The TK Advisor - The TK Group Ottawa Blog about Life Insurance, Critical Illness Insurance, Wealth Mangement and Estate Planning

True Insurance Broker , do you work with one ?

The consumer has a problem differentiating those individuals that are truly giving them products from a number of insurers vs one or maybe two . The insurance industry has different distribution systems with a captive producer that generally sells product from one specific insurer and the other side is a broker who represents a number of insurers . At the first glance , broker deal would look to be a better option for the client . It is only a better option if the individual is working as a "true" broker and representing a number of insurers .The reason you want to deal with true brokers is because as there are different insurers there are a variety of products . Some insurers focus their market on term products while others on whole life or universal life. The difference in premium between insurers can sometimes be small however on a permanent product they can be substantial . When analyzing product , premium is not the only component . If a permanent product is being looked at , cost of insurance can vary into thousands of dollars from one insurer to the next .When analyzing a product like Universal Life , a number of items have to be looked at and on the illustration received things like interest rate assumptions have to be looked at . Guarantees are very important in a permanent product , is your cost of insurance guaranteed level or does it increase each year . A true broker will show you products from at least three insurers and you will be surprised to find that there are differences . Some insurers will give a cheaper rate to cigar smokers then other insurers . When you have a health condition that you may think will prevent you from obtaining coverage , call a broker who will present you to a number of insurer . On a difficult case , we presented a client to 12 insurers in Canada and finally got one offer . We have submitted multiple applications on clients with varied results : Declined , 200 percent extra premiums and standard offer for the same individuals. Taking multiple applications is a great deal of work for us but this is one of the ways we can be certain that the client is going to get the best possible offer . If the broker has high production volumes , he or she will get the services of the high level underwriter at the insurance company which gives the client the best possible chance to secure a favorable underwriting decision . There are a number of very diligent people in our industry that value their client relationships and look for one of those to work with.

A true broker represents you and will

Critical Illness Insurance

Why have most Canadians overlooked this product which has been designed to meet the needs of : corporations and individuals ?

Critical Illness insurance in my estimation is the best product that I have seen in my 26 years of serving the insurance needs of corporate as well as professional clients ? Why ? It provides cash to those that need it the most . When ? After the insured survives a listed condition for 30 days  ,the policy pays out a lump sum of cash to the corporation or the insured individual.

With average waiting period to see a specialist in Ontario being over 16 weeks , it is easy to see the need for this product that provides cash to take you for treatment anywhere in the world . The payout can be used for whatever the recipient wants and it should   be customized to meet the specific need .

There are tax advantages that can be obtained in the corporate setting with this product and an experienced insurance adviser can explain the structure which must be followed to you .

All policies are not the same so be certain your adviser is a broker who is able to demonstrate different  policy designs as well contractual obligations under various insurers .

Critical Illness insurers protects your wealth and provides you with options if you are stricken with one of the condition that is covered under the contract . Three main payouts under this policy are for : heart attack , stroke and cancer . The payout that is most seen at claim time for men is heart attack and cancer . The policies pay out mostly for cancer and MS for females .

This year we delivered a $ 500,000 cheque to a client that has survived a critical illness and is now back to work . This product is not the same as the disability product which pays you if you are unable to work .

This is a excellent product that I feel is designed to be of exceptional value not only for individuals but also corporations .

Insurance audit can save you thousands of dollars

You may be asking yourself , why should I take my valuable time to complete an Insurance Audit ? Because it saves you premium dollars and taxes  !

I can easily say that 8 out of 10 corporate/professional clients have never closely examined the products they bought and have not taken the time to see how these products integrate into their personal situation .

Here are only a few "nightmares we have discovered while working with various clients. When begin our insurance audit , we ask for all contracts the client has as well as to think of any other coverages they have where they do not have actual contracts.    A number of times we are given a folder of documents to review and try to determine which policies are still in place . Also , on a number of occasions we review clients bank statements to determine if automatic withdrawals can lead us to contracts the client has forgotten they have . When we have completed our work , the client has a accurate record of what is in place and with which insurer .

On one file we uncovered that the client had over 20 thousand dollars in premiums being paid for policies he forgot he had to protect business deals that were long a go terminated .

On one occasion , the client had a large corporate life policy where the corporation was the premium payer as well as owner but beneficiaries were individual shareholders . On death of that client , CRA would consider the death benefit as a taxable benefit to each shareholder.

