The moment you own a car, you have the risk of it being stolen, lost in fire or vandalized. Once you start driving it, there is the risk of damaging your own car, others property, injuring or causing death of another individual or yourself.

In the province of Ontario, the government requires you as a member of the society to take on certain responsibilities. It has made it mandatory to carry a certain amount of insurance. The Government requires you to carry liability coverage to make sure that you have the money to pay for losses (eg. property damage, injury, death) you might cause to others while driving. The Government also requires you to carry basic accident benefit coverage to cover your own medical expenses and loss of income resulting from injuries caused by a car accident.

Physical damage of your car which is covered under your collision and comprehensive coverage is optional. If you so choose, you could transfer these risks to the insurance company also. On the other hand, if you lease or take a loan against your vehicle, your leasing or financing company will require you to carry physical damage coverage which is referred to as collision and comprehensive. The leasing and financing companies want to make sure that their money is guaranteed by the insurance company in case of physical damage.

Home Insurance

When you own a home, there is always a risk that it can be damaged or destroyed by fire, windstorm, hail, falling objects like trees, aircrafts, water damage due to rupture of water pipes, sewer backup, vandalism, theft/break in etc. You can buy an insurance product to transfer your risks to the insurance company. Now, if you have a mortgage on the house you don’t have a choice. Your lender wants to make sure that you have insurance to get the house replaced or repaired. Your risk in the house is up to the amount of equity in the house. The rest of the risk is the lender’s. They want to make sure that you protect their risk/interest.

What are the Coverages?

Dwelling/Building:

This is the coverage amount you need to rebuild/replace your home in a total loss. This amount includes debris removal. The insurance company evaluates this coverage amount by taking the information from you regarding the house. For the evaluation they need to know the square footage of your home, the number of washrooms, type of built, age of the house, features like number of garages, number of washrooms, whether the basement is finished or unfinished, types of flooring etc. This evaluated amount called the Dwelling or building coverages is the replacement value of your house. This dwelling value does not include the land value and is not the market or resale value of the house. Once you have accepted the replacement value as evaluated by the insurance company, the company will guarantee the replacement of the house. What that means is that the insurance company, at the time of a covered loss, will replace the house even if it costs them more than the evaluated dwelling coverage. For example if the evaluation of your house is at $300,000 and it costs the insurance company $350,000 to replace the house at the time of the covered loss, they will not ask you for an extra $50,000 to replace the house. Rest of the coverages are a percentage of the main dwelling coverage.

Detached/Private Structures:

This coverage applies to all structures other than the main building. For example fence, tool shed, gazebo etc.

Contents:

This coverage applies to all your furniture and household stuff. For example sofas, TVs, clothing, dining set etc. There are special limits for jewelry, furs, silverware, cash as well as some other items. Please refer to your policy for the special limits as these vary from company to company and policy form to policy form.

Additional Living Expenses:

This provides coverage for any additional expense you might incur after a covered loss. For example, living in a hotel or renting another house while your house is being repaired or rebuilt after a covered loss.

Liability:

This coverage protects you if others sue you for damage or losses (property damage, injury, death) they suffer on your property for which you are legally responsible. Your insurance company will pay for your legal defense costs and pay others up to your liability coverage limit if you are found legally responsible. For example, the mail man comes on your property and you have not cleared the snow and he/she slips and falls and is injured.

Endorsements:

There are other endorsements like sewer back up, single limit of insurance that can be added to your policy.

​What is life insurance?

It is a product which is available to cover a lump sum amount which is payable to your designated beneficiary if you die. It is called the death benefit. This Tax Free amount does not serve you, but it serves your dependents whom you leave behind. There is no amount that can replace you. We can’t even imagine a spouse or child left behind who would prefer any amount over you, it is just the hard reality of life.

Why do I need Life Insurance?

Getting Life Insurance coverage is the most selfless thing you can do in life. You get life insurance to protect the people you love and most importantly the people who are financially dependent on you.

This could be your spouse, children or your elderly parents or anyone else who is important to you. You are the only person who can decide how important these people are and how well you want to take care of them in the event of your death. Is there a risk of death? Absolutely. One hundred percent. This is one thing that you can say with absolute certainty. The only uncertainty is the time. Life insurance is the only coverage, which keeps getting expensive as you get older and if your health declines. The best time to get your life insurance is in your younger, healthier years. You have to find a reason to get life insurance.

What are my reasons for getting Life Insurance Coverage?

Your reason could be different and unique, but it could also be one of the common reasons why other people get life insurance coverage. Find the reason which touches your soul.

