Archive for the ‘Equitable Life’ Category

Equiliving Critical Illness Insurance for Children

Equitable Life makes its Equiliving Critical Illness Insurance product available for children

Equitable Life of Canada is the latest life insurance company to design a critical illness insurance policy for children. As of July 25, 2011, Equitable Life redesigned their Equiliving Critical Illness Insurance policy to include children. This is an excellent health insurance protection product for families looking to make sure their children have access to the very best medical care, home care and parents at their bedside.

Critical illness insurance on children allows parents the financial freedom to be there for their children when they are seriously sick and need care. Very often parents need to choose between a job, family vacations, education and retirement savings vs. providing the care and attention their children need when managing a critical illness. A children’s critical illness insurance policy avoids having to make these though choices because you have financial resources to get through.

Equiliving Children’s Critical Illness Insurance plan design

Parents can buy Equiliving Critical Illness Insurance for their children starting at 30 days after birth. The children’s policy is issued until age 17 (at 18 it is issued as an adult policy). Here are the key features of this critical illness insurance plan for children:

• Minimum coverage $25,000
• Maximum coverage $250,000
• Covers 25 normal critical illness conditions
• Covers 5 childhood conditions until age 25; namely Cerebral Palsy, Congenital Heart Disease, Cystic Fibrosis, Muscular Dystrophy and Juvenile Diabetes
• Access to Best Doctors
• Early Detection Benefit
• Return of Premium on Death (optional)
• Return of Premium on Surrender/Expiry (optional)

Three plan options

The Equiliving Critical Illness Insurance policy has three different types of plans you can chose from:

• Term 10 renewable to age 75 – price increases every 10 years and policy expires at age 75.
• Term to 75 – level cost to age 75 then the policy expires.
• Term to 100 – lifetime critical illness insurance coverage even if you live past age 100.

The term 10 policy is the least expensive in the early years but will increase to be more expensive than the term 75 and term 100 plans after its first or second renewal. The term 75 plan is well priced and covers your children through their entire youth and adult life, and into retirement. Combined with a return of premium on expiry/surrender and your children will get back the entire premium invested into the plan if they never get sick.

Cost of children’s critical illness insurance

There is very little change in premium for children under this policy. A quick analysis of pricing seems to show that the price remains level from age 30 days until 10 years old. Then the critical illness insurance plan drops slightly in price for children ages 11 to 15, and then gets more expensive again for ages 16 and 17. As I said, the pricing difference is minor, and changes only about 5-6% either up or down.

For this reason I will do a quick comparison of prices for age 5 – the standard price for all children to age 10. We will look at the three different products, Term 10, Term 75 and Term 100 for amounts of $50,000, $100,000 and $250,000. All quotes with include Return of Premium on Death but not on Expiry/Surrender.

Boy

Girl

Get a quote for your children’s critical illness insurance

If you are interested in finding out more about critical illness insurance for your children, please feel free to contact Life Guard Insurance. We can help you with the Equitable Life Equiliving critical illness insurance plan or other children’s’ critical illness insurance policies from various insurance companies.

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  Equitable Life launches children’s critical illness insurance would be very much appreciated.

Should your life insurance be cheaper than paying for a car?

Life insurance is much more valuable than your car so why should you pay less for it?

How much do you pay for life insurance premiums vs. your car payments? Which asset, your life insurance or your car, do you think is more valuable? In this article I want to show you how owning a life insurance policy can be way more valuable than owning your car AND how you can spend less money than you will spend on car payments over your life.

The cost of car payments over time

If we could all just buy one car in our lives and drive it forever, we would be in good shape. Unfortunately we tend to rotate cars on a regular basis and seem to be perpetually paying for a vehicle. The average lifespan of a vehicle in Canada is a little over 8 years. If it took you 4 years to pay off a car, then you would be having car payments for half your adult life. Maybe, maybe not, depending on how well you take care of your car and/or you continuously upgrade your ride.

If we were to assume the average care payment is $350 per month, and they were making these sorts of payments for 25 years of their adult life, they would shell out $105,000. Now, let’s assume their vehicle was sold as used car at the end of 8 years, and they were able to get $5,000 out of a $30,000 vehicle. If they did this 7 times over the course of your life, they would have a net value of $35,000 for your investment of $105,000.

We all know cars are a depreciating asset, but in this scenario you only get 33.33% of your investment day, and lose two thirds of the value.

What could a permanent life insurance contract do for you?

If you were willing to spend the same amount of money and “invest” into a secure permanent, cash value life insurance policy, how would your investment and total value stack up over time? Life insurance is an appreciating asset and is increased by the immediate insurance death benefit attached to the policy.

For the sake of this analysis, let’s assume the following:

• Woman, age 30 (nice and young to simulate all those years of owning a car)
• Non-smoker in regular health (the vast majority of Canadian women)
• Willing to invest $350 monthly into a whole life insurance policy with guaranteed cash values and dividend payments
• Wants to have her policy paid off in 20 years

For this analysis I will illustrate a Participating Whole Life Insurance policy from Equitable Life. This plan is called an Equimax 20 Pay, and here is what she would get for her money:

• $420,000 of life insurance coverage ($351.64 per month)
• Total investment over 20 years = $84,393.60
• Cash values at ages 50, 65 and 85: $112,114, $379,448 and $841,761
• Total death benefit at ages 50, 65 and 85: $420,000, $601,572 and $1,147,545

So what is the rate of return on her money? The rate of return will increase as she ages since her premiums were front-end loaded into the first 20 years. Here is the basic calculation on the cash value only (annualized rate of return):

• Age 50 – 1.43%
• Age 65 – 4.38%
• Age 85 – 4.27%

The stable and secure rate of return on the cash value only is 4+% annually over time. BUT, what if we looked at the real rate of return, which is the total death benefit of the policy. Then the rates of return would be:

• Age 50 – 8.35%
• Age 65 – 5.77%
• Age 85 – 4.85%

Since the death benefit is a large immediate payment in the early years, the whole life insurance rate of return would be inflated if something happened to you while you’re still young. As you age the rate of return decreases because the $420,000 of death benefit is minimized by the growth of money. Still, in today’s economy getting a secure and stable 5+% growth on your money in a tax sheltered plan is very attractive.