We have a client for which our firm was doing work in the area of Employee Benefits and I was brought in to do an audit on personal insurance for the  President/CEO as well as corporate  life insurance coverages . We discovered that the client was an occasional cigar smoker and a year previously policies were issued for: corporate life insurance , personal life insurance and  Key Person critical illness insurance . All the policies were placed with insurers that charged premiums which were same as a regular cigarette smoker . We were able to save this client over 30 thousand dollars in premium by switching the client to a insurer that gave better rates to occasional  cigar smokers. In addition to this there were 2 life policies issued one was corporate and the other was individual . Corporate policy , owner and premium payer was the corporation but the beneficiary was the clients wife . Corporate CFO had to add the premiums paid by the corporation as a taxable benefit to the president . We changed the corporate contract to reflect the structure it should have been created under at time of issue . When examining the Presidents personal policy , the client owned it as well as paid for it with after tax dollars and to our shock  ,the beneficiary was the " corporation".   

These are only a few "nightmares" we uncovered with our audits and our mission is to help corporations as well as professionals get maximum return for their premium dollars  .  Accountant and lawyers have come to depend on us to provide their clients with competent advice and protect the clients interests. 

We do not charge clients for insurance audits because when we demonstrate the value the clients chose to build a relationship  with us which is based on trust , knowledge and high service standards. 

Working with competent independent insurance specialists provides you with MAXIMUM return on your time as well as premium dollars .

CAN YOU TAKE A CHANCE WITH YOUR FUTURE BY NOT TAKING THE TIME TO DO THE INSURANCE AUDIT ?????????????????????????????????????????????                           

Helping our Clients Navigate Their Way to Success

The following document is an insightful, useful and efficient communication platform designed by Bessner Gally Kreisman to address developmental aspects in financing, accounting, planning and consulting.

Download news_and_views_oct07.pdf

Denied Life Insurance or Paying Extra Premiums for your existing coverage !

There are many people who have been lead to believe that they can not get life coverage or need to pay extra premiums due to:current or past health condition ,foreign travel, sports activities or past lifestyle choices .

Recently we were introduced to a professional client who was lead to believe that he can not obtain coverage due to Chrons's disease. We completed multiple applications and secured coverage on a standard basis without extra premiums . We also secured life insurance coverage for an individual who had cancer 6 years prior and were successful to have a 1 million life insurance policy issued without a rating. We were successful issuing a 1 million dollar policy for a client who needed the coverage to secure a 10 million loan from one of the banks and we did so by applying to 12 insurers .

A number of our clients travel to places like Israel , India and other less then desirable countries for insurers who are asked to issue a policy on a Canadian resident . We have a superior working relationship with insurers and this enabled our clients to obtain life products without exclusions or rating.

One of our corporate clients had just bought a racing car which he was going to race on weekends . We were able to secure coverage with two options : 5 dollar per thousand rating or standard premiums without coverage when he is on a race track.

Over the last 26 years in the business , recreational drugs and insurance underwriting has been a reality that we have had to learn to work with . While certain drugs are an automatic decline for coverage ,with full disclosure and building a case for the insurance underwriter we have been able to secure coverage for people that would never be accepted otherwise .

Even though we have senior underwriters work on our files , the decision to accept or not accept the risk has been one where we are never absolutely certain which insurer will win the clients business . Writing multiple applications on clients is very time consuming and some insurers "REFUSE" to take a application on a client who has applied elsewhere .

I opened up my company over 20 years a go to give my clients better value by being a independent producer representing a number of companies. There are still individuals out there that chose to represent one insurer and will look at another when they  "feel "that they "have to" . Do yourself a favor , complete an Insurance Audit with an independent adviser to confirm that in fact your coverage is what you think it is and that it meets your needs .

Estate Planning , Do you need it ???????

Some people think that Estate Planning is only valuable for the rich and many times will not think of engaging in the process of organizing their affairs.Also , people think that Estate Planning is death planning so they avoid it all together.

Estate Plan can be fairly straight forward or complex. The magnitude of the Estate Planning process is dependent on a number of considerations : nature of assets that are owned ,family situation , business considerations , residence status of beneficiaries ,charitable;e donations , shareholder or partnership considerations are some items to look at .

Will planning should be the first consideration that needs attention. Personal as well as a business will has to be considered for anyone involved in a business arrangement. Power of Attorney should be created so that if an individual is incapacitated , there is a chosen individual who can act on behalf of a disabled person.

Shareholder or Partnership agreements should be created for anyone that has business interest with partners . Even if spouses own the business together they should have a shareholder agreement implemented .Some agreements have been in place a long time and they need to be reviewed . We have also met business owners who have gone to the expense of creating a shareholder agreements but did not bother to sign the document.

Trusts are convenient vehicles that have many purposes but individuals have not either been told how they can benefit them or they have decided that they do not want to set one up due to various reasons . In a proper situation the cost of setting up and maintaining a trust is very small when considering the benefit , it is like a pimple on an elephants behind .

