Archive for the ‘Insurance Needs Analysis’ Category
Are You Relying 100% on Group Life Insurance?
Your employee benefits plan was never meant to be your only source of financial protection
Many people who have an employee benefits plan rely 100% on the group employee life insurance and forgo buying personal life insurance. Is this wise? Will a group life insurance benefit be enough for your family? For many Canadians who have never completed a full financial needs analysis, and are ignorant about their real risk exposure, they think this is enough life insurance.
Well, it does sound like a lot. Most group life insurance plans offer about 2 times your gross salary in the form of a life insurance benefit. If you are earning $80,000 per year, this is a $160,000 life insurance policy. Let’s assume that is all a person has for life insurance when they pass on. Their family would lose all their future earning potential plus have to pay the bills and make ends meet. Even if we factored taxes and other payroll deduction into the picture (minus 25%), and discounted the amount of money required by surviving family at 25% because the one parent/spouse is gone, this still leaves an annual income need of $40,000. With $160,000 of capital, spending $40,000 per year, the family will be out of money in 4 short years. Then What!
Factoring group life insurance into your life insurance plan
The fact that you have group employee life insurance is a good thing. Having it should not be dismissed. When completing a full life insurance needs analysis, you should include the amount of life insurance you have through your group plan into the calculations. This will reduce your need to buy such a large personal life insurance policy.
You will be surprise, however, at how much life insurance a person actually needs. I’m not going to go into all the details of a life insurance needs calculation, as it is always specific to each person’s/family’s unique situation. I will tell you that on average, using a rough rule of thumb, the average person needs 8 – 10 times their gross annual income in life insurance to properly protect their family and loved ones. A life insurance company will readily offer Canadians 20 – 25 times their gross annual income in total life insurance protection, so long as they can afford the premiums, as this amount is reasonably justified in the eyes of an insurance company.
If all you have is 2 times your gross annual earnings in group life insurance, you are drastically under-insured.
Your group life insurance policy is only good while you’re an employee
Another thing to realize is that group life insurance, provided as an employee benefit, is only good while you are an active employee. The moment you retire or terminate your employment, this coverage stops and you have nothing. Far too often I am trying to help people who have taken retirement and are now without any life insurance. They have become accustomed to having financial protection, and feel naked without it. Very often they still have debts and financial obligations that need to be insured.
It can be very difficult and expensive for an older person to qualify for life insurance. The older you are, the greater the chances of having a health condition that would make getting life insurance difficult. Also, premiums rise each year so that by the time you’re 65 it is no longer a cheap proposition to buy life insurance.
Taking control of your personal and family risk management when you are younger, earning an income and still in good health is the best time to buy life insurance. Contact Life Guard Insurance today for a free, no-obligation life insurance quote and a free life insurance needs analysis and report. We would love to help you get the right amount of life insurance you need, take control of your insurance plans, and design a plan that is affordable.
Almost Half of Canadians Have No Life Insurance Plan
There is a huge RISK GAP in the Canadian economy
True – we live in one of the best countries in the world. We have wealth, strong government and a social system that usually catches people when they fall. All this is great. So why, in a country where almost everyone can find a good job and provide an adequate income for their family, do so many people liver without proper life insurance coverage?
I think it isn’t because all those people hate insurance companies (some do – they really do) or distrust financial institutions. It isn’t because people can’t afford life insurance, with the price for term life insurance now at historic lows. It isn’t because all those people are financially secure and self insured, because we know that most Canadians don’t even have enough money for retirement, let alone an foreseen death of a family income earner.
Do you want to hear a shocking number? OK – I’ll tell you. The amount of life insurance that is missing from an optimal level of coverage across the Canadian economy is about $3,150,000,000,000! That’s over 3 Trillion dollars of life insurance coverage that is missing from the Canadian population. This is based on an average amount of $250,00 of personal life insurance for each adult that presently has no coverage (over 12 million of them). Even $250,000 each is still not enough life insurance to protect a family indefinitely, but it certainly is a good start.
Are You Walking Around Without Life Insurance?
Almost half of all Canadians do not own a personal life insurance plan. Most of these people have debts, children, and incomes to protect that their family relies upon to make ends meet. Why aren’t they properly insured? I’ll give you my top 5 reasons why so many Canadians are without life insurance:
1. They have never been asked.
This is such a common situation, where individuals and families have never been approached by a life insurance agent and asked whether or not they would like to sit down and discuss their life insurance needs.
2. They think it’s too expensive.
Most people are totally unaware of the cost of life insurance. For parents who are around 40 years old or younger the cost for life insurance to protect their children, their debts and sustain a long-term income for the family is very, very affordable. Much cheaper than most people think.
3. They have heard horror stories about life insurance salespeople.
That old image of the door-to-door life insurance salesman shoving his foot in the door and not taking no for an answer is still with us today. Maybe it was a persons parents who put the notion of “evil” life insurance agents into their heads, but there it sticks. And often people with this kind of bias have never even met a modern life insurance agent today.
4. It just isn’t a priority.
We are all busy, and taking an evening out of your busy schedule to meet with a life insurance advisor seems as exciting as watching grass grow at a graveyard. It might be something a person is meaning to do, but never gets around to. Unfortunately many people who are suddenly dealing with a health condition rush to buy life insurance, only to find it is now too late to get the policy.
