Products and Definitions
Maria is committed to providing individual and corporate investors with fully integrated solutions to their group benefits packages, life insurance, investments, retirement, education, estate and tax planning needs.
WHAT IS PERMANENT LIFE INSURANCE?
Workings:
- Premiums payments can be level or flexible
- Premiums are paid over a number of years (e.g. 5, 10, or 20 yr.) or lifetime-adjust to fit your budget.
- Proceeds are paid out when death occurs
Benefits:
- Money grows on Tax-advantaged basis
- This may be the lowest long term cost
- Helps you to regularly put money aside
WHAT IS TERM LIFE INSURANCE?
Workings:
- Premiums are paid for a specific time
- Coverage remains level for a specific period (i.e. 1- 5 -10 and 20 years)
- Premiums will increases at every renewal period
- You can also purchase Term 100 insurance coverage
Benefits:
- Initially premiums may be lower
- May be the lowest short term cost
- It is considered to be the highest long term cost
WHAT IS UNIVERSAL LIFE INSURANCE?
- Flexible premium, adjustable benefits, current interest rate applied
- Combines term insurance and savings account. Both are paid out at death.
- Premiums can be increased or decreased, skipped or stopped provided there is enough value to maintain the cost of insurance
- From the premium a deduction is made for expenses and cost of insurance. The balance is invested for the policyowner
- Came to Canada in 1981-2 during a peak interest rate period
- Buyers wanted better returns and an "unbundled" product
- Unbundling the product leads to flexibility of coverage, deposits, investments
- Changes to taxation effective Dec. 1, 1982 made UL more attractive
WHAT IS WHOLE LIFE INSURANCE?
- Insurance for the whole of life
- Level premium throughout the life of the insured – 20 year pay or pay to age 65.
- Premium in the early years is more than is needed to cover the risk
- Difference is invested to form a policy reserve for premium needed in later years
- Takes care of increasing risk of death with age (1 per 1,000 @ 25, 145 per 1,000 @ 85)
WHAT IS CRITICAL ILLNESS INSURANCE?
Critical Illness Insurance pays a lump sum Benefit upon diagnosis of a covered condition, such as, heart attack, cancer and stroke. Critical illness insurance first emerged in South Africa in 1983 and was known as dread disease insurance.
Dr. Marius Barnard Founder of Critical Illness Insurance, the brother of the late world-renown South African heart transplant surgeon, Dr. Christiaan Barnard
HOW DOES CRITICAL ILLNESS INSURANCE WORK?
There is a 30 day survival period. If you are alive on the 31st day after diagnosis or surgery, then the benefit becomes payable. How to Qualify?
- You must be healthy when applying for coverage
- Smokers will be rated higher than non-smokers
- Family history is very important
WHAT IS DISABILITY INSURANCE?
Disability Insurance Policy will provide assurance that if you become disabled and can no longer perform work in order to earn your income, you will have coverage. Many companies will give you the option of different levels of cover. Insurance premiums are usually deducted from your bank account (PAC).
Disability Insurance will pay you an ongoing income if you become disabled and are unable to pursue employment or business activities. There are limits to how much you can receive based on your pre-disability earnings. Rates will vary based on occupational duties and length of time in a particular industry. This kind of coverage has a waiting period before you can begin collecting benefits, usually 30, 60, 90 or 120 days. The benefit paying period also varies from 2 years to age 65. A short waiting period will cost more that a longer waiting period. As well, a long benefit paying period will cost more than a short benefit paying period.
WHAT IS SEGREGATED FUNDS?
A segregated fund is an investment fund that you hold within an insurance contract. The term “segregated” refers to the fact that your investment is separated from the general assets of the insurance company. Your insurance contract dictates the insurance protection you receive. So segregated funds are an insurance contract that provides you investment management plus protection.
Segregated funds are similar to mutual funds in many respects but provide a number of additional features and benefits.
Like mutual funds, segregated funds are run by professional money managers who have the experience and skills necessary to effectively manage your money. They also have access to economic data, company research reports and technology that may not generally be available to you. Like mutual funds, segregated funds provide you with access to diversified investment portfolios. Diversification – or spreading your assets among a variety of different investments is an investment strategy designed to lower a portfolio's overall risk while enhancing returns over time.
