Life Insurance

Who really wants to think about Life Insurance? That said, ensuring your family and estate are covered in the event of your death is one of the most important kinds of coverage you can offer your loved ones.

From something as simple as term life coverage to a more comprehensive financial planning program, Guild Insurance Group can help you identify needs, determine coverage amounts and choose the best financial vehicles.

If you own or operate a business, we can tailor continuity plans, create coverage for key personnel and more.

Life insurance options and financial planning tools add peace of mind and ensure financial protection for you, your heirs and your business.

Personal Life Insurance Needs

PERSONAL LIFE INSURANCE PLANS

Protect your family with temporary or permanent protection. Non-smoker rates and premium reductions for applicants with healthy lifestyles may be available.

DISABILITY COVERAGE: GROUP & INDIVIDUAL

What would happen if your income was lost? Disability insurance is designed to replace a portion of your income if you become disabled and are unable to earn an income. A disability can result from a number of causes, including an injury, a serious illness or a mental health issue. And the duration of a disability can be either short- or long-term.

There are different kinds of disability insurance coverage, including individual insurance plans and group insurance plans, as well as government plans such as workers’ compensation and benefits provided under the Canada Pension Plan.

We’ll show you how income can be replaced when you need it most. Contact our life department to discuss your current portfolio, your needs and answer any questions you may have.

Group Life Insurance

Employee health and peace of mind is vital to the success of every business. Every job seeker is looking for stability and assurance. They want to know that they are protected if they fall ill or get injured. They want to know that their families will have some financial security if they pass away. Businesses can provide this peace of mind by offering the right Group Benefits and Life Insurance coverage to their employees.

By providing a competitive benefits plan, you can attract better employees to your business and retain them for longer. Of course, what constitutes the “right” Group Benefits Plan will vary depending on the business. What works for a self-employed person is different from what is right for a small business. Which might be different from the coverage package optimal for a large company with lots of employees. How can you design a benefits package that makes sense for your business situation?

Getting Started: What Types of Coverage Do You Need?

When designing a Group Benefits Plan for your business, it’s important to think about protecting your most important asset. For most people, the most important asset isn’t a house or a car, but the ability to earn an income. As such, most employees will be looking for an employer that can provide benefits to protect this asset.

In many ways, safeguarding the ability to earn an income is the core purpose of any Group Benefits Plan. If your business has Group Benefits that do not adequately protect employees and their income, then the most qualified people are going to look elsewhere.

Here’s what you need to offer to provide an adequate Group Benefits Plan:

Disability Coverage

In a Group Benefits Plan, disability insurance will provide a specified percentage for an employee’s income if/when that person is disabled and cannot work. If a person is injured, falls ill, whether at work or not, and is unable to work, disability coverage will kick in to protect his or her income. This coverage is vital to the peace of mind of your employees. It ensures they will have income even if they are unable to work. It needs to be a part of your Group Benefits Plan.

Workers’ Compensation and Employment Insurance:

Similar to disability coverage, workers’ compensation insurance exists to replace (some of) an employee’s income if he or she is unable to work due to injury or illness. The difference is that workers’ compensation policies apply specifically to work-related injuries or illnesses. EI will respond when an employer who is not required to carry WCB has an employee that becomes disabled or ill. Some Canadian employers are required to carry workers’ compensation, most will pay EI premiums. Both of these coverages’ generally offer less income benefit, and narrower benefit periods than a traditional Group Plan.

Healthcare Benefits:

While disability coverage and workers’ compensation are there to protect an employee’s ability to earn an income. Healthcare benefits are vital to protecting the income that has already been earned. Healthcare expenses are steep and can quickly exhaust the savings of families or individuals who are not fully insured. Canada’s publicly-funded provincial healthcare plans can cover a sizeable percentage of healthcare expenses after a certain dollar amount or deductible is reached. However, until that time they do not include everything, and costs that aren’t covered can be quite steep. As such, many job seekers are looking to offset those costs for themselves and their families by finding employers that offer extended health care coverage. The benefits of these extended group plans might include coverage for prescription drugs, paramedic services, hospital care costs, emergency travel healthcare coverage and more.