5. They think they are covered through their work insurance.
Many people without a personal life insurance policy have some coverage through work – their group life insurance policy. The most common amount of life insurance under this kind of plan is about 2 times one’s gross annual income. Even though that is nice to have, it doesn’t even come close to protecting your family from all debts, replacing lost income for the long-term, sending children to college/university, etc. Relying on group life insurance leaves families woefully under-insured.
Get a Free, No-Obligation Insurance Needs Analysis
If you are concerned you and your family might be lacking proper life insurance coverage, or you’re one of the 45% with no personal life insurance plan, then please contact Life Guard Insurance. We will be sure to provide you with a detailed life insurance needs analysis to determine exactly how much life insurance you need. We will then find you the most competitively price life insurance policies in Canada to meet your needs. Talk to us today.
Life Insurance Is A Financial Product Families Must Own
You might not have a burning desire to spend money on life insurance, but can you imagine what would happen without it?
Buying a life insurance policy can seem like a chore, an expense, and something that many Canadians wish they could avoid. In fact, when you own life insurance you are making a “bet” that you actually hope to lose. The bet is that you will die. The small amount of money you put down on the bet is your premium. If you actually do die, the insurance company covers your bet at hundreds or thousands to 1 on your premium. Not a bad bet, but the catch is you have to die for the bet to be paid off. Not the ideal way to win a bet.
So, most people tend to avoid thinking about their own death, and often avoid buying life insurance because of the negative connotations around the product. But there is another way of looking at life insurance – as a financial planning tool. It is a protection product to fulfil financial obligations and replace lost income if a parent, spouse, caregiver, etc. dies and there are people left behind who depended on that person. Leaving your loved ones without your income, unpaid debts, and bills is not what people want. In fact, this is the real scenario they are trying to mental avoid thinking about. The pain, hurt and financial hardship that comes along with losing a loved one and provider is what people really worry about.
Life insurance is supposed to remove the financial worry from the picture. God forbid you did die prematurely, and left your family without your love and guidance. At least you would leave them with your financial support. If you owned life insurance your income could be replaced and your debts could all be paid off, so your surviving family would be secure moving into the future. Without proper coverage, the devastating situation is compounded by a lack of money and a loss of the standard of living the family was accustomed to.
Life Insurance is more than covering your debts
Life insurance is more than just covering your debts. Debts, like your mortgage (by the way, never buy the bank’s mortgage insurance policy – it’s terrible), are often very large and seem like the biggest financial burden in your life. If you own a home in a major Canadian city, and are paying a $400,000 mortgage or more, you might think this is the #1 financial risk you need to insure.
I’ll admit, the mortgage is very important, and usually is #2 in the pecking order of financial risk needs, but it is not #1. The most important asset you own, which would be lost if you died, is your ability to work and earn an income. If you are earning $65,000 a year today, and you’re 35 years old, you will earn $1,950,000 over the next 30 years PLUS raises. That is a lot of money which is needed to provide the standard of living your family is accustomed to. Life insurance is about providing for the life of your survivors, not just about eliminating debt.
Large amounts of capital are required to provide long-term income replacement
If you have to replace an income of $65,000 plus inflationary increases for the next 20 years, and you assumed an annual growth rate of 3% after inflation, you would need over $660,000 in gross capital (this assumes government programs like CPP Orphan and Spousal Benefits are also paid). This would allow your family to invest the money, and withdraw what they need for the next 20 years and retain their current standard of living. Without enough life insurance the family will run out of money sooner than they want and will be forced to make difficult choices, like a stay home Mom going back to work, selling the family home and downsizing, etc.
Term Life Insurance can usually be purchased fairly cheaply
If you are a young family, with kids and piles of debt, then term life insurance is probably your best solution. You can offset your total risks for a very low and affordable premium. In fact term life insurance premiums have never been as affordable as they are today. Many people can even save money by reapplying for a new term life insurance policy now, and trading in an older more expensive policy. You would be surprised at how affordable term life insurance is, and it will protect your family over the high risk years when you need lots of life insurance protection – the years when you’re paying off your mortgage and raising children.
Don’t let your family become a tragic news story
One of the most tragic things I hear on the news is a story of a parent or parents dying in a car or workplace accident and being survived by their children. I’m a realist and know that people die every day, leaving loved ones behind. The tragic part of these stories is the plea being put out on public TV or radio asking for donations for the family to help them cope. The news only covers these stories when families are in dire financial need and could lose everything because a breadwinner has died, and children are left behind with no money for even the basic necessities. Don’t become a tragic statistic like this. Be prepared for the worst, with a low cost term life insurance policy to protect your family.
Get qualified advice from a Life Guard Insurance Broker
At Life Guard Insurance we have licensed and professional life insurance brokers across Canada ready to serve you. Contact us today and we will connect you with a broker who can analyze your needs and make sure you have enough life insurance protection in place for your family’s future.
The article was written by +Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about why family’s need life insurance would be very much appreciated.
The Security Needs Analysis Plan – Estate Tool
Advanced software for life insurance needs analysis
This article is part of The Most Advanced Insurance Analysis Tools in Canada series.
The last article in our series about advanced insurance planning tools in Canada is maybe the most fundamental and most used piece of software in the entire suite of tool. This is traditionally called a life insurance needs analysis calculator, but in the PPI Solutions Toolkit it is named the Security Needs Analysis Plan (SNAP). The SNAP report that is generated is a detailed and comprehensive report identifying exactly how much life insurance you need at present to protect your family and loved ones.
