{"id":19509,"date":"2020-09-09T05:00:00","date_gmt":"2020-09-09T09:00:00","guid":{"rendered":"https:\/\/lifeinsurance-orleans.ca\/Life-Insurance-Blog\/answering-the-call-for-customers-amid-covid-19\/"},"modified":"2020-09-09T05:00:00","modified_gmt":"2020-09-09T09:00:00","slug":"answering-the-call-for-customers-amid-covid-19","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2020\/09\/09\/answering-the-call-for-customers-amid-covid-19\/","title":{"rendered":"Answering the call for customers amid COVID-19"},"content":{"rendered":"
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Over the past few months, it\u2019s been all hands on deck for many companies in the insurance industry<\/a> as the COVID-19 outbreak cut off normal channels of applications, underwriting, and claims processing. And for the life insurance arm of one Big Six bank, recent activity numbers show how the pandemic hasn\u2019t slowed things down.<\/p>\n

\u201cIt\u2019s quite interesting,\u201d said Daniel Walsh, vice president, Business Development at BMO Life Assurance. \u201cIf you look at our recent third-quarter results, which include May, June, and July, we\u2019ve been able to put up similar numbers to what we saw during the same period last year, despite being in a pandemic.\u201d<\/p>\n

According to Walsh, the number of life insurance policies put in place by the bank-owned insurer during those three months substantially overlapped with the number that was seen for the third quarter of 2019. The total premiums consumers have invested in their insurance products have also been fairly stable, inching up 1.5% compared to last year.<\/p>\n

The number of life insurance applications received has also risen, with a modest bump of 7% over 2019, reflecting a steady and possibly even improved demand for life insurance products. That increase may lend itself to a further increase in new policies issued given the delay between application and approval \u2013 something that\u2019s to be expected, but BMO and its partners are also working to shorten.<\/p>\n

\u201cThe vast majority of our business is done through financial advisors, independent advisors, and managing general agencies,\u201d Walsh said. \u201cThe big change we\u2019ve seen during the COVID crisis is a substantial increase in the usage of electronic applications among our business partners. We\u2019ve also been operating virtually for a number of months, so we\u2019ve been forced to create new ways for Canadians and consumers to get their contracts.\u201d<\/p>\n

In the height of the COVID-19-imposed lockdowns, the paramedical companies that normally administer the tests and fluid collection necessary for most traditional life insurance policies were severely hamstrung. Because of that, Walsh said, BMO had to develop a more electronic approach, which included accommodating electronic signatures. And to cater to as many consumers as possible, he said numerous companies have raised their maximum coverage amounts and relaxed the eligibility requirements for no-medical life insurance.<\/p>\n

\u201cBecause the COVID crisis started mid-March, it forced us to react quickly in order to be able to allow advisors and Canadians to put their policies in force,\u201d Walsh said. \u201cThe insurance business as an industry has done quite a lot, I would say over recent months, to find ways to continue providing life insurance policies and ensuring their required coverage is in force.\u201d<\/p>\n

One segment of the Canadian population that\u2019s been heavily impacted by the pandemic is business owners, particularly as a slowdown in sales, continued need to pay fixed costs, and rising expenses related to compliance with new health and safety requirements, to name a few, present challenges to their liquidity. The federal government has deployed a raft of financial lifelines to help entrepreneurs stay afloat, but not all of those have been helpful \u2013 and where government aid has failed, certain types of life insurance coverage may help<\/a>.<\/p>\n

\u201cFor those business owners who already had coverage and insurance contracts in force for some time, particularly through permanent products like universal life or whole life, the ability to access the policy\u2019s cash value may be useful,\u201d Walsh said. \u201cIf their policy carries a cash value, they may be able to access those funds through partial withdrawals or take a policy loan directly from their insurance contract. Another option is to go to an external lending facility and pledge the value of that contract as a guarantee for a loan.\u201d<\/p>\n

Life insurance, used properly, can also function to help the continuity of a small business. One common application is for loan balance protection, which would protect the business in case of a premature death. There\u2019s also the use of key person insurance, which would protect the business against the financial risk of a key employee being lost.<\/p>\n

For businesses that don\u2019t operate as sole proprietorships, life insurance may also be used as a vehicle to fund buy-sell agreements. If one shareholder were to die prematurely, proceeds from a death-benefit payout would be used to fund the smooth transfer of their ownership interest to the surviving co-owners. In a similar fashion, a policy may be used to transfer the business\u2019s assets to the next generation of owners in the most tax-efficient way.<\/p>\n

\u201cEntrepreneurs and small-business owners work very hard to preserve their businesses, and they\u2019ve been fighting harder than ever in the context of COVID-19,\u201d Walsh said. \u201cFrom what we see, they realize more than ever the importance of being well covered by having insurance coverage in place. Even if they were not there anymore, at least insurance proceeds would be there to ensure some continuity in their business.\u201d<\/p>\n

In recognition of the struggles facing business owners and other in-force clients at the moment, he said the industry has provided premium-relief programs that allowed clients to defer the payment of their premiums, typically for up to 90 days. And as entrepreneurs tighten their belts and turn a more critical eye on costs, Walsh urged policyholders to pay attention to the overall premiums they pay and ensuring they have the proper coverage in place.<\/p>\n

\u201cAs long as they provide good information at the time of their application and there\u2019s no fraud at play \u2013 which is very rare, I must add \u2013 they\u2019ll have a valuable financial safety net that they can access in case of an emergency,\u201d he said. \u201cAs our CEO reminds us all the time, we\u2019re in the business of paying claims. That\u2019s what the policies are for.\u201d<\/p>\n

Read the original article at https:\/\/www.lifehealthpro.ca\/rss\/ <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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