and improve overall well-being. These include:
Physiotherapy and chiropractic care.
Massage therapy.
Naturopathy and dietetics.
Psychology and social work.
Dental Care
Dental insurance covers a range of oral health services, from routine check-ups to major procedures. Depending on the plan, coverage may include:
Basic Care: X-rays, cleanings, and ongoing maintenance.
Major Care: Crowns, dentures, and bridgework.
Orthodontics: Braces and retainers.
Vision Care
Vision benefits help maintain eye health with:
Routine eye exams.
Glasses or contact lenses.
Disability Benefits
Workplace plans may offer short-term disability (STD) and long-term disability (LTD) coverage, providing a portion of your salary if you cannot work due to illness or injury.
Life Insurance
Provides a lump-sum payment to beneficiaries in the event of the insured person’s death, helping cover funeral costs, debts, or loss of income.
Critical Illness Insurance
A lump-sum payment following the diagnosis of a covered life-altering condition to alleviate the financial burden of serious illness.
Accident Insurance
Covers catastrophic injuries or accidental death, offering financial support to beneficiaries or the insured.
Travel Emergency Medical Care
Some plans include medical coverage for emergencies while traveling, such as:
Medical evacuation.
Locating nearby doctors or hospitals.
Covering emergency medical expenses.
Health Care Spending Accounts
Provides flexible, tax-effective coverage for expenses not included in the primary health plan.
Optional Benefits
Employers may offer additional optional coverage such as:
Life insurance.
Accident insurance.
Critical illness coverage.
Some optional benefits can be retained even after leaving an employer, often at lower rates than individual plans.
Workplace Retirement and Savings Plans
In addition to health benefits, many employers provide retirement and savings plans, such as:
Pension plans with employer-matched contributions, pooling funds for investment.
Group RRSPs, TFSAs, RESPs, or DPSPs to encourage long-term savings.
Employee benefits are a cornerstone of competitive employee packages. They help employers:
Attract top talent.
Retain skilled employees.
Build strong employer branding.
By offering tailored benefits packages, businesses can create a positive work environment that prioritizes employee well-being and fosters long-term success.
A Health Care Spending Account (HCSA) is a flexible health and dental benefit feature that employers (plan sponsors) can include in their benefits plan or offer as a stand alone option. It operates as an additional financial tool to support employees with eligible medical expenses, complementing their traditional health and dental benefits.
Funding by the Plan Sponsor:
The plan sponsor determines an annual contribution amount for each employee’s HCSA.
Claims Submission:
Employees (plan members) submit claims for eligible medical expenses to be reimbursed from their HCSA.
Claims Processing:
The insurer processes claims based on the rules set by the plan sponsor.
Reimbursement:
Employees receive reimbursements until their HCSA balance is depleted or the funds are no longer available.
Topping Up Standard Benefits:
Employees can use HCSA funds to cover expenses not fully reimbursed by their standard benefits, such as:
Deductibles.
Dispensing fees.
Outstanding balances (e.g., covering the remaining 20% if a standard benefit covers 80% of an expense).
Extended Coverage Beyond Limits:
HCSAs can provide coverage for expenses exceeding standard plan maximums.
Example: If a standard plan has a $500 annual maximum for massage therapy, the HCSA may cover additional massage costs after the $500 is spent (depending on plan rules).
Coverage for Additional Expenses:
HCSA funds can cover medical expenses not included in provincial or standard insurance plans. Examples include:
Sight and hearing guide dog expenses.
Specialized equipment for individuals with disabilities.
Certain cosmetic surgeries.
Flexibility: Employees can decide how to use their HCSA funds to address their specific healthcare needs.
Customization: Plan sponsors can tailor the HCSA structure to fit their organization’s goals and employees’ requirements.
Complementary Coverage: Provides financial relief for out-of-pocket expenses, enhancing the overall benefits plan.
A Health Care Spending Account empowers employees to take control of their healthcare expenses while offering employers a flexible and attractive benefit solution.
The Role of Personal Health and Dental Insurance
Personal health and dental insurance in Canada provides essential coverage beyond the government’s universal healthcare system. These private plans fill gaps in public coverage, offering financial protection for:
Prescription drugs.
Dental care.
Vision care.
Paramedical services.
Many Canadians rely on such insurance to manage healthcare costs that are not covered by federal or provincial/territorial plans.
Personal health and dental insurance can be especially valuable for retirees who have not yet qualified for senior healthcare programs. It helps bridge the gap between employer-provided benefits and government senior benefits, ensuring continuous access to essential health services during this transitional period.
Dental insurance is vital for maintaining oral health for Canadians of all ages. Since most dental services are not covered by public healthcare, private dental plans make regular check-ups, cleanings, and necessary treatments more affordable.
Promotes Overall Health: Regular dental care contributes to better overall well-being.
Affordability: Private insurance reduces the out-of-pocket costs for dental procedures, such as crowns and fillings.
After years of enjoying workplace benefits, new retirees often face a coverage gap. Personal health and dental insurance allows them to maintain their well-being while transitioning to senior benefits.
Individuals without workplace benefits, including self-employed professionals, freelancers, and part-time workers, should consider personal insurance. These plans offer peace of mind and access to top-quality care, including:
Prescription medications.
Dental check-ups and procedures.
Vision care.
Paramedical services, such as physiotherapy and massage.
Personal insurance plans are customizable, offering a range of options from basic to comprehensive coverage.
Health care expenses can add up quickly. For example:
A single dental crown may cost upwards of $1,500.