We have generated an example report with a fictitious client named John Smith. Please feel free to download the PDF report by clicking on the image of the report cover page to the right.
Let’s take a minute to paint a picture of John Smith and his typical Canadian family case study. John is 38 years old and works as a middle manager in a national grocery store chain. He makes $85,000 per year gross income. His wife, Jane, works part time and taking contract jobs at the local university and makes $35,000 per year. They have two children, Jennifer who is 9 and James who is 6. Let’s take a look at how the software analyzes John’s needs for life insurance to protect his family.
Note – the software generates separate reports for husband and wife. We are focusing on John’s SNAP report because he is the majority income earner and will need more life insurance protection.
Most advanced software for life insurance needs analysis
The SNAP report generates a detail life insurance needs analysis for clients. There are three sections to the analysis that are calculated:
- Family needs at death
- Existing assets and life insurance
- Income replacement
Each of these three parts of the analysis will be described below. It is the job of your life insurance broker to help you step through the software to put in accurate numbers for your family, so that you get a meaningful calculation at the end. The amount of life insurance you would need might surprise you (usually higher than people expect) in order to secure the financial future of your family.
The purpose of life insurance for younger families is to make sure that the survivors can continue to pay all bills and maintain their standard of living by replacing the lost income of the deceased and paying off all major debts. The SNAP report does also take into account certain government programs, like Canada Pension Plan (CPP) survivor and orphan benefits, CPP death benefits ($2,500 dollars) and inflation and interest rate estimates to give an accurate report of your need for life insurance.
Family needs at death
The amount of financial protection the family will need immediately upon the death of a parent and income earner is the first section of the analysis. This section examines immediate costs associated with the passing of a financial provider to the family. It looks at important costs like funeral and final expenses, legal and executor fees, paying off outstanding loans, repaying the mortgage, balancing the emergency fund, setting aside money for children’s education, paying off credit cards, and any other expenses that would come due within the next 3-6 months following a death in the family.
For John Smith, here are the expenses he wants to account for:
- Final expenses – $12,500
- Legal and executor fees – $5,000
- Pay off outstanding loans (car and line of credit) – $35,000
- Repay the mortgage – $225,000
- Set aside money for an emergency fund for Jane – $30,000
- Education funding top-up – $40,000
- Pay off credit card debt – $10,000
- TOTAL = $357,500
If John were to pass away today, the family would need $357,500 to pay off all debts, pay for final expenses and make sure the family had certain plans in place, like education funding.
Existing assets and life insurance
If family needs at death adds to the amount of life insurance a client needs, existing assets and life insurance is a credit to their existing plan. Existing assets and life insurance looks at what you have, in either cash savings, assets that can be liquidated, and life insurance that can be claimed if a person was to die. All these existing assets would reduce your need for life insurance. If a person has done a good job of analyzing their life insurance needs already, then this section should have enough assets and life insurance protection to offset all liabilities.
In our example client, John Smith, he does have some significant assets at present to protect the family. John and Jane feel like they have a lot of life insurance protection with the $250,000 they have secured through John’s employer. They declined the mortgage life insurance protection from their bank. Here is how much money they presently have available should John pass away unexpectedly:
- CPP Death Benefit – $2,500
- Cash on hand for emergencies – $15,000
- Life Insurance – $250,000
- Sell one car – $7,500
- TOTAL = $275,000
So, John has $275,000 of available assets and cash should he pass away. Based on his immediate family needs of $357,500, he is still $82,500 short. Just to cover the immediate expenses he would have to get almost $100,000 of life insurance as a top-up. But we haven’t even considered income replacement yet.
Income replacement calculation
Income replacement is the biggest ticket item for most peoples’ life insurance needs analysis. This is where a fund is established with enough capital in it that the surviving family can draw income from the fund, for a certain number of years, to make sure the lifestyle that the family is accustomed remains intact.
Your most valuable asset is your ability to work and earn an income. It is worth much more over the course of your life than the value of your house. Yes, most of the money you earn gets spent on basic living expenses, and you don’t have anything tangible and valuable to show for it. But without the income flowing in each month the family is left with nothing, and has to sell assets and go on social assistance just to survive. No one wants this for their family. Unfortunately many people just don’t think about income as a major asset that needs to be protected. They make sure the mortgage is paid off with life insurance. Unfortunately your family can’t eat the house, so they might be forced to sell the house you so diligently insured just to make ends meet each month.
For our client, John, we are assuming the family will need to maintain 75% of the combined income while the children are young and dependent. Once the children have grown up and left the house, John would like to maintain 60% of the combined family income for his wife Jane. Here is what the family’s cash flow or income needs look like if John were to pass away:
John has to make sure that there is an extra $42,794 per year available for the family to spend while the kids are young. After they have grown and left the house if he wants to provide for Jane, he will have to add an additional $30,185 per year. Many people completing this analysis are more concerned about paying for expenses while the kids are young and dependent. There is a very good assumption that once the kids grow up and leave the house, the lower income earning spouse will be able to return to more full-time work and earn enough to make up such a loss.
