Personal Finance

Life Insurance Q&A - w/ FAQ Section

  • Last Updated:
  • Nov 10th, 2017 3:52 pm
Newbie
Jun 25, 2017
52 posts
16 upvotes
awesome thread!

My wife and I met with a broker last night from first ontario. He is recommending that we go through cumis. Anyone heard of them? What is the general census?

Here is my info, I'd like to know if we are getting good rates.

Myself 33, 80K income, 14k in debt, 380K mortgage.
Wife 26, 54K income, no debt ( other than the mortgage we share).

We calcuated that we have net assets of 122k.

We are both non smokers.No kids. No major health concerns.

Got standard quotes for both of us for term10 ( one million each) and critically ( 50K each)
We might be able to get the preferred rates but we still have to go through some medical testing so for now the below numbers are standard

Husband , 103 per month in total (43 for term and 60 for CI).
Wife, 65 per month total ( 30 for term, 35 for CI)

Thoughts?
Member
Sep 23, 2013
237 posts
110 upvotes
Windsor, Ontario
Master2031 wrote:
Aug 15th, 2017 11:11 pm
awesome thread!

My wife and I met with a broker last night from first ontario. He is recommending that we go through cumis. Anyone heard of them? What is the general census?

Here is my info, I'd like to know if we are getting good rates.

Myself 33, 80K income, 14k in debt, 380K mortgage.
Wife 26, 54K income, no debt ( other than the mortgage we share).

We calcuated that we have net assets of 122k.

We are both non smokers.No kids. No major health concerns.

Got standard quotes for both of us for term10 ( one million each) and critically ( 50K each)
We might be able to get the preferred rates but we still have to go through some medical testing so for now the below numbers are standard

Husband , 103 per month in total (43 for term and 60 for CI).
Wife, 65 per month total ( 30 for term, 35 for CI)

Thoughts?
Cumis is basically a insurer for credit unions, I'm not too familiar with them but I know I'm not a fan of any type of post claim underwritten insurance. Whether or not they solely do that, I'm not entirely sure.

Here are some issues I see off hand, $1,000,000 of life insurance, why? Why that much? Have you had a financial needs analysis done? For a couple with no children and $400,000 debt, that seems high. IF you plan on having children soon I can see a need for more insurance, but I still don't know about $1million. Also how much of that $380k mortgage is still currently owing?

For Critical illness, I generally recommend covering a years income, depending on price, cash flow and health. You might want to consider a little bit more, but before making any type of deciion on critical illness, do you and your wife had long term disability insurance? That would be a priority over CI in my opinion.

In terms or the length of the term, it depends on what you're covering. If you want to cover just the mortgage and you know it'll be paid off in 10 years, go with a 10 year term. For anything cover a potential child, go with a 20 year term. If you're buying insurance early to plan for a child, I would recommend having a portion of that $1mil as a 20 year term.

I'm also not a fan of telling people they might qualify for preferred rates. I've only ever had 3-4 people qualify for preferred. Don't hold your breathe on that one. If you're comfortable giving a few more bits of information, I can give you a general financial needs analysis to tell you if that $1million makes sense.
Newbie
Jun 25, 2017
52 posts
16 upvotes
SteveDfsin wrote:
Aug 16th, 2017 12:48 pm
Cumis is basically a insurer for credit unions, I'm not too familiar with them but I know I'm not a fan of any type of post claim underwritten insurance. Whether or not they solely do that, I'm not entirely sure.

Here are some issues I see off hand, $1,000,000 of life insurance, why? Why that much? Have you had a financial needs analysis done? For a couple with no children and $400,000 debt, that seems high. IF you plan on having children soon I can see a need for more insurance, but I still don't know about $1million. Also how much of that $380k mortgage is still currently owing?

For Critical illness, I generally recommend covering a years income, depending on price, cash flow and health. You might want to consider a little bit more, but before making any type of deciion on critical illness, do you and your wife had long term disability insurance? That would be a priority over CI in my opinion.

In terms or the length of the term, it depends on what you're covering. If you want to cover just the mortgage and you know it'll be paid off in 10 years, go with a 10 year term. For anything cover a potential child, go with a 20 year term. If you're buying insurance early to plan for a child, I would recommend having a portion of that $1mil as a 20 year term.

