Yes, it is very important that everyone have life insurance to cover their mortgage in the event of premature death... but do you have to have it with your mortgage lender?

The answer is No!

Despite what most people think, you do not have to obtain insurance to cover your mortgage with your mortgage lender. There are actually a lot of advantages to owning your insurance personally vs. with a financial institution.

Let's compare...

Personally Owned Life Insurance:

1. You name the beneficiary.
2. You choose how the payment is used - whatever decision is best. You can pay off the mortgage completely or use it to pay other debts.
3. Your coverage does not decrease over time unless you decide to decrease it yourself.
4. If you choose to switch financial institutions, you can take your insurance with you. No need to reapply for coverage.
5. As long as you pay your premiums, your coverage stays in force, even if your mortgage is in default of payment.
6. Some types of life or critical illness will pay you back a portion of your premiums if you choose to cancel your coverage.
7. You may have flexibility to adjust the type of insurance that you have and the amount of coverage, depending on which type you choose initially.

Mortgage Insurance Purchased Through Financial Institution:

1. The mortgage lender is the beneficiary.
2. Only your mortgage balance is insured.
3. Even though your mortgage reduces over time, your monthly premium remains the same.
4. If you are unable to pay your mortgage premiums, you lose your insurance coverage.
5. If you cancel your coverage, all premiums that were paid are lost.
6. There is no flexibility to change your coverage, even though your needs may change.

The same applies to Critical Illness Insurance to protect your mortgage. Why not have more options? You decide if you want to pay your mortgage off completely, or have the cash flow available to make your monthly payments. Either way, YOU are the one with the freedom to choose.

What is Term Life Insurance?

Term insurance provides protection for a specific period of time and generally pays a benefit only if you die during the "term." Term periods typically range from one year to 25 years (although some companies offer Term to 100 plans).

One of the biggest advantages of term insurance is its lower initial cost in comparison to permanent insurance. Why is it cheaper when initially purchased? Because with term insurance, you're generally just paying for the death benefit, the lump sum payment your beneficiaries will receive if you die during the term of the policy. With most permanent policies, your premiums help fund the death benefit and can accumulate cash value.

Term insurance is often a good choice for people in their family-formation years, especially if they're on a tight budget, because it allows them to buy high levels of coverage when the need for protection is often greatest. Term insurance is also a good option for covering needs that will disappear in time. For instance, if paying for college is a major financial concern but you're pretty sure that you won't need life insurance coverage after the kids graduate, then it might make sense to buy a term policy that will get you through the college years.

So what happens when your Term ends but you still have a need for life insurance? In most cases, term insurance is renewable and convertable. ?? This means that at the end of the Term, your converage does not end, it simply renews for another "term" and doesn't expire until you have reached the expiry age (typically age 80 depending on the product/company). Most term insurances also give you the option to "convert" your coverage to permanent insurance without any medical questions asked. This is a great advantage because you will not have to answer medical questions in order to obtain permanent coverage. If you purchase your insurance when you are young and healthy, you are guaranteed to be able to convert to permanent and choose to keep your insurance for as long as you need it, or as long as you live.

To better understand term insurance, consider this analogy: When you purchase term insurance, it's like renting a house. When you rent, you get the full and immediate use of the house and all that goes with it, but only for as long as you continue paying rent. As soon as your lease expires, you must leave. Even if you rented the house for 30 years, you have no "equity" or value that belongs to you... however, the expenses are often less.

See Permanent Life Insurance to read the benefits of choosing this type of insurance.

Permanent insurance provides lifelong protection, and the ability to accumulate cash value on a tax-deferred basis. Unlike term insurance, a permanent insurance policy will remain in force for as long as you continue to pay your premiums. Because these policies are designed and priced for you to keep over a long period of time, this may be the wrong type of insurance for you if you don't have a long-term need for life insurance coverage.

Why would someone need coverage for an extended period of time? Because contrary to what a lot of people think, the need for life insurance often persists long after the kids have graduated college or the mortgage has been paid off. If you died the day after your youngest child graduated from college, your spouse would still be faced with daily living expenses. And what if your spouse outlives you by 10, 20 or even 30 years, which is certainly possible today. Would your financial plan, without life insurance, enable your spouse to maintain the lifestyle you worked so hard to achieve? And would you be able to pass on something to your children or grandchildren?

Whether you are travelling within Canada or outside of Canada... we have several available options, including trip cancellation coverage and loss or damage to baggage.

Group Insurance is available for any business with 3 or more employees.

Call for a free consultation.

Are you self employed without benefits?

Let us provide you with a personal health insurance plan that suits your individual needs.

Plans include:

Extended Health Benefits
Accidental Death & Dismemberment
Prescription Drugs
Dental
Critical Care

**The best time to get individual health coverage is when you're healthy... prepare for the unexpected and call/email today!

We offer the service of Commissioner of Oaths for taking Affidavits. If at any time you are required to sign legal documentation in the presence of a "Commissioner of Oaths," give us a call.

Life Insurance Companies offer segregated funds.

What is a segregated fund you ask and how does this differ from a mutual fund?

Let me explain:

The basic differences between segregated funds and mutual funds are as follows:

Mutual funds are regulated under the provincial securities regulators and segregated funds are regulated by the provincial insurance officials. Mutual funds are offered through a prospectus filed with the provincial securities commission and segregated funds are offered through an information folder.

Like mutual funds, the segregated fund policy holder has no ownership rights in the assets of the fund. They remain the property of the insurance company. Segregated fund units and mutual fund shares are units of value, where the policy holder owns an interest but not a piece of property. According to the market value of a specified group of assets, the insurance company must maintain separate funds with separate assets for each fund.

Segregated Funds are actually variable deferred annuity contracts with insurance protection in the event of death. It is this insurance component that brings together many of the benefits of segregated funds. At death, proceeds of a segregated fund can pass directly to a named beneficiary, and are not subject to creditor's claims, probate, lawyer's or executor's fees. As long as a preferred beneficiary is designated, creditor protection exists during the policy holder's lifetime even if a bankruptcy occurs. Mutual funds don't have this protection, since, upon death, they become part of the deceased's estate and are subject to taxes, legal, executor and probate fees.

Segregated Funds offer guarantees at maturity or death on the limit of potential losses - normally 75% of original deposits, less any withdrawals, are guaranteed which makes them an attractive alternative for the cautious and/or long term investor. No such guarantees exist for mutual funds and it is possible to have little or nothing left at death or when the funds are needed.

If you purchase non-registered mutual funds towards the end of a calendar year, you could pay tax for a year's worth of capital gains even though you did not own units for a whole year. With segregated funds, income is allocated monthly so you don't have to pay tax on gains that arose before you owned units.

Non-registered segregated funds have an additional tax advantage over mutual funds. If a segregated fund looses capital in a given year, the unit holders can claim the capital loss on their taxes and offset any capital gains made on other investments. Taxation rules allow the allocation of capital gains or losses without cashing in the units held. Mutual funds do not have the ability to allocate. They distribute gains or losses and a loss cannot be distributed. The only way to declare a loss with a mutual fund is to sell the units held.

Subject to the applicable death and maturity guarantees, any part of the premium or other amount that is allocated to a segregated fund is invested at the risk of the contract holder and may increase or decrease in value according to fluctuations in the market value of the assets in the segregated fund.

Segregated Funds are only available to Canadian residents. Persons resident or located in other countries are not eligible to purchase these products or associated services. Within Canada, the information on this web site is not intended to be construed as an offer to sell any insurance products in the province of Quebec.