Outcome – 4 alternatives for your life insurance needs analysis
The final outcome of the analysis looks at 4 different scenarios for total life insurance needs. The life insurance needs, including income replacement, are broken down as follows:
- Until youngest child is age 18
- Until youngest child is age 25 (finishing college/university)
- Until surviving spouse is age 65
- For the rest of your spouse’s life
The two most reasonable options for people seem to be total life insurance needs until the youngest child is age 25 or until the surviving spouse has reached retirement age. Most parents today don’t want to kick their kids out at age 18. Even though this is the age of majority, most young adults are not yet financially independent. After they finish college or university and get their first real job they can be considered “on their own”. Also, some people want to make sure their income continues to flow for the surviving spouse until he/she is at retirement age. It is the job of the survivor to save for retirement with RRSPs and other savings vehicles. They will have more than enough money to do so because income and lifestyle insurance protection is in place, allowing them to continue contributing to their retirement savings plans.
Here is the final life insurance needs analysis for John Smith
John decides to put enough protection in place until his youngest child (James) is age 25. That is in about 19 years from now. He purchases a Term 20 life insurance policy for $750,000 (using round numbers). He can get a policy for between $70 – $75 per month, depending on the insurance company he goes with, and the premium will be locked for the next 20 years.
You should have a Security Needs Analysis done so you have the right amount of life insurance
If you have never had a Security Needs Analysis Plan done (or a detailed life insurance needs analysis) you really need to do so to make sure your family’s financial future is protected. We can connect you with a network of life insurance brokers across Canada who can provide you with a detailed SNAP report so you know you have enough life insurance in place. Contact us today for a free, no obligation meeting with a broker near you.
The article was written by +Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about your life insurance needs analysis would be very much appreciated.
Analyzing Your Income Replacement Needs with Advanced Software
Disability insurance and income replacement needs analyzed in great detail
This article is part of The Most Advanced Insurance Analysis Tools in Canada series.
When it comes to determining how much income replacement insurance you will need, the answer isn’t that simple. Should you replace as much income as you can, or would you be able to live on a smaller amount each month? How much can you afford in premiums to guarantee your income? Should you be insuring income replacement for your entire working career, or for only 2 to 5 years off work?
Disability insurance (your income replacement insurance policy) is difficult to design because there are so many options and variables. The benefit is that an experience life insurance broker can help you construct a disability policy that meets your specific needs and your monthly budget.
Our brokers at Life Guard Insurance have access to the most advanced analysis and reporting software in Canada. The software applet, called Income Replacement, will give you a detailed and customized report on the amount of disability insurance you will need to maintain your current standard of living based on monthly expenses. It can factor in current income replacement sources, like CPP, group disability insurance, spouse’s income and other personal disability insurance plans you might have.
The report also educates clients about the need for income protection insurance and the financial risks Canadians face from loss of work due to injury or sickness. The rest of this article will highlight many of the topics covered in the report, and even go through an example case analysis for a fictitious client, looking at the amount of disability insurance she would need.
If you would like to read an example Income Replacement report, please click on the image of the report cover page on the right.
Your risk of disability
Medical technology is helping Canadians survive serious life illnesses and major injuries. The number of deaths due to things like cancer, heart attack, stroke, etc. has gone down dramatically in the last 20 years. In contrast, the number of people reporting they have been disabled has increased by over 20% between 2001 and 2006. In 2006 there were 4.4 million Canadians who reported being disabled.
15% of Canadian adults report some form of disability at present– 3.4 million people. The following chart shows the percentage of Canadians living with a disability in different age groups.
The risks you might have a period of long-term disability sometime in your working career is almost 1 in 2. If your disability lasts for more than 90 days, the average time off work is 2.9 years! That is a long time to be without income. Are you prepared to replace income for 6 months, 12 months, 2 years or more? If you have some disability insurance through your work, do you really know how it works and how to claim your benefits? With the risk being almost 50% you will use the insurance policy sometime in your career, you should really know what you have.
Potential income loss over time
If I asked you what your most valuable asset is, what would your answer be? Your house. Actually, the most valuable thing you have is your ability to work and earn an income. You are an asset to yourself, being able to go to work each day and make money to support yourself and your family. Many people in Canada take their health and ability to work for granted, until they lose it.
So, what is your “work” really worth? How much income would you lose if you couldn’t work any longer? Here is a graph with examples of ages and income levels, and the long-term income loss if you became disabled.
Your Earning Potential
Real Canadian claims for disability insurance
The report for download gives examples from Canada’s three largest disability insurance providers, Canada Life, Manulife Financial and RBC Insurance. I will highlight the claims stats from just one of these companies in this article, but you can see the other two if you download the PDF report above.
A look at Manulife’s disability insurance claims (02/2008).
|Current Age||Percentage of Policy Holders||Percentage of Claimants|
|Occupation||Date Disabled||Cause of Claim||Age When Diagnosed||Claim Paid to Date*|
|Doctor||1989||Chronic Pain, Depression||34||$1,458,884|
|Bricklayer||2001||Carpal Tunnel syndrome||48||$97,610|
|Business Owner||2002||Car Accident||43||$121,320|
|Dentist||2003||Herniated Cervical Disc||55||$634,088|
|Podiatrist||2004||Essential Tremor (hands)||59||$381,358|
How would you replace income during a period of disability?
Owning disability insurance is not your only choice when planning income replacement during a period of disability. Let’s take a look at the other options you would have to generate income during a period of disability.
- If you saved 5% of your income each year, 6 months of total disability would wipe out 10 years of savings.