Make your life insurance payments a priority over your car payments

When you look through your finances, deciding on where best your money should go, looking at your life insurance would be a very valuable plan vs. buying depreciating assets like cars. What I’m trying to say here is if you’re willing to that much money over time for a vehicle why wouldn’t you be equally or more willing to invest that money into yourself and your family’s future?

If you can afford to save or invest money into a life insurance policy, we can show you how best to do it. Feel free to contact Life Guard Insurance to find a qualified life insurance broker who can show you how permanent cash value life insurance can be a great financial asset, not an expense.

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 cash value life insurance vs car payments would also be very much appreciated.

Adding a Child Term Rider to Parent’s Policy is a Basic Life Insurance Plan for Children

A Child Term Rider provides risk protection today and converts to personal insurance tomorrow

Starting a life insurance plan for your children has never been as easy or as cheap as adding a child term rider to your personal life insurance policy. If you are shopping for your own life insurance plan or even if you already have one, you can add a child term rider (CTR) to the policy to cover all your children for one low price.

The most impressive feature of a child term rider is the conversion option when your child becomes an adult. This allows your child to pull the child term rider out of your policy and convert it into a much larger amount of personal life insurance without qualifying medically for the insurance. So, if effect, you are giving your kids the gift of “insurability” for their future – a gift that becomes very valuable if your child developed a health condition that made him/her uninsurable in the future.

How does a child term rider work?

A child term rider is an add-on to a regular adult life insurance policy. By adding the child term rider to their policy, parents can insure ALL their children with a level amount of benefit for one low monthly cost. Most child term riders offered by different insurance companies will allow parents to buy between $5,000 and $30,000 of life insurance coverage for each of their children.

As I said, the policy has one low cost and all children are covered. You need at least one child to be born in order to add the child term rider to your policy. Your children must be between the 15 days old and age 18 to get a child term rider. You must complete a simplified medical questionnaire for each of your children who are already born. The good news is that all NEW children you have will automatically be added to the child term rider without completing the medical questionnaire.

The child term rider doesn’t last forever. After a period of time the rider will terminate. This is different for each company. Most will only insure children until age 25. Some policies automatically cancel the child term rider after 20 years on the parent policy, while others will cancel when the child reaches age 25 or the parent reaches age 65, whichever comes first.

Let’s look at cost (maximum child term rider across a few different insurance companies):

• Sun Life – max benefit of $20,000: $8.10 per month
• Equitable Life – max benefit of $30,000: $13.50 per month
• RBC Insurance – max benefit of $30,000: $16.20 per month
• Canada Life – max benefit of $25,000: $13.50 per month
• BMO Insurance – max benefit $20,000: $16.85 per month

The conversion feature of a child term rider

The most important feature of a child term rider is your child’s ability to take over the rider as a personally owned life insurance policy when they become an adult. The child is allowed to take over the life insurance between the ages of 21 and 25 and convert it into any permanent life insurance policy available from the insurance company at the time.

The amount of life insurance that can be converted varies between companies. Most companies allow five times (5X) the base amount of life insurance to be converted without evidence of insurability. Some, like Canada Life, allow 10 times the child term rider amount to be converted. So, in the case of most companies, you could convert a $30,000 child term rider into $150,000 of personal life insurance. Canada Life would allow you to convert a $25,000 child term rider into $250,000 of personal life insurance that your child owns.

The conversion feature can be one of the most valuable financial plans you could ever give your child. If your child’s health was not good, and they developed a childhood disease like juvenile diabetes of cystic fibrosis, they would be uninsurable for a regular life insurance policy when they became an adult. The child term rider conversion option would allow them to get a large amount of personal life insurance without having to qualify for it medically.

Manulife Financial’s unique child term rider

Manulife has a unique child term rider that is different from all others in Canada. They have a small premium PER child of $2.50 per month. This can make the rider a much cheaper option if you have only one or two children. The child term rider has only one death benefit of $10,000 for each child. This is lower than the competition but the conversion feature is much better.

For each of your children you can convert their $10,000 child term rider into $250,000 of personal life AND critical illness insurance at age 25. The critical illness insurance conversion amount is limited to $100,000, but that would still leave $150,000 available for conversion into life insurance. All these conversions are done without evidence of insurability, even the critical illness insurance! The only stipulation is that your child does not have an illness that would immediately trigger a critical illness insurance claim at the time of conversion – like if he or she was currently dealing with cancer they could not get the critical illness conversion. The life insurance conversion for the full $250,000 would still be available, however.

Life Guard Insurance can set up your life insurance with a child term rider for your kids

If you are shopping for your own life insurance and would like to include your kids, or you would like to add a child term rider to an existing life insurance policy, we can help. Feel free to contact Life Guard Insurance to find out more about how to protect your children with a child term rider.

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 a child term rider would also be very much appreciated.