Take The Time To Start Right

Published in September 2020

​Photo by Sonnie Hiles on Unsplash

This Fall, Canada Life has introduced a special promotion offering to pay three months of premium for new term life policies. ​This may be unprecedented in Canadian history and certainly comes at an opportune time. 

​If you're considering some new life insurance coverage now and feeling a bit challenged with cash flow,  or just like the deal, this could work for you very well. 

That being said, we suggest that you proceed with a look at the overall environment. Take the time to develop a solution tailored to your family and financial circumstances so this decision fits well into your family's plan for now and well into the future. 

To the residents of British Columbia, Canada Life will pay for three months of the premium due for qualifying term 20, term 30, and term to age 65 policies, including the additional benefits (riders) such as disability waiver, child rider, business growth protection rider, etc.

For a new policy to qualify, the client's application for the policy must be received by Dec. 1st, 2020. 

The client must pay the first premium to put the policy in force. Canada Life will pay the next three monthly premiums. 

If the client pays the annual premium amount upfront, Canada Life will refund 25% of that annual premium amount by cheque. Alternatively, the client can choose to pay only 3/4 of the annual premium amount at the start. ​The payment of the annual premium amount will resume in the following year. 

Term insurance suits everyone looking for shorter term coverage based on lower cost, fixed premium payments. Affordable life protection can be gained during those milestone years such as getting married, purchasing a home, raising children, or starting a new business. 

​That being said, if cash flow is really tight, you may want to start out with term 10 coverage because your premium payments will reduce to almost half as much per month for the same coverage amount over the next ten years when compared to term 20.

​If you are fit, or want to live a healthier lifestyle, perhaps you should look at Manulife's Vitality program which rewards you to lead an active daily lifestyle by reducing your premium payments for the following year. Many of our clients use their daily activities to save over 10% with Vitality.

Thinking and planning for the longer term but wanting to start with term insurance? Make sure that your selected term insurance solution can be converted to permanent, life-long coverage. Canada Life's offerings here, as well as many of Manulife's term solutions, come with the conversion-to-permanent insurance option built-in. 

While you're young, you might even want to start with a permanent, life-long policy from the beginning. The policy will become fully paid up after paying premiums for a set amount of years. From that point forward, the policy value and coverage amount will still continue to grow year over year without any further premium payments from you. You'll create a family asset that can positively impact your loved ones and business partners when the inevitable happens, bringing along many unique tax reductions, too.

Commonly, parents fund a policy that insures their children, especially when the grandchildren start arriving. Making the life insured as the contingent owner of that policy ensures an easy, tax-free policy ownership change down the road that can make a big difference at that later stage of life. 

By taking a few minutes to consider your personal and family goals, you'll be in a much better position to make the right choice.

Note: As you may have suspected, Legato has gone virtual and operates completely paperless now. This protects everyone during this period of COVID.  :-)  You can reach out to Legato directly or via Legato's safe, online application. 

Regards,
Don

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Don Anderson
Legato Wealth Management Inc.
Vancouver, British Columbia