- What bank would lend to a person who is too sick or unable to work due to disability?
- Can you pay all the bills and survive financially on one income?
- Does your spouse have disability insurance to protect his/her income?
- Will you get a fair market price when you are forced to sell?
Paying with Cash
- It takes time to create enough capital. There are also taxes and investment risks to consider.
Individual Disability Insurance Plan
- The solution – a secure source of money you can count on during a period of disability – when you really need financial support.
Income replacement analysis
Let us take a look at an example analysis. Our client’s name is Jane Smith. She is a business consultant, self-employed, earning about $120,000 per year. She is the major income earner in her home. Her husband is a freelance writer, making $45,000. Since he works from home he does most of the childcare duties when Jane is away on business. They still pay for a day-home for their youngest child so Mr. Smith can get some work done during the day.
Here is a breakdown of their monthly expenses:
- Mortgage: $1,800
- Utilities and Household Expenses: $650
- Groceries and Household Supplies: $1,000
- Car Payments, Gas & Maintenance: $650
- Loans and Credit Cards: $500
- Insurance Premiums: $350
- Childcare: $750
- Savings and Investments: $700
- Other Monthly Expenses: $500
- Total Monthly Expenses: $6,900
This works out to basic expenses of $82,800 per year. These are after tax costs, and Mr. Smith only makes $45,000 gross income before tax. Jane Smith has no other form of income replacement besides dipping into the family’s savings. To maintain the family’s current standard of living and pay all the bills, Jane would need a disability insurance policy of about $3,500 per month in tax free income to replace her lost income.
If Jane Smith is 40 years old, in good health and a non smoker, she could buy a top of the line disability insurance policy for around $175 per month, providing $3,500 of monthly benefit if she was to become disabled. This is only 1.75% of her gross annual income in order to protect herself and her family’s standard of living. A really worthwhile investment!
Speak with a broker who specializes in income replacement and disability insurance needs
If you would like to speak with an insurance broker who specializes in disability insurance, please contact us. Our life insurance brokers across Canada can provide you with an income replacement analysis to make sure you have enough disability insurance in place to protect yourself, your family and your standard of living should you ever be faced with a period of disability.
The article was written by +Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about Income Replacement Analysis and Planning Software would be very much appreciated.
Should I Buy Insurance | Infographic Flow Chart
Easy and fun answers to whether or not you should buy insurance
This fun infographic flow chart, developed by Mint.com, answers the question “Should I Buy Insurance?” It is a fund and easy visual guide to answering that question.
In Canada (this infographic was developed in the USA) you can buy slightly different types of insurance than in the US. Particularly the health insurance section is different in Canada. Because of universal health care, the high costs for health insurance are are dramatically lower in Canada. Our primary care network (hospital, family doctor, specialist, nursing, etc.) is all covered by our provincial health care system. It is the extra medical services, like ambulance rides, medical equipment, physiotherapy, massage, etc. that are not covered. Also prescription drugs and dental care is not covered by your provincial health care system. That is the main type of health insurance Canadians are buying or recceiving through their employer sponsored group insurance.
Other types of health insurance include critical illness insurance, for tax free cash when faced with a life altering illness or injury, and long term care insurance, to supplement the high cost of care as Canadians age.
I hope you enjoy this visual guide, and answer the question “Should I Buy Insurance?”
Should I Buy Insurance Visual Guide
The infographic was produced by Mint.com posted by +Mitch Reynolds. If you found it interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this infographic about Should I Buy Insurance? would be very much appreciated.
Dads Put in The Work to Provide and Protect Their Families
Dads don’t need Father’s Day to be the foundation for their families
Another Father’s Day has come and gone, and it always amazes me how differently it is celebrated compared to Mother’s Day. We actually celebrated Father’s Day on Saturday this year (because my wife and kids travelled overseas on Sunday). I got a hand painted plate and a lantern made out of a tin-can, hand drawn cards and a picture of the two boys. I cooked breakfast – pancakes. I BBQ’ed supper. That was it.
My real Father’s Day, Sunday, was the true test of what it means to be a father. This was one of the hardest days, emotionally, I have ever had to deal with. My wife and two sons left on holidays for 6 weeks. I’m staying home to work on the business and make money so they can go on such trips and see extended family. My wife is from Europe and has not been over there for 5 years. Our youngest son who is not yet 2 has never met the family in the home country. This was an important trip for her, and I couldn’t go.
Saying goodbye in the airport, knowing that my wife was about to have a very challenging time with her two sons, stuck on an aircraft for 10 hours without me there to help was agonizing. I watched them for 15 minutes struggling through security with bags, stroller, kids running everywhere. I wanted to go over and bring some order to the situation and help her get control, but I couldn’t. I was helpless when I wanted to be a Dad.
When did this happen? When did I become such a family man? Like so many men out there, you don’t understand how much having a family will change you. How you will come to define yourself by being the father of your family unit. The challenges, successes and failures of your children somehow are more important than your own. No one ever told me that I would have my selfish nature stripped away from me piece by piece, as my kids and wife seem to need more and more of my time, attention and energy. I never knew it was possible to care more for my family than I do for myself.