Dental and Vision Coverage:

Dental and vision are also not covered by Canada’s public healthcare system. Getting these types of coverage is a high priority for many citizens, considering the importance of preventative dental and eye care, regular checkups, and diagnostic services. Sometimes, these benefits will be included under the umbrella of extended health care coverage.

Group Life Insurance:

If a person passes away while employed by your business (and therefore covered by your group life insurance plan), the coverage will pay out a certain amount of money to the employee’s family or beneficiaries. How much the policy pays will depend on how your business sets up the plan. Sometimes, the pay-out is a flat amount that is the same for every employee. Other times, the benefit is based on the salary that the employee was earning before his or her death.

Providing these benefits is an investment for any business, but you need to consider it an investment in your employees. Job seekers are looking for these benefits because they want to protect themselves, their income, their savings, and their families. Failing to provide these benefits (or at least the ones that are not required by law) will save your business money upfront, but will also lose you many employees or prospects.

Qualified and experienced professionals are in demand enough to insist on comprehensive group benefits packages from their employees. Even when finding good people willing to work for a company with limited benefits, you will have difficulty retaining them long-term. In other words, by investing in comprehensive Group/Life Benefits, you are investing in quality, satisfaction, morale, and retention of your employees.

How Do I Choose the Right Group Benefits Plan for My Business?

Group Benefits are obviously important for businesses to offer. But does your business need a plan that includes all the elements discussed above?

Not necessarily. If you are self-employed with no employees, you will likely purchase personal insurance and disability policies for yourself and your family. If you run a small business with some employees and your budget for Group Benefits is limited, you might also choose to pursue alternate coverage packages, such as flexible benefit plans or health spending accounts (HSAs).

With flexible benefits, you give employees a list of benefits to choose from and a set number of credits they can allocate throughout that list. By letting employees pick the coverage they need, you avoid paying for insurance that most employees will never use and might not even want. Similarly, HSAs give members credits for healthcare expenses not covered by their provincial plans. This option is cheaper than extended healthcare coverage, but still provides employees with additional peace of mind.

At Guild Insurance Group, we can help you choose the right Group Benefits Plan for your business. Between our in-depth knowledge on this subject and our relationships with the best providers in Canada, we can get you competitive pricing on benefits that make sense for your business.

Mortgage Insurance

For first-time homebuyers, one of the most confusing parts of the process of purchasing real estate is often mortgage insurance. After all, if you are already buying homeowner’s insurance for your property, why do you need another insurance policy for your mortgage? For that matter, why does your mortgage need to be insured at all?

Even if you don’t voice these questions to your bank, they’re probably rattling around in your brain. In this article, we have attempted to get to the bottom of some of the more frequently asked questions, misconceptions and myths of mortgage insurance.

Different Types of Mortgage Insurance

To start, let’s address the question that is probably the elephant in the room: What is Mortgage Insurance?

The most confusing part of mortgage insurance is there isn’t just one answer to this question. On the contrary, Canadian homebuyers can purchase multiple types of insurance for their mortgages.

Mortgage Default Insurance

The most common type of mortgage-related insurance is mortgage default insurance (though most people just call it mortgage insurance). Unlike homeowner’s insurance, mortgage default insurance doesn’t protect you as the homeowner.

Instead, this type of coverage is in place to protect the lender should you default on your mortgage. One of the most recognized providers of this type of insurance is CMHC (Canada Mortgage and Housing Corporation).

Not all homebuyers are required to buy mortgage default insurance. On the contrary, lenders will typically only require this type of coverage for high-ratio mortgages. We think of a mortgage as high-ratio if the buyer’s down payment is less than 20% of the home’s value. These mortgages are riskier for the lender, hence the insistence from the bank that the buyer purchase mortgage insurance.