I'm also not a fan of telling people they might qualify for preferred rates. I've only ever had 3-4 people qualify for preferred. Don't hold your breathe on that one. If you're comfortable giving a few more bits of information, I can give you a general financial needs analysis to tell you if that $1million makes sense.
Hi Steve thanks for the reply.

Our outstanding mortgage sits at 350k.

Like you were saying I think 1 million is too high so we might opt for 400-500k although my wife and I are planning on having kids 3-5 years from now ..

We both have long term disability through our work and also have 2x salary life insurance.
Member
Sep 23, 2013
237 posts
110 upvotes
Windsor, Ontario
Master2031 wrote:
Aug 16th, 2017 1:49 pm
Hi Steve thanks for the reply.

Our outstanding mortgage sits at 350k.

Like you were saying I think 1 million is too high so we might opt for 400-500k although my wife and I are planning on having kids 3-5 years from now ..

We both have long term disability through our work and also have 2x salary life insurance.
On possibility is to just do $350,000 on each other to cover the mortgage (work plan would cover funeral and time off) and just include a guaranteed insurability rider for when the time does come to have a child.

Another is to do a T10 for the $500k range, depending on what a financial needs analysis says factoring in children. When the time comes to get serious about having children, assuming it's in the next 5 years, convert it to a T20 and the schedule resets to align with the financial obligations of having children.

There are many different ways to build up a plan, don't get in the habit of using dollar amounts of insurance and term lengths without a reason.

Hope this helps, if you have any other questions keep posting. I guarantee you other people are learning from your posts.
Deal Addict
Jun 28, 2013
2136 posts
693 upvotes
YUL/YVR
bcbud3 wrote:
Jun 15th, 2017 12:32 pm
I am a 41 year old NS male with two children 6 and 4. I have a stay at home wife and a mortgage of about $140k. I think about 500k-750k insurance should be enough and about a 20term? I know everyone situation differs but I want to try to keep things simple. Any better ideas or products to look at? Is there a site that compares rates? Thank you
bcbud3 wrote:
Jun 15th, 2017 2:30 pm
Thank you, is there other name for insurance advisors? Any companies you know of in the Vancouver area that provide this service?
I'm located in Vancouver, and if you want a second opinion, feel free to PM me.
Newbie
Mar 5, 2016
30 posts
2 upvotes
YYC
Hello.

I need some Life Insurance advice, Looking for 1MM Term 20 coverage. I live in AB but went through a broker in ON (known to my mother etc etc :facepalm: :rolleyes: ). I was told to apply for the Manulife Vitality Plan by the broker and all the tets were done. Manulife came back saying that they cannot insure me because I have diabetes. WE have roughly $400K of mortgage left which will become $160K if one of our houses get sold off. We are also in the process of starting a family immediately and I would like to get the life insurance part covered up before the little one comes along. My questions are as follows.
Me - M, 31, NS,
My Wife - F, 27, NS
  • Was it right to go through a broker in ON when I was living in AB?
  • Are there different companies which operate in AB alone?
  • Am I better of in finding an agent/broker in AB to purchase my insurance?
  • I was looking at Sunlife and TD Life Insurance and I am planning to call them up to get a quote. Which is better?
    [*} Do I have to disclose that Manulife declined to insure me in all the questionnaire and will this cause any issues?

If anyone in Calgary area can chime or PM me, that would be a great help.

Thank You.,
Newbie
Oct 31, 2012
89 posts
17 upvotes
WATERLOO
Does anyone know how participating insurance works in Canada?
Member
Sep 23, 2013
237 posts
110 upvotes
Windsor, Ontario
with295 wrote:
Aug 26th, 2017 8:27 am
Does anyone know how participating insurance works in Canada?
Yes, I'll give you a simplified answer. Participating (PAR) insurance is a type of permanent life insurance where the policy owner shares the risk with the company for a chance at growth within the policy

Ex: A regular permanent insurance policy might be $100 a month for $100,000 until you die. With a PAR, it might be $200 a month.

That extra $100 dollars goes towards the saving component of the plan which grows. As time goes by, you can then exercise certain options in the plan to decide what gets done with the excess. One of the main reasons for this type of plan is a tax strategy or estate planning.