That is the nature of being a father. It is a sacrificial job. We don’t get the adoration that Moms’ get, for being loving, caring and recognized for all they do for the family (and they do a lot – not knocking Moms). Dads just get on with everything that needs to get done – no complaints, no attention, and no glory. Over beers with friends we grumble about how our wives keep loading us up with chores and to-do lists that never end. But guess what – we do everything on the list. And usually so fast that we still have time to watch the hockey game that evening.
We Dads don’t need a special day like Father’s Day to make us feel good. Yes, it’s nice to get a little extra attention, but we would still be great Dads without a special day. We know what our job is – to love, protect and provide for our families. We don’t need a day to make us feel special. All Dads feel loved, special and fulfilled when they are wrestling and horsing around with their kids; when they get an adoring look from their wife after finishing her to-do list; when getting a good night hug after reading their kids a bedtime story. From time to time, just cook us a steak, get us a beer and say, “Thanks for being a super Dad.”
What does this have to do with Life Insurance?
That was my way of acknowledging all that Dads in Canada do for their kids and their wife. Dads are always giving to their family. They key word is ALWAYS. Every Dad I’ve ever met as an insurance broker wants to make sure their family is well provided for, their kids can go to college/university, and their wife won’t be forced back to work suddenly for lack of money.
Most Dads in Canada do have some life insurance to protect their wife and children. Very often, Dads don’t have enough life insurance because they rely only on their group insurance coverage at work. A smaller percentage doesn’t have any coverage. This isn’t because Dads don’t care enough – it’s because they have never been given a proper chance to buy the insurance they need. They have never sat down with a life insurance broker, done a financial needs analysis, and been presented with life and health insurance options that fit within their budget.
If you’re a Dad and you haven’t gotten around to doing proper life and health insurance planning to protect your family, now is the time. If you don’t have a qualified insurance broker to speak with, contact us at Life Guard Insurance. We can connect you with a professional insurance broker across Canada who can analyze the right amount of insurance, the right type of insurance and fit the whole plan into your budget.
The article was written by +Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about Dads providing and protecting their families would be very much appreciated.
Life Guard Insurance’s Brokers Have The Most Advanced Insurance Software in Canada
The PPI Toolkit is Canada’s Leader in Insurance Software for Brokers
For the next couple of weeks we are going to take a closer look at the advanced analysis, planning and reporting software that all Life Guard Insurance affiliated brokers have access to. All independent life insurance brokers who are affiliated with Life Guard Insurance are also contracted with PPI Solutions; Canada’s largest national MGA (Managing General Agency). PPI Solutions provides all of its brokers with state of the art insurance software and training to use the tools to better serve their clients. This software is called the PPI Solutions Toolkit, and is the most advanced set of analysis tools and software available to independent brokers in Canada.
This overview article will link to more detailed articles describing each analysis, presentation and planning tool our brokers can use to help them build the perfect life and health insurance plan for you.
Broker Analysis Applications for Specific Client Reports
The first set of tools is called the Product Applets. These applets help brokers’ input specific life and health insurance products and their premiums into a more detailed analysis. The applet then produces a report for the client (you) that is truly customized to your specific needs and the insurance policies you are considering. Each report focuses on a specific life insurance planning concept or a comparative analysis.
The Benefits of Joint Last-to-Die applet outlines the key features of Joint Last-to-Die products. It highlights the pricing advantage offered with Joint Last-to-Die and illustrates the planning opportunities available to help meet your clients’ needs.
The Creating an Estate Bond applet illustrates the comparison between a conventional investment vehicle, such as a GIC, and a permanent insurance product. It highlights the key features of the estate bond concept with a detailed cash flow analysis and describes the features and advantages associated with an insurance product.
The Insured Annuity applet identifies the fear of outliving investments during retirement and illustrates the classic GIC income strategy where the retiree may outlive their savings due to capital withdrawal. That situation is compared to an insured annuity strategy that preserves capital within a life annuity while also providing a life insurance benefit for the insured’s beneficiary.
The Life Insurance Funding Options (LIFO) applet describes the two main categories of insurance: temporary, including Term 10 and Term 20, and permanent, including Term to 100 and Universal Life. The advantages of permanent insurance are identified and a detailed cash flow analysis is given comparing the four products.
This applet reviews traditional solutions used to fund capital requirements at the time of death of a family member who is the primary income earner. The applet compares liquidation, borrowing, and saving and then illustrates how Life Insurance is the most certain and financially efficient strategy.
The Cost of Waiting applet was designed to compare the cost of permanent insurance today and the high cost of waiting to convert. It highlights the term renewal rates and the future permanent life insurance premiums in a detailed cash flow analysis report on a 10-, 20-, or 30-year basis.
Concept Presentation and Educational Software
The Concept Presentation applications can generate personalized reports for clients’ information and education. These reports or presentations cover some of the most important topics that are harder to educate clients about. The report backs up the life insurance broker’s advice and leaves a reference document that clients can go back to and recall the reasons behind the insurance decisions they made.
The Benefits of Permanent Insurance presentation reviews the many beneficial tax and estate planning opportunities available to Canadians through permanent insurance including: a strategy for tax deferred savings plan, estate enhancement, an insured retirement program, estate equalization, funding for capital gains liabilities and planned charitable gifting.
The Bridging Risk presentation outlines five major risks in life and compares the probability of each event occurring. The risks addressed are the chance of experiencing a house fire, a catastrophic car crash, death before 70 of an individual age 40, loss of ability to perform your own or any occupation or a critical illness. The probability comparison shows how important it is to have insurance coverage for critical illness.
