Insurable Interest Canadian Insurance Blog

Staff  | August 26, 2019 Fewer than half (48 per cent) of employees said they believe their employers are invested in improving the employee experience, according to a new survey by U.S.-based cloud computing company ServiceNow Inc. The survey also found 61 per cent of respondents rated their employers poorly based on a negative experience with personal leave. And only 45 per cent said they feel their opinions and perspective matter to their employer. However, millennials (43 per cent) were more optimistic that their employers will address their feedback compared to baby boomers (35 per cent). Read: Well-being, technology among 2018 human resources trends: report As well, only 44 per cent of employees said their employers provide them with easy access to information from human resources and other departments. And, while 54 per cent of survey respondents said they expect their employers to offer mobile-optimized tools at work, the majority (67 per cent) reported it wasn’t easy to complete the necessary paperwork on a mobile device before their first day. The survey noted this is a missed opportunity for employers that haven’t introduced mobile self‑service to their workforce, especially for those aiming to retain and attract millennials, since more than half (59...

Life insurance has a long history in the U.S., and has earned a reputation that is built on security, stability and trust. Yet, despite the conservative, dependable nature of the industry, it is far from static. Much has changed since the mid-1800s, when some of the big names that persist to this day — including Guardian Life, MassMutual, MetLife and New York Life — put down roots and dispersed agents to sell policies designed to ensure the financial well-being of “widows and orphans.” Today, change and modernization in the industry are of the essence. Spurred by new product lines and innovative uses for those products, as well as by the whirlwind of advancing technology, the industry is like a mythical shapeshifter, constantly adjusting to market forces and consumer needs. Add important ethical concerns, demographic changes and frequent legislative and regulatory shakeups to this picture, and the need for engaged, educated insurance professionals to guide consumers along their paths to financial security is apparent. Keeping up with this ever-present change is a key point in the job description of every advisor. Continuing Education Requirements Every state insurance commission recognizes the need for highly trained and educated insurance professionals and has set...

Similar to the safety instructions you receive on an airplane, advisors must help themselves before they help others. Our own personal financial planning can strengthen our extensive knowledge of product solutions and lead to more informed recommendations for our clients. Practicing what you advise leads to authenticity, and guides you and your clients toward the individual legacies you want to leave for your families. Insure Yourself Life insurance is the oxygen of financial planning, and an advisor who recommends life insurance products to clients should be well-insured. Insuring yourself puts you in a better ethical position because you are able to speak to the products, the facts and the consequences from a personal point of view as well as improve your professional knowledge, skills and competence. Annual Reviews Clients often hesitate to purchase the full amount of suggested life insurance coverage, despite your initial analysis and recommendations. If you were to conduct an audit, you would also find most advisors do not have enough coverage on their own lives. We are experts on life insurance! If we don’t adhere to our own guidelines, imagine how clients can incorrectly perceive the proper amount of coverage despite our efforts. Hold yourself accountable,...

It’s a well-known fact that you must build relationships in order to establish a solid client base. However, cultivating client relationships in a rural, agriculture-based community can present a notable challenge. I’ve discovered, though, that if you strive to meet your clients on their own terms, you can learn their needs and provide effective solutions on a professional and personal level, no matter the market niche. Five years ago, I started my own agency from scratch in a rural Montana town of 2,500 people. Even though it was such a small market, there were already seven other insurance agencies in town. Plus, I didn’t have a background in insurance. But I knew it was what I wanted to do and what the community needed, so I bet on myself and got to work. I bought a rundown building and moved my kitchen table in as a desk. People told me that I couldn’t just start from scratch — I would have to buy a book of business and move in with an existing practice. Despite their doubt, I qualified for Million Dollar Round Table in the first year and have qualified every year after that. Now, I have a successful...

Eating out can be expensive. Eating at home is less costly, but you must put the time and effort into making it happen. Entertaining at home might involve having the relatives over for a holiday meal, getting the neighbors together or inviting your spin class friends.  Wonder why people don’t do more of these dinners? Because most people think they are hard to pull off. But they can be easier than you think. You will be concerned with four aspects of the meal: inviting people, setting the stage, drinks beforehand and the meal itself. This article explains the basics, but you might find this book useful: Brunch Is Hell: How To Save The World By Throwing A Dinner Party by Rico Gagliano and Brendan Francis Newnam. Inviting People Your objective is to get people to commit and show up at the appointed time. Assuming your dinner party has six guests total, you and your spouse or partner are probably inviting two other couples. Casual verbal invites like “We’re having some people over the Friday after next …” are problematic because people are busy. They forget things. An email extending an invitation is fine. Texts work, too. Written notes have staying...