MATURITY & DEATH GUARANTEES
Depending on the contract, an investor can choose from a number of options that guarantee a minimum of 75% up to 100% of the total amount you paid to the contract upon death or contract maturity*. Potential Creditor Protection.
This feature is of primary concern for business owners or professionals as their assets may be exposed to creditors. You may be able to achieve potential creditor protection by naming a “preferred” or “irrevocable” beneficiary. The key relationship is between the life insured (the annuitant) and the beneficiary. There are exceptions to this and it is recommended that you consult independent legal counsel.
ESTATE PLANNING MADE EASY
Proceeds of your contract are paid directly to your beneficiary, avoiding the time and expense of probate. Also, probate is a public process and information associated with it is accessible to the public. By helping your heirs bypass probate, segregated funds can ensure that your personal decisions and information remain the way they were meant to be…personal.
CONSUMER PROTECTION
Segregated funds are eligible for coverage by The Canadian Life and Health Insurance Compensation Corporation (CompCorp). This plan protects Canadian policyholders, within limits, from loss of benefits in the event of the insolvency of the company.
WHAT IS A REGISTERED EDUCATION SAVINGS PLAN (RESP)?
An Education Savings Plan (ESP) is a savings vehicle generally used by parents to save for their children's post-secondary education. More precisely, it is a contract between an individual (the subscriber) and a person or organization (the promoter). The subscriber makes contributions that accumulate tax-free earnings. In return the promoter agrees to use the accumulated funds to pay or to cause to be paid educational assistance payments to one or more beneficiaries designated by the subscriber. A Registered Education Savings Plan (RESP) is an ESP that has been registered with Canada Customs and Revenue Agency.
TYPES OF PLANS
Non-family plans : These plans can only have one beneficiary. There are no restrictions on who can be a beneficiary under these plans. This means that anyone can be the beneficiary of a non-family plan. The subscriber is free to decide when and how much he wants to contribute. The subscriber can also decide to take a break in contributions at any time.
Family plans : These plans can have one or more beneficiaries. However, each beneficiary must be connected by blood or adoption to each living subscriber under the plan or have been connected to a deceased original subscriber. The subscriber is free to decide when and how much he wants to contribute. The subscriber can also decide to take a break in contributions at any time.
Group plans : These plans are usually offered by non-taxable entities like foundations. These plans are administered on an age group concept i.e. all contracts for beneficiaries who are 9 years old are administered together. Contributions to a Group plan are calculated by the Foundation's actuary. The amount and frequency of these contributions stay the same as long as the beneficiary has not attained 18 years old.
NON-MEDICAL LIFE INSURANCE
• No - medical exam necessary
• Issue ages 40 to 80 • Use age nearest
• Policy amount - $1,000 to $30,000
• Guaranteed cash values and guaranteed paid-up insurance
• Permanent life insurance
• Guaranteed amount payable at death
• Guaranteed level premiums
• Premiums are payable to age 100
• Competitive rates for smokers and non-smokers
• Available as a policy or rider (spouse)
• Issued with limited proof of insurability
• Insurance amount doubles in case of accidental death
• Insurance amount triples in case of accidental death in a public transportation vehicle
GUARANTEED ISSUE LIFE INSURANCE
• 2 – year waiting period (except in case of accidental death)
• No medical exam required
• Issue ages 18 to 80
• Use age nearest
• Guaranteed level premiums
• Guaranteed level death benefits
• Premiums are payable to age 100
• Issued with very limited proof of insurability
• Available as a stand alone policy only
• Death Benefit - $1,000 to $30,000 (to $50,000 with minimal health questions)
GUARANTEED ISSUE CRITICAL ILLNESS INSURANCE
- Issue ages 18 to 64 No medical exam is required
- $25,000 Tax-Free lump sum benefit
- 18 covered illness
- Coverage terminates when the insured is age 65
- Premiums can be paid annually or monthly by cheques, credit card payment, or pre-authorized patments
- Available for you and your spouse
- Available to Canadian residents only
- Some conditions may apply with pre-existing conditions – refer to product manual