Mortgage Protection Insurance

The second type of mortgage-related insurance is what is called mortgage protection insurance or mortgage life insurance. A mortgage is the biggest debt that the average person will take on in their lifetime. If you die or become disabled before you have paid off your mortgage, mortgage protection insurance should cover your remaining debt.

It should protect you and your family from financial hardship. You can secure this coverage through life insurance companies and can be purchased through a broker.

Is Mortgage Insurance Mandatory?

In the case of mortgage default insurance, whether it is mandatory will depend on you, your mortgage and your bank. In general, lenders do require homebuyers to purchase mortgage insurance if they are putting less than 20% down. Said another way, if you can manage a 20% down payment on your home, you likely will not be expected to pay for mortgage insurance.

Mortgage protection insurance is not mandatory, and your lender cannot insist upon it. As with other types of life insurance, it is entirely up to you to decide whether to buy this coverage. Your lender may try to sell you mortgage protection insurance, but most industry experts advise homebuyers to decline buying coverage through a lender (for reasons to be discussed later).

The Costs of Mortgage Insurance

Both mortgage default insurance and mortgage life insurance are calculated based on the size of your mortgage loan. In the case of mortgage default insurance, you will pay less the closer your down payment is to 20%. Your mortgage insurance payments should go away when you reach 20% equity in your home. The type and length of your mortgage could also affect what you are paying.

In the case of mortgage life insurance, view your policy to judge if you’re getting a good deal. What seems like a good premium might be less attractive if your mortgage protection insurance payout has a limit.

This means it will only pay a portion of your mortgage in the event of your death. If you decide to buy this type of insurance, know that you are not required to obtain it from your lender. You have complete freedom to shop around and find a policy with the best premiums and terms for you.

How Mortgage Insurance Pays Out

A common misconception about both types of mortgage insurance is that they could deliver payouts to mortgage holders or their families. As was previously mentioned, mortgage default insurance is not even there to protect the buyer.

If you default on your mortgage, the policy will payout to your bank, protecting them from any potential losses. While reaching a 20% down payment can be a challenge given high real estate prices and living expenses, you are always better off avoiding mortgage default insurance.

Otherwise, you essentially end up throwing money away. The money you spend on insurance doesn’t protect you, doesn’t build equity in your home and will never yield any dividends.

Mortgage life insurance provided through lenders also does not yield monetary payouts for your family. This tends to be a surprise to home buyers given their general understanding of life insurance.

Decreasing Benefit

In this instance, let’s say your original mortgage is $300,000 and the premium is $20 a month. Let’s also assume you pay this premium for ten years. The amount left on the mortgage is now $200,000, and you have paid $2,400 into the life insurance policy.

Suddenly, something horrible happens to you or someone named on the mortgage. In the case of a traditional mortgage life insurance policy, you or your family members would receive $300,000.

In the case of a lender purchased the policy, the bank gets the payout and then covers the remaining $200,000 of your mortgage. This policy is what is called a “decreasing benefit,” which means it is essentially worth less the more money you pay into it.

Who’s Legally Allowed to Sell Mortgage Life Insurance?

A warning to those buying mortgage life insurance through their lending institution, lenders are not legally allowed to sell insurance. Selling insurance requires specific training and licencing, which lenders lack.

What your lender can do legally is ask pre-qualifying questions and collect premiums. If something happens to you or the mortgage holder, the insurance company reviews the claim and reserves the right to decline the claim. If your claim is declined, the lender will simply give you back the premium you paid them up to that point in time.

This situation is known as Post-Underwriting. This basically means that the actual insurer is collecting information about your insurability after the fact.

For these reasons, we recommend working with a broker or agent that can guarantee your death benefit.

To Sum It Up

Mortgage insurance is a confusing thing, especially since your unique circumstances will dictate whether you need to worry about it at all. The best thing you can do is educate yourself and know all your options. Try to put yourself in a situation where your insurance is protecting you, not your bank. We are here to help, let us take care of your mortgage insurance needs while you Enjoy the View!