Insurance audit has to be completed to ensure that existing contracts are properly created to protect all parties and not create a taxable event . Operating company, holding company ,partnership ,trust and or individuals can own policies . The best way to know how to structure your insurance programs is working with professionals who work within a team environment to provide you with integrated financial advice.

Properly created Estate Plan will give you tax efficiency ,peace of mind , harmony in family and meets your wishes.

10 Mistake Buisiness Owners and Professionals Make

They believe that they are not  "big" enough to plan so they will wait until they have more assets !

Focus all their attention on working in the business rather then on the business !

They believe that competent professional advice is too expensive and what they have is " good enough " !

Financial advisor's they have come to know do not provide them with unbiased products from a number of leading suppliers !

They do not take the time to fully understand the product and services they need to seek out !

They do not take time to create a written plan or a road map which needs to be reviewed on a regular basis .

They overlook the tax planning and do not think that their work would qualify for R&D Credits !

They do not have a advisory team of professionals that work together serving their distinct needs.

They do not involve family members  and other stake holders in the planning process !

They are huge procrastinators when taking care of their personal needs !

Holiday season may be a good time to review your financial instruments !Life Insurance , Critical Illness Insurance , Disability Insurance and Long Term Care

Your year is almost coming to an end when we all enjoy the festive holiday season . Like many entrepreneurs and professionals , the song said " I've been everywhere man I've been everywhere  ". Our business and personal lives are so intertwined that we sometimes forget to take the time to think about ourselves . As a business owner , I seam to be on a constant alert to solve my clients problems and make sure I have done everything to take care of them . Like me , I work with a number of legal and accounting advisor's that are highly motivated to serve their clients .

This may be a good time for busy people to take stock of their own personal situation . How important are you in the big picture of your world ? How important is your family ?

Without you , everything else can fall apart at the seams . I know that you hate looking at insurance because of the connotations that the word "insurance" brings . Think of the word "financial protection " instead of insurance . How important is your financial protection ? Dust off all those insurance contracts , if you can find them , and look at your safety net . Are the contracts in place ? Are the right beneficiaries designated in the contract ? Are you sure that group disability policy is not discriminating against you the executive ? Do you have enough cash to recover from a critical illness ? Are you paying for policies that are useless ? Have you thought about what would happen to you if your spouse became critically ill ? Have you coordinated your contracts with your existing corporate structures ?

Why has another year gone by where you have not taken care of the most important persons needs ? You are that person and take a moment to reflect , what if ?????????????????

Do not buy insurance buy freedom instead ?

Insurance coverage is not what you need and you already know that .What you need is cash to take care of your heirs when you die , take care of you and your family at time of disability and or critical illness .

Just today I was delivering a critical illness policy to my client when he asked me if a mutual of acquaintance of ours has critical illness coverage . I asked him why he is asking me that and he said that the individual has to undergo a triple bypass.

Can you , your family and your business survive a major illness ? This illness is not just yours but everyone else's who depends on you.

You are absolutely correct when you say that you can be over insured however I have never heard anyone say that the cheque we delivered on death , disability or critical illness was too much . I have heard though , I wish we would have bought more .

Never lose sight why you would want to buy protection : freedom , comfort ,safety , business continuance ,education ,standard of living , immediate medical treatment anywhere , business relief ,you love someone , estate preservation , keeping family united are only a few reasons !

Insurance Premiums can be costly and they differ from one insurer to another

So you think there is not much difference in premium from one insurer to the next . Think again ! With todays information age one would think that insurers would be close in their premium structure for same type of product . We are just completing an insurance audit for a client that bought policies 5 years a go and has not seen his adviser since that time . The client currently has a 10 year Renewable and Convertible term policy with Standard Life . The client needs permanent coverage and requested that we convert his existing policy to a minimum funded Universal Life plan . Easy thing to do was to fill out a conversion form and without medicals the policy gets delivered in a week or two . We asked the client how was his health and he said no issues that he knows about . We decided that the hustle free conversion root was not what we do and we put the conversion on hold . Why ? Research was needed into what our new found client could obtain in premiums with proof of good health . Yes he is going to save money !

Here is a list of premiums on a 1 Million of  coverage which includes Standard Life conversion he would get by filling out a form .

Monthly Premiums : Sun Life  $ 727.04 , ManuLife $ 759.22 , Industrial Alliance $769.39 , Great West Life $ 786.56 ,Transamerica Life $ 795.83 , Empire $801.83 ,AIG $ 839.29 And Standard Life $ 931.97 .

Easy thing would have been just to fill out the form and go on with our lives . When the client is in good health , always apply with a insurer that gives more favorable rates . We as independent advisor's never know which insurer will be competitive at a given client's age .

Insurance Rates , insurance coverage and insurance company underwriting standards differ from one insurer to the next.