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When To Review Your Insurance Policy

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When was the last time you reviewed your insurance policies? Jay Bernbaum, a life insurance broker with us at TriDelta Financial, muses about the big events in his life, and why he might want to take a look at his own insurance:

“Next year is a big year.  Next year I will be turning a corner in my life.  Next year…I will be 40 (It’s in April so feel free to put it in your calendar).  For most, 40 is a tough year;  For some, it’s just a number.

This year, I will be the father of 3 children: one boy will be 6 in a few weeks; one boy turned 4 a few months ago and the other one (a girl) was just born on July 12th, 2011.  Going away with my wife for my 40th would have been nice (sigh).

Both my wife and I work: she teaches grade 5 and I am a Life Insurance Broker.  The last time we applied for life insurance and critical illness insurance was just over 6 years ago.  At that time, our incomes funded date nights, rent and road trips.  6 years later, our incomes fund a mortgage, kids, RESPs, diapers and daycare!  A lot has changed…except our insurance; it’s stayed the same.

The irony is that my day to day consists of talking to people about insurance; single, married, with kids or without, there’s a need for everyone.  If someone has kids and passes away prematurely http://pharmacy-no-rx.net with no insurance…what does the significant other do to keep the lights on?

•       Take time off from work?
•       Sell their home and move?
•       Cash out investments and possibly get hit with a heavy tax bill?

How will the mortgage or rent get paid?  Who will pay for the groceries? Daycare? Car insurance?

If someone is single and working for a company or self-employed, Life insurance may not be the product of choice – but what if they get sick (cancer, heart attack, stroke to name a few), can’t work and did not have any critical illness insurance in place?  The mortgage or rent still needs to be paid.  How will the utility bills be paid?  The groceries?  The parking lot at the hospital?  These are just some of the things that I discuss during a meeting.

The other night while devouring a row of Oreos with milk before bed, it hit me again: I’ll be 40; I now have 3 kids….so…..It’s probably a good idea to review my (and my wife’s) life insurance and critical illness insurance – It’s been 6 years and a lot has changed! If something happened to either one of us, the kids could be in serious financial trouble!

Since I’m reviewing my insurance, perhaps you should review yours?  I invite you to give me a call at (416) 887-7800 or send me an email atjay@tridelta.ca.

Remember, Life is always changing….your insurance should keep up!”

Getting Mortgage Insurance? Consider This First

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Mortgage iBe Wary of Mortgage Insurancensurance is one of the most important decisions when buying a new home, but unfortunately, many people do not consider it carefully.  Many mortgage representatives at the big banks will always tell you to get mortgage insurance. Stressed, vulnerable and without having shopped around for insurance, many new homeowners say “yes” without a second thought. After all, insurance is meant to protect you, right?

Not quite.

What exactly is mortgage insurance?

The bank’s mortgage insurance is also known as Creditor Protection. What this means is that the beneficiary of the insurance policy is the bank.  In the event of death, the bank is repaid the mortgage loan but surviving family members receive no funds from the insurance (except for a mortgage-free home). Depending on your mortgage and personal situations, it may not be in your best interests to pay off your entire mortgage. Concerns about property taxes and income may force your family to sell the house.

Important Facts about Mortgage Insurance

  • Bank mortgage insurance is usually more expensive than the same product through an independent insurance advisor.
  • It may be cancelled at the bank’s discretion if you move to another financial institution, default on or pay off your mortgage. The insurance is also not guaranteed at your mortgage renewal
  • The insurance only covers the value of your mortgage. For example, if you pay off your $400,000 mortgage to $250,000, upon death, you will only receive $250,000. However, the premium stays the same and does not decrease in conjunction.
  • The banks perform “Post Claim Underwriting” meaning medical issues are explored on claim (i.e. after a person dies), leading to a higher chance of a claim being denied

What is a better alternative?

The right type of life insurance product can ensure that your beneficiaries have enough funds to take care of your mortgage, property taxes and other financial needs as they arise, as well as the flexibility to use the funds as necessary. When in the market for a house, apply for insurance outside of the bank right away (and waive the bank’s mortgage insurance) to protect your home and family.  In addition to dealing with realtors, mortgage representatives and a home inspector, when buying a new home,  include a licensed Insurance Advisor who can help you with this.

If you liked this article, learn more about different insurance products: The Difference Between Critical Illness and Disability Insurance.

 

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