Obviously it's a lot more complex, but this is just a cookie cutter breakdown of how PAR works. Please note those aren't actual premiums, I just threw out nice numbers to prove a point. Also PAR is not for everyone, you're always better off maxing your RRSPs and TFSA before looking at a life insurance policy to invest.
Jr. Member
Feb 2, 2011
137 posts
4 upvotes
anyone know if monthly premiums for permanent and whole life will increase when the BANK OF CANADA increases rate in Oct.... or will decrease
Member
Sep 23, 2013
237 posts
110 upvotes
Windsor, Ontario
ediasn wrote:
Aug 28th, 2017 6:10 pm
anyone know if monthly premiums for permanent and whole life will increase when the BANK OF CANADA increases rate in Oct.... or will decrease
It's impossible to know if prices will go up or down on insurance products, there are a lot of moving parts that go into setting premiums from an actuarial point of view. If you're talking about premiums on a plan that's already in force, then no, prices will not go up or down.
Jr. Member
Feb 2, 2011
137 posts
4 upvotes
SteveDfsin wrote:
Aug 28th, 2017 8:53 pm
It's impossible to know if prices will go up or down on insurance products, there are a lot of moving parts that go into setting premiums from an actuarial point of view. If you're talking about premiums on a plan that's already in force, then no, prices will not go up or down.
so no general rule like mortgages where if BoC rate goes up, then premiums go up or down on NEW policies...
Jr. Member
Feb 2, 2011
137 posts
4 upvotes
also does it matter what Insurance broker you go through? Don't all get the same rates? and they are not allowed to offer incentives dont think
Deal Addict
User avatar
Jul 13, 2014
1727 posts
266 upvotes
Toronto
SunSpectrum Permanent Life II and Sun Par Protector II

What I want is to pay as little as possible, have it fully paid up in a maximum of 20 years, and have a guaranteed death benefit that is protected from inflation.

If neither of those 2 are any good, does anyone have any other suggestions?
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Member
Sep 23, 2013
237 posts
110 upvotes
Windsor, Ontario
MayorOfToronto wrote:
Sep 4th, 2017 5:51 am
SunSpectrum Permanent Life II and Sun Par Protector II

What I want is to pay as little as possible, have it fully paid up in a maximum of 20 years, and have a guaranteed death benefit that is protected from inflation.

If neither of those 2 are any good, does anyone have any other suggestions?
There's a lot of contradiction here unfortunately. If you want a policy that's paid up in twenty years, you will pay quite a bit more, premium wise. Life time plans have lower premiums, but of course you'll be paying for life, unless you use your dividends to offset future premiums. The problem with that is that it can only be based off of projections, no one knows what kind of dividend growth a PAR product will have in the future. There are different options out there, I'd recommend you not taking cookie cutter advice.

Can I ask, why PAR? Are you maxing out your RRSPs and TFSA? If not, those would be a priority over PAR life insurance.
Deal Addict
User avatar
Jul 13, 2014
1727 posts
266 upvotes
Toronto
SteveDfsin wrote:
Sep 4th, 2017 4:33 pm
There's a lot of contradiction here unfortunately. If you want a policy that's paid up in twenty years, you will pay quite a bit more, premium wise. Life time plans have lower premiums, but of course you'll be paying for life, unless you use your dividends to offset future premiums. The problem with that is that it can only be based off of projections, no one knows what kind of dividend growth a PAR product will have in the future. There are different options out there, I'd recommend you not taking cookie cutter advice.

Can I ask, why PAR? Are you maxing out your RRSPs and TFSA? If not, those would be a priority over PAR life insurance.
I was sold into a Universal Life Insurance policy. I believe I'm paying more than I should and I could invest it myself instead of having the insurance company take a cut. The projections show it would be paid-up in 20 years but from what I understand, that is based on the performance of the investment portion of it.

I'm looking for something guaranteed that can be fully paid off within 20 years and will have a value consistent with inflation. Inflation is why I'm thinking of a par since it would allow me to use dividends to purchase additional paid-up insurance. I doubt that would be enough to cover inflation but it's something.
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