“Money often costs too much,” said Ralph Waldo Emerson. For advisors looking to make a move, there could be any number of factors prompting the search for greener pastures. Do any of the following resonate? You’ve outgrown your firm. Your current firm continues to mandate cross referrals, more product sales or partnering with other lines of business. They cut your payout grids or created minimum account levels. They change (seemingly) just for change’s sake, and it is tough to understand the value of those changes to the client or the advisor. Your current firm does not offer a full suite of products or services for you to truly take care of your clients. You’re looking for entrepreneurial freedom to manage your practice with the expertise you’ve spent years developing. The decision to transition your business is not to be taken lightly. In the same way you holistically evaluate wealth management strategies for your clients, so should you consider a transition of your business. You will likely entertain several opportunities and quickly feel like an all-star athlete who just hit the free agency market. Pause: This is where you should be careful of the blinding effect of the money, deal structures...

One of the most important aspects of any long-term care insurance policy or linked benefit rider is the claims payment methodology. From our perspective as a product wholesaler, the questions most often asked by agents are all about the product’s cost and overall level of benefits. We rarely get questions about the difference between indemnity versus reimbursement method products, which is ironic because this is where the differences show up when a claim is made. When it comes to indemnity versus reimbursement products, carriers sell either one type of product or the other, and they do not offer the option of switching from one model to another. There isn’t any difference in price between a product with a reimbursement model and one under the indemnity model. Carriers’ actuaries use many factors to price their products.  Those of you who have been selling stand-alone LTCi for decades are probably aware that most, if not all, of those policies follow the reimbursement method of claims payment. This means that when the insured person qualifies for the policy’s benefits by meeting two out of six activities of daily living requirements, the insured’s family will now need to understand how to submit bills for...

If you want to convince someone of the need for an annuity, position it as part of a strategy instead of merely presenting it as a product. That was one takeaway for advisors after the fifth annual Guaranteed Lifetime Income Survey showed a gap between what consumers think of annuities and what advisors are telling them about retirement income solutions. The survey was conducted by Greenwald & Associates and CANNEX. The big difference between the 2019 survey and those of prior years was that 2019 marked the first year in which the researchers studied advisors in addition to consumers. Prior surveys focused on  consumers only. The study showed strong consumer interest in guaranteed lifetime income, with more than two-thirds saying they saw a high value in having such income on top of Social Security. Despite the value consumers place on having retirement income they can’t outlive, some of them still balk when the word “annuity” is mentioned. The study found 35% of consumers would be less interested in a product offering guaranteed income if it were labeled as an annuity than they would if offered an unnamed product that offered the same benefit. So what can advisors do to keep...

Do-it-yourself estate planning is officially a thing. Thanks to the internet, everyone has the ability to draft wills, trusts and a variety of other legal documents. Many documents can be produced for less than $100, requiring only a few mouse clicks and filled-in blanks. The lure of simplicity, speed and affordability is appealing. It’s no wonder LegalZoom, the largest online legal document provider, was valued at $2 billion in 2018, according to Bloomberg. That growth has been nothing short of amazing when you consider Forbes reported LegalZoom launched in 1999 with a $1 million initial capital investment — not bad for a self-service business model. As an advanced-planning attorney, I review legal documents in conjunction with a client’s consultation with a financial professional concerning the potential uses of life insurance. Over the past decade, I have reviewed more than 2,000 estate-planning legal documents, and I can report that the DIY revolution is in full swing. I have seen a significant increase in DIY estate-planning documents crossing my desk. It has easily been a five-fold increase. I have also seen an increase in estate-planning glitches. When it comes to DIY estate planning, I have two words of wisdom: User beware. A...

Guy Baker was becoming frustrated as he tried to educate the five members of a CPA firm on the value of buying life insurance to fund a buy/sell agreement. The CPAs were having a difficult time understanding what he was attempting to explain to them. The whole presentation could have imploded, but Baker was resourceful. He asked the CPAs, “Do you guys really know how life insurance works?” They looked at him blankly and said no. “So they had a tablet on the wall and I walked over to the tablet and taught them CLU Part 1,” he recalled. “And when I was finished, they said, ‘OK, let’s do it!’ I said, ‘Do what?’ And they said, ‘Buy the insurance!’” “And I thought, ‘Hmmm, maybe there is something more to this than I think.’” Soon afterward, Baker had lunch with a life insurance prospect and taught her the same concept that won the sale with the CPAs. Within five minutes, she agreed to buy the coverage. And so The Box was born. Baker took his presentation and turned it into a booklet called The Box, a guide to the basic mathematics of life insurance. The Box has sold 500,000 copies....