A Private Health Services Plan (PHSP) allows you to expense your medical and dental costs (for you and your employees) through your company. This is a simple, cost-effective way to allow today’s Canadian business owners to provide flexible health care benefits to their employees with huge tax savings.
Business owners looking for an effective and affordable health care benefit plan can stop their search here. CustomCare’s Private Health Services Plan (PHSP) allows you to expense your medical and dental costs (for you and your employees) through your company.
The Value of a Segregated Fund presentation is an introduction to the benefits offered with Segregated Fund products. It highlights key features exclusive to Segregated Funds and illustrates a detailed comparison of both the Segregated Fund and Mutual Fund contracts.
This presentation is a comprehensive summary of the purpose and characteristics of temporary and permanent life insurance. The benefits of Universal Life insurance are reviewed in-depth and illustrative graphs are provided to help with understanding the differences.
Insurance Planning Tools Software
The Planning Tools provided in the PPI Solutions Toolkit provide individual, customized analyses of a client’s unique financial situation. They help clients understand exactly how much insurance is required to offset their personal income and life risks.
The Income Replacement applet is a comprehensive sales tool used to help illustrate the key benefits and features of today’s income replacement products. It offers a simplified disability income needs analysis to help illustrate your clients’ current financial position and their potential disability income gap.
The Security Needs Analysis Plan (SNAP) is a tool for analyzing the financial needs of your client by collecting details on their income, the family needs for cash and for income at death of the primary income earner, the family sources for cash and income at that time and the resulting insurance requirements to cover any shortfall. SNAP illustrates the figures in easy-to-view graphs. A Fact Finder form is provided for collecting information while meeting with your client.
Connect with a life insurance broker who can analyze your unique situation
If you are looking for a life insurance broker who has access to the most advanced insurance software in Canada, and the training to use it, contact us today. We will connect you with a life insurance broker in Canada who can help you understand the right type of insurance and the right amount of coverage for your unique circumstances.
The article was written by +Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about Canada’s most advance insurance software would be very much appreciated.
What is the Value of Mom in Canada, 2012?
The Real Value of Mom if she were paid for all she does
I know you might all be thinking that this article about Mom’s is a day too late – that Mother’s Day was yesterday. true, but I was too busy spending time with my wife, the mother of my children, and my Mom to take even a brief moment to write something. Plus, I usually don’t work on Sundays, so better late than never, I say.
I did pick up one valuable tidbit of information yesterday, and that was the annual What’s A Mom Worth survey from Salary.com. Each year, Salary.com surveys thousands of women across North America to find out how much time they spend on household chores, raising children, extra curricular activities, etc. Then they put a price tag to this unpaid work to see what a Mom is worth if she were paid for all that hard work. I was shocked to find out that Mom’s are typically worth more for their efforts than the average salary of a full-time employee in Canada. Plus, the additional unpaid work that a working Mom does around the house, after she has given her 40 plus hours per week to some company for a paycheck, is still worth over $60,000 per year. Wow!
Here are two infographics from Salary.com about their survey results and value of a Mom for all the upaid work she does:
Mom’s Value is the Insurable Interest to the Family
Since this is a website dedicated to life and health insurance in Canada, we better tie this article about the value of Mom back to insurance.
So, the question is what does your family do if Mom become so sick she can’t do all these things to keep the family running, or if she dies early in life? Would Dad be able to pick up the slack, and afford childcare and household cleaning services with his current salary?
Unfortunately many Canadian families do not really appreciate the real value of Mom, and how much it would cost to replace her. I previously wrote an article called Stay Home Moms Put Families at Risk Without Life Insurance. I was trying to show how the unpaid work done by Moms’ in Canada is something that can’t easily be replaced, and families need to be protected in case Mom is no longer there to care for them.
This survey by Salary.com put some real data behind my previous article. Moms in Canada do so much for their families, without asking much in return. I know my wife is exhausted after every day of work, trying to keep up with two young boys, look after me and putting a lovely home cooked meal on the table everyday. Does my wife have life insurance? You better believe it. God forbid anything might happen to her, but if I was left alone with two young boys and a business to run I would not be able to cope. I would need fulltime help in the home to keep up with the chores, childcare and keep everyone sane.
Critical Illness Insurance is Moms Living Benefit Insurance
We all know that life insurance is very important, but we should also pay close attention to her need for major health insurance. Stay home moms can’t get disability insurance because they aren’t paid for the work they do. Only jobs that pay an income or create revenue from active work qualify for disability insurance (income protection insurance). There is an insurance policy that will provide Mom protection from major life altering illnesses and injuries, like cancer, heart disease, stroke, MS, Parklinsons, paralysis, etc. It’s called Critical Illness Insurance and can be a very affordable addition to your insurance portfolio.
If Mom became terribly ill and needed care herself, your family is left is an even more desperate financial situation. Again there is need for help to come into the home for childcare and cleaning. On top of that Mom is going to need medical care and support that will add additional expenses to the household budget. Plus, Dad might want to take time off work to be at her bedside, caring and supporting his wife through the illness. How is the family going to afford all this? The answer is a tax free, lump sum payout from a critical illness insurance policy, paid out 30 days after diagnosis of a life altering illness or injury. Any Canadian family could benefit greatly from $50,000, $100,000 or even $250,000 tax free cash if Mom was seriously ill and could no longer do everything she normally does around the house.