Investing in personal insurance provides a safety net for unexpected health expenses, ensuring both financial and physical well-being.
Personal health and dental insurance is a smart investment for:
Retirees filling coverage gaps.
Individuals without employer benefits.
Anyone seeking comprehensive healthcare protection.
With personal insurance, you can enjoy peace of mind knowing you’re covered for life’s little—and big—health surprises.
Why Canadians Need Travel Insurance
When traveling to a tropical beach, cross-border shopping, or visiting family in another province or country, your provincial healthcare plan won’t fully accompany you. If you face a medical emergency away from home, you’ll be left to arrange and pay for care out of pocket.
Emergency Medical Insurance
Accidents and illnesses can happen anywhere. Emergency Medical Insurance provides coverage for:
Hospital and doctor fees.
Prescription medications.
Emergency transportation (e.g., air ambulance).
Other essential medical services.
Trip Cancellation & Trip Interruption Insurance
Life is unpredictable, and so is travel! These coverages protect you against unforeseen events:
Trip Cancellation Insurance:
Reimburses prepaid travel costs if your trip is canceled before departure due to:
Natural disasters.
Job loss.
Death of a family member or friend.
Trip Interruption Insurance:
Covers unexpected disruptions during your trip, reimbursing travel costs for events such as:
Medical emergencies.
Severe weather.
Unforeseen personal circumstances.
Trip Interruption Insurance Only
If you’re certain you won’t cancel your travel plans, this insurance provides peace of mind if something unexpected happens after you’ve already started your trip.
All-Inclusive Holiday Package
For comprehensive coverage, the All-Inclusive Holiday Package includes protection for:
Medical emergencies while traveling.
Missed flights.
Lost or damaged baggage.
Additional unexpected issues.
Accidental Death & Dismemberment: Financial support for serious injuries or death while traveling.
Non-Medical Package: Covers non-medical travel-related issues like cancellations or interruptions.
Sports & Activities Insurance: For adventurous travelers participating in higher-risk sports or activities.
Cancel for Any Reason Coverage: Flexibility to cancel your trip for any reason and receive reimbursement.
Baggage Insurance: Compensation for lost, damaged, or delayed baggage.
Rental Car Protection: Coverage for damages or theft of rental vehicles.
Travel insurance ensures that your adventures are stress-free by providing financial protection and support when the unexpected happens. Whether it’s a medical emergency or a last-minute change in plans, travel insurance offers peace of mind so you can focus on enjoying your trip.
Did you know that a participating whole life insurance policy can be an asset on your corporation's balance sheet? It's a strategic place for your retained earnings, allowing your capital to grow while still giving you access through policy loans or third-party lending. Where are your corporate retained earnings currently residing?
Whether you’re in an unincorporated partnership or a corporation, a buy-sell agreement funded by life insurance can protect your business from uncertainty. If one party passes away, the insurance ensures a smooth, worry-free buyout of their ownership stake, providing financial security and continuity for the surviving owners.
Split dollar or shared ownership critical illness coverage allows you to protect your business by covering key employees. In case of a serious illness, your corporation receives a tax-free benefit, ensuring you can hire a replacement and maintain business continuity. The key employee can share ownership by paying for the return of premium option, and if no claim is made, they personally receive all premiums back. Are you a key employee to your corporation? Does this strategy make sense?
Could you replace your income for the next 10-20 years if you couldn’t work? Most can’t. If you’re a key player in your business, how will it survive without you there every day? Protecting your greatest asset—your ability to earn that income—is often overlooked. Income protection can cover personal and business expenses, ensuring there's a business to return to when you’re ready if an injury or illness occurs.
Group insurance can be the key to retaining your top talent. Competitive benefits attract and keep great employees, who in turn, bring in more like-minded talent through positive referrals. Want to stay ahead of the competition? Consider adding investment options to your group plan to support both their health and retirement goals.
As an independent insurance broker, I simplify insurance to help you make informed decisions for your family or business.
I represent you, not an insurance company, providing unbiased guidance tailored to your unique needs. I offer flexible meeting options - whether in-person, virtual, or by phone - to fit your schedule. As a parent myself, I understand the importance of balancing personal and family time.
Evaluate your current situation and conduct a comprehensive needs analysis to determine the appropriate personal or business coverage for your unique requirements.
Engage in a discussion to identify your goals and expectations. Determine your priorities and outline what you aim to achieve with a tailored insurance plan.
Conduct a mutual evaluation to ensure we are a good fit as advisor and client. Confirm alignment and establish clear expectations for moving forward together.
Develop and review a customized insurance plan designed to address your current needs analysis. If required, we will schedule a follow-up meeting to ensure every detail aligns with your goals and requirements.
Experience a seamless policy application process. If approved, enjoy swift and hassle-free policy activation. If there are any ratings, exclusions or declines, we will work diligently to find the right policy tailored to your unique situation.
Once your insurance plan is in place, you can expect an annual meeting to review your plan. During this review, we’ll ensure that your coverage remains aligned with your needs and life circumstances. If any changes are necessary, we will make the appropriate adjustments to keep your plan up-to-date and effective.
I look forward to building a strong advisor-client relationship and assure you of my ongoing support and availability.
Questions? Feel free to call, text or email.
Trevor Perron
Independent Life Insurance Advisor
Serving Manitoba & Ontario
License #: LIA-50144 | AIA-50144 | 23218870
Cell: 204-232-6263
Email: info@mycircleconsulting.com
Calendar Link: https://calendar.app.google/wB7xxjgPwLrymd3h6
Social Media: @mycircleconsulting
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