Life & Employee Benefits

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Life insurance is not the most popular topic, but it is a great method of providing for loved ones in the event of an untimely death.  Life insurance is also used in situations where someone wants to ensure that their estate goes to their heirs and not Revenue Canada.

Basically there are two types of life insurance, term and permanent.  Both types of insurance have applications for various situations.

Term Insurance is a great product if a family with young children needs protection, as the cost is reasonable.  Term insurance increases in price after a certain “term.”  This means that the price is locked in for the specified period of time, and after the term, the price will increase.  Example: 20 year term life insurance will increase in rate in the 21st year.

If you are married and have young children, you can purchase a 20 year term policy for a very low cost and have protection available while children are growing and depending on you for education, clothing and shelter.  These plans are cancelable at any time by you, not the insurance company. An attractive feature of these plans is that they are convertible to permanent life insurance regardless of your health.  This means that you can “convert” the term life insurance to a permanent plan which will last your entire life.

Term Life Insurance versus Bank Mortgage Insurance

With A Life Insurance Company

• You purchase an individual policy.
• You own the policy - you have complete control over it.
• You may purchase any amount of coverage.  You may add it to an existing plan.
• You cancel the policy. Your policy cannot be cancelled by the insurance company.
• Your individual policy may be continued as long as you wish. It is fully portable.
• You can convert this policy, regardless of health.
• You can make a beneficiary designation. In the event of death, your beneficiary will receive the proceeds. Your beneficiary will have the choice of repaying the mortgage in full or not. Proceeds from a life insurance company are protected from all creditors (including banks).
• You and your spouse may own an individual policy.  Should you both die the proceeds are paid on both policies. If one dies then the coverage on the survivor will continue.
• You are buying from a licensed professional that can help you in making your decision.
• Premiums are fully guaranteed

With a Bank or Trust Company

• The coverage is under a group policy.
• The bank owns the policy - you have no control over it.
• The face amount of your policy can only be for the exact amount of your mortgage.
• The policy can be cancelled by the bank / issuing company at any time.
• The coverage will terminate upon mortgage repayment, assumption, or sale of the house.
• The group policy is not convertible.
• The group policy does not allow you to make beneficiary designations. In the event of death the bank is repaid automatically - not your family.
• The group policy covering the husband and wife pays on the first death not both. The coverage on the survivor can not be continued.
• The group policy allows no other benefits or features to be added.
• The group policy may not offer the benefit of a professional counselor. The bank loans officer is not a licensed life insurance agent. They may or may not be well informed on various types of coverage available.

Permanent Life Insurance is a type of policy which has a guaranteed premium and coverage will remain in force for life.  These types of policies are great for young people as the rate is low in cost due to age.

There has been much discussion whether people require any permanent life insurance.  There is the philosophy of buying term and investing the difference.  At Olsen-Sottile we don’t believe that any one philosophy will pertain to any one individual or family.  Everyone is different and has specific needs when it comes to purchasing life insurance.  Having some permanent life insurance does not have to be expensive and can prove to be very valuable later on in life.

Different types of plan designs
 
Joint last to die – the policy is purchased on two people (usually husband and wife) and the policy pays on the last death.  The purpose of this plan is to provide funds to cover any outstanding taxes, such as transfer of property (cottage capital gain) or a transfer of a business or assets.
 
Buy – Sell Life Insurance – If you are in business and have one or more partners, life insurance can be purchased on each partner so that in the event of the death of a partner, the policy is used to purchase the shares of the company from the deceased partner and paid to the beneficiary to buy out the interest in the company.

Life insurance policies are paid out to the beneficiary tax free.

At Olsen-Sottile Insurance Brokers, we have many years of expertise and we are connected to all major insurance providers to ensure that we offer you the best product and the best price for your situation.

Employee Benefits

If you presently have a group benefits plan and would like a quotation or review of your plan to ensure that the rate you are paying is fair, or if you are looking for your first employee benefits program, please contact Ken Lozon or Martin Williams and they can assist you with the process. We are affiliated with all major markets in Ontario, and have many years of experience dealing with group benefits.

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