Get proper insurance plans on Mom – she is more than worth it
Do you know the real value of Mom in your family? Try the Salary.com What’s A Mom Worth Calculator. Is your family insured against the loss of Mom? Contact Life Guard Insurance to speak with a professional life insurance broker in Canada who can help you family get the proper insurance planning in place, and protect the real value of Mom – she’s worth it. Happy Mother’s Day.
The article was written by +Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about the real value of Mom in Canada would be very much appreciated.
LIMRA Shows Canadians & Americans Continue to Invest in Life Insurance
Even with growth there are still many gaps in the life insurance market
2011 was another good year for life insurance sales as reported by LIMRA, North America’s leading research company for the life and health insurance industry. Total annual premium in rose by 4% year over year, and for only the second time in the last 30 years, the number of life insurance policies that were sold increased (usually due to inflation, consumer buy larger policies costing more premium and this is what drives growth, not the policy count).
A very interesting statistic is that term life insurance sales decreased both in total premium and in the policy count sold. Total term insurance sales dropped 6% in premium and 4% in the number of policies. This is a reverse trend to the increasing term life insurance sales that the life insurance industry has been seeing for the past decade. This might be due to consumer beginning to see the value in permanent life insurance contracts, like whole life insurance, with its guaranteed premiums, guaranteed cash values and life-long insurance coverage. The continued volatility in the equity markets has put a spotlight back on life insurance products as a safe and stable investment for Canadian and US families.
Whole Life Insurance Sales Propel the Market
For the sixth year in a row whole life insurance sales have climbed in 2011. Canadians and Americans are more and more turning to whole life insurance for the guarantee to never lose money and to provide life insurance protection for their family and estate throughout their life. Sales of whole life insurance grew by 9% in 2011 over 2010. Now with the increasing price of universal life insurance due to continued low interest rates, whole life insurance is going to look more and more attractive to Canadians as a long-term investment and risk management tool. Even investment advisors are beginning to praise the value of whole life insurance, treating it as another “asset class” in an investors overall portfolio.
Less than half of households had an opportunity to buy life insurance in 2011
A recent research paper published by LIMRA shows that only 39% of households remember having an opportunity to buy life insurance over the past 2 years. This shows that there is a larger and larger gap in the market between consumers who want and need life insurance planning and the agents and brokers who are able to deliver it to them. Of the 39% who had an opportunity to buy, over half (58%) actually purchased life insurance. This shows that if more families were presented with an opportunity to buy life insurance, then likely more insurance would be willingly purchased, and the risk gap for Canadians would shrink.
Over half of “serious shoppers” bought life insurance last year
Another LIMRA report shows that 54% of “serious shoppers” bought life insurance over the past two years. These serious shoppers are the 22% of households that actively shopped for life insurance. Even though these motivate shoppers, who either phoned around for help or went online to purchase life insurance, had a high rate of purchasing coverage, there are still challenges that consumers face. Here are the main difficulties consumers have which creates a barrier to actually purchasing life insurance:
- Determining if they are getting their money’s worth or not
- Understanding all the details of the policy
- Being confident what type of life insurance to buy
- Deciding how much life insurance to buy
If life insurance brokers can help their clients overcome these barriers to purchasing, more Canadians would purchase the coverage they need. What is striking is that only 43% of life insurance shoppers who met face-to-face with an insurance advisor actually received a needs analysis. This seems like a basic, fundamental part of the life insurance sales process, but less than half of the life insurance sales people are completing this analysis with their clients.
Face-to-Face meetings are still better than shopping online
The advent of the internet and the ability to shop online for life insurance has seen a large increase in the number of people who say they actively shopped for life insurance products. 22% of households in North America shopped for life insurance in 2011 – without first being contacted by an insurance advisor. Unfortunately, the use of the internet is not turning life insurance shoppers into life insurance owners. Only 36% of life insurance shoppers online finally purchased life insurance without having a face-to-face meeting. In fact life insurance shoppers 150% more likely to buy the life insurance they need if they have a face-to-face meeting with an insurance broker/advisor rather than doing everything online or over the phone.
Consumers want a needs analysis and insurance that fits into their budget
People who are looking to buy life insurance can really benefit from an insurance needs analysis. And so can brokers and agents. When clients complete a life insurance needs analysis they typically buy 60% more life insurance coverage because they understand how much is required to properly protect their family.
Another major complaint among shopper about brokers and agents is that they don’t take into consideration what is affordable for their clients. This also prevents sales from being made, when the broker presents solutions that are too expensive for the family’s budget, and alternative and cheaper life insurance options are not presented.
Life insurance brokers did receive high marks from consumers on their level of knowledge and their willingness to explain and educate their clients. So, at least we (us brokers) are doing some important things right.
For personalized service from and experience life insurance broker contact Life Guard Insurance
Even though Life Guard Insurance is an extensive online resource for life and health insurance information, we still like to do things the old fashioned way. When you contact us for advice, we connect you with a life insurance broker in your area who will be able to conduct a face-to-face meeting and help you buy the life insurance you need.
The article was written by +Mitch Reynolds. If you found this article interesting or it made you think, please feel free to share your comments below. Liking us on Facebook, giving us a +1 on Google or Tweeting this article about life insurance sales and trends from 2011 would be very much appreciated.