Newsletter February 2019 (2)

I often write about Critical Illness Insurance because I like this policy. In order to illustrate the importance of such coverage I could share a lot of stories, after all I have been doing insurance for over 21 years. But probably the best thing to do is to tell my own story.

My fellow insurance agent received a call at his office, and the person on the other side says:

Hello Mr. Agent, this is Mr. Brian, your old client. We have been working together for many years, we have trust in your opinion and always listen to you considering all the insurance needs for our family.
I am currently calling from my family doctor’s office. We are discussing the results of my medical analysis that I have recently submitted. The doctor has informed me that I have cancer. He has told me about an insurance program called Critical Illness Insurance that will surely help me. Mr. Agent, do I have this coverage?

How do you think the insurance agent feel? Not so well, to say the least…

In 2004 I applied for Critical Illness Insurance with return of premium as I really like this plan: it protects the persons while they are alive, allowing an opportunity to receive back paid premiums if nothing happened during period of insurance in force.
I was planning to pay $300 and the insurance coverage was going to be fairly substantial.

Back then, due to slightly higher cholesterol level, insurance company has quoted me higher premiums. That was the first time when I discovered that I have higher cholesterol level. The company informed me that if within a year I lower my cholesterol level the premiums would also decrease.
I refused to pay higher premium for the whole year, corrected my diet and a year later applied for the same coverage with the same premium of $300.
Unfortunately through that year Critical Illness Insurance policy has gone through some major changes, more illnesses were added, better wording to the contracts and higher premiums. For the same $300 I was only able to purchase half the coverage meaning the premiums have more than doubled.

Why did I remember this now?

Exactly one year ago, in 2018, I had a heart attack. In previous years I have obtained three separate Critical Illness Insurance contracts (even though I never took any medications before and I had a low blood pressure), and all of them were paid to me 30 days after the diagnosis. One of these contracts was the one I received in 2005. Had I taken the contract in 2004, I would have paid a little more in the first year but would have received double the insurance amount now.

But 1.5 years prior to heart attack I obtained another contract and was paying the same $300 for 1.5 years. With this last contract total amount of insurance payout was more than 30 times of my premiums.
I can tell you with confidence it is much easier to stay off work with financial support and I had it. This money has seriously helped us with paying off debt that we accumulated during the renovation of our vacation property.

I would like to again direct this message to everybody without such contract – purchase yourself this insurance. This is a very interesting plan because it protects the persons and their whole family financially in case of an illness, this is very important. Today there are companies that can offer insurance coverage with any ongoing health issues. To check the prices on various insurance plans, including coverage on serious illnesses, please check the following link on our website – https://www.totrov.com/en/insurance-en/insurance-price-calculator/. And it is not important how much you earn, more or less – this contract is necessary for anybody. Even if the person who becomes sick does not have a job, it is possible that a person even with good income has to stop working. It may be necessary to take care of the sick person, so there will be financial effect either way.
I also like this insurance because the contract can be obtained with the following condition: if the person does not get sick, he/she is entitled to get back the premiums paid, ALL OF THEM!!!

So this is what I call the contract: guaranteed retirement savings program with insurance element. It is always easier to pay for insurance knowing that it is a savings plan and all the deposits will be returned back to you.

I wanted to share this information with you because it is very likely that there will be changes to critical illness insurance in the near future.

In May 2017, the government passed a law (The Genetic Non-Discrimination Act (Bill S-201)) which prohibits insurance companies any enquiries about results of genetic tests. What is this test? Genetic Test – is a test that analyses DNA in order to spot potential possible illnesses.

How does the insurance work today? We apply to the insurance company and sign a document allowing insurance company to examine our health records from the family doctor’s office and the Medical Information Bureau (MIB). Insurance company, knowing everything about us, decides on issuing coverage. The answer to the question when is the best time to obtain insurance is – a week prior to insurance incident. This is logical but we do not know the future.
What if the person knew, that a probability of encountering a certain illness is very high, what would that person do? He/she probably go and apply for an insurance contract. What if the insurance company knew about this probability? It would probably decline to issue such policy.

Let us now return to the law passed in 2017.
This law allows an individual to not disclose any potential problems, and insurance company is prohibited from enquiring about the results of such analysis or it will face penalties of up to one million dollars. This poses a certain risk for the insurance company – a substantial increase in number of insurance claims.
How do you think the insurance companies plan to react to this? Most likely by increasing premiums on insurance policy, or alternatively worsen conditions of coverage. Something is bound to change, and it is already being discussed. Today Canada is the only country where the premium under Critical Illness Insurance contract is guaranteed for the duration of the insurance policy. In all other countries insurance premiums can be increased if the insurance company is facing financial difficulties due to rising claims.

Why not receive such contract before the prices go up and conditions of the contracts change for the worse? If you already have such insurance for the nearest 10 years, it may be time to review the program before the changes are implemented and prices increase. My experience receiving insurance in the year 2004-2005 tells me that we may not be able to obtain the same coverage for the same premiums if we wait longer. You can share this information with anybody you think may be interested.

Serguei Totrov
Financial Advisor, CLU, EPC
Mortgage Broker, AMP
TOP – 75 Broker in Canada
in 2015, 2016, 2017, 2018
416-222-0533
www.totrov.com

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