• • You get married- Your spouse becomes a reason.
  • You have a baby- Your baby becomes a reason.
  • You buy a house- Your mortgage protection becomes a reason.
  • You are elderly- Your final expenses (funeral, taxes, out standing loans/debts) become a reason. You do not want to be a financial burden on anyone.
  • You start a business- Your business continuity becomes a reason.
  • You have accumulated a lot of wealth- Your estate conservation becomes your reason. At time of death, capital gains tax could significantly deplete your estate.
  • You prepare a financial road map- Your final destination or goal becomes a reason.
  • You support a charity- Your final donation could become a reason.
  • You have elderly parents-Your reason becomes to ensure that you have funds to fulfill their last wishes.
  • You are planning your retirement-Your extra cash at retirement becomes a reason.
  • You are a grandparent-Your grandchildren become a reason.

How much Life Insurance do I need?

There are different ways of calculating the amount of insurance and coverage you need. As life progresses, your needs change so it is impossible to be 100% accurate. That is why we recommend that you review your existing life insurance coverage regularly.

The simplest way to calculate is to figure out the amount of money required to replace the income lost after your death, plus the final expenses (your funeral costs, outstanding taxes/loans/debts etc). For example you make $50,000 per year and you expect final expenses to be $50,000. Let’s say you could get 10% interest if you have a safe investment in a bank GIC. Now if you invest $500,000 in a bank GIC, at 10% interest rate, you should earn $50,000 a year. So the amount of insurance you need is the amount needed for investment plus final expenses. ($500,000 plus $50,000= $550,000). This would cover your needs as of today. You could increase this amount to take care of inflation or increase in expenses.

What are the types of Life Insurance?

Term Life Insurance:

This type of insurance covers your risks for specified number of years. It could be a 5, 10 or 20 year term. You can renew these terms at a higher premium up to age 70 or 75. The coverage cannot be extended beyond that age. Companies will allow you to convert these policies to a permanent plan up to a certain age. This is the most inexpensive way to cover your risk for the short term.

Permanent Life Insurance:

There are different types of permanent plans. These plans go to age hundred. It means that if you continue to pay your premiums, your beneficiary will get the amount insured for sure. Most of these plans will also have cash value which you can get when you cancel the policy.

What type of Insurance should I get? Term or Permanent?

This is a very common question asked by people. You have to really think that through before you make a decision. Getting life insurance is the most selfless action you take in life. So keep it selfless when you make this decision and focus on the reasons for which you are getting this coverage. If you do that, you will make the right decision.

Once we have our eyes on the reasons, the next most important thing to consider is affordability. What ever you do, the cost for the coverage has to be within your budget. If your reason is strong enough, you’ll find a way to budget the cost. The way I explain the difference between getting term or permanent insurance is like renting a house or buying one. When you rent, all you have to worry about is the rent. No other expenses. For short term, it is much cheaper than buying. After 10, 20, or 30 years of renting, you walk away with nothing. This is what you could afford in your budget. You still rented a house to live in and didn’t live on the streets. This is term insurance.

On the other hand, when you buy a house your expenses are much higher in the short term. For example when you purchase a home you need a down payment, you are making payment for the mortgage, property taxes, pay for utilities, maintenance and up keep of the house and house insurance. Although you pay much more when you own a house, but you know that after 20-25 years, the house is yours. You’ll still continue paying the other expenses, but your major expense of the mortgage payment will be finished. You own your house! This is permanent insurance. Similarly, you own your life insurance policy after 20-25 years if it is set up properly.

So what is best for you? The plan that gives you the coverage at a cost that fits your budget is the plan you should get. It could be term insurance only or permanent insurance only. It could be a combination of the two. For the long term needs you get permanent coverage and term insurance for the short term needs. If one of your reasons is to protect you mortgage, then you might want to get a 20-25 year term insurance to cover that.

Once you have a reason and a need, we can help you find the right insurance product to cover that need.

​What is critical illness insurance?

Anyone can get critically ill. In fact,the chance of you becoming critically ill is higher than you dying before the age of 75. The majority of Canadians will fully recover from a critical illness, thanks to the Medical advancements.

What are the types of Critical Illness insurance?

Just like life insurance, Critical Illness Insurance has term and permanent insurance plans. The plans come with different features
Eg. If you die for a reason other than covered in your policy, the premium you paid may be refunded to your beneficiary,
Some plans will refund a portion or the entire premium to you if you stay healthy and never get critically ill.