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My Blog


Online Insurance Purchases--Convenient, But Not Always as Expected

Posted on November 16, 2015 at 8:19 PM Comments comments (4)
As more things are done online, the convenience is undeniable.  If you don't have to schedule an appointment to make a purchase, take time out, drive to a location and sit (sometimes uncomfortably) with a stranger, why bother?  If you're an early riser or a night owl, why try to fit your needs within certain work hours?

I had a client ask me a couple of months back to quote her some permanent insurance for her and her spouse.  They were just looking for funeral coverage.  I did my research and got back to her with some quotes.  She thanked me and said she would discuss with her husband, then let me know. 

After 3 weeks had passed, I contacted her and was told they would leave it for now as the cost was higher than she anticipated.  I followed up today to discover that she had purchased  online for both of them and the price she told me was shockingly low for a permanent solution.   

I look at some of these for comparison from time to time and in my mind there was just no way.  I went to the company site she purchased from, input their info and got higher rates than I had quoted.  I looked at the product and they got less options than what I offered.  They would be paying premiums for an extra 7 and 12 years longer than what I had quoted.  Confused by this, I called her again to tell her the numbers I got.  She had one of the policies handy and looked at the details.  She had purchased 10yr terms for both of them.  I asked her to look at the renewal rates in 10yrs (something I discuss with each client who purchases from me), and she was shocked at how much the increase would be.  Not only that, but the product would run out 3 yrs after renewal for her husband as it could not be carried on past age 80.  This product was not convertible to a permanent solution either so they would be stuck with no insurance if they had longevity past age 80. 

His renewal would be 10 times the premium he's paying now.  While not unusual, this is not something they looked at with an online purchase.  They had conveniently purchased this product that does not address their needs the way they expect. I could have also sold them a 10yr term, but the renewal rates would be discussed in detail. Also, I would have sold them a policy with the option to convert to a permanent solution before age 70. The exercising of this option would have been discussed so they won't possibly outlive their coverage.

Am I saying that online purchases are a bad thing?  Of course not.  I have bought things online myself....T-shirts, hats, cell phone cases, airline and concert tickets etc.  There are some things that I won't buy least not without an expert with whom I have established some trust. Vehicles, houses and life insurance (not without knowing the products well). 

When purchasing a vehicle, I need to sit in it and see how I fit.  I needs to feel the layout and the convenience of reaching accessories and pedals.  When purchasing a house, I want to walk in it (or the show-home if building).  I want to get a better sense of layout and feel.  When i'm buying home and auto insurance (I won't use life insurance since this is my wheelhouse), I want to speak with a broker who can explain the product to me. I do not buy online without consultation because I recognize that even though convenient, there are times I need things explained with more detail than offered or put in everyday terms.  For such things, I prefer to speak with someone who can answer my questions.  Again, this works quite well for some and that's great. 

I recognize that this is a personal decision and many will disagree.  There are many who make these purchases and are quite happy that way. I have family members who purchase shoes online and it works quite well for them.  My point is that depending on what you need, this can work well for some.  I have an odd fit so everything needs to be tried on.  While the online purchase would be convenient, it would not properly suit my longer term need...pain, possible blisters etc could be some convenience side effects.  

With insurance, I let my clients know what they're purchasing.  Will it do for you what you need now and down the road?  While this may make a sale take longer, I feel educating my clients with this process works out better for them and for me.  Is that as convenient as buying online?  Definitely not.  Is the time worth the process for something so important?
Let me be clear.  I have participated in online sales with my clients.  It can be an awesome tool for the busy or inconveniently located person. I explain options and help in the proper product selection and placement.  An online platform in such a situation works very well for us, be it someone in a remote location, different city or just too busy to physically get together.
I help clients make the proper, customized purchase for their situation.  I will place insurance that covers the needs now and offers viable options in the future.  This may be less convenient, but it is quite likely you will get a better fit.
I look forward to helping you take care of your insurance or in person.


Posted on November 22, 2013 at 10:31 AM Comments comments (7)
I have been very vocal of late on Critical Illness Insurance.  The statistics are staggering.  It is said that 1 in 3 Canadians will suffer a critical illness in their lifetime.  Look at the people in your home or place of work.  Which one of you out of every 3 persons could it happen to?
It doesn't just affect the life of the person who's ill; it affects their loved ones as well.  I've heard a lot of folks say "Well i have benefits at work so i'm ok."  Let's examine that.  If you have specific critical Illness Insurance then good.  It provides a lump sum if the severity of your illness meets the definitions.  If you do have disability coverage at work then that helps as well.  Not everyone does, but it is very helpful should such a situation arise.  My question is.....Could your family survive on 75%-80% of your takehome pay (not counting bonuses)?  If so, then consider yourself one of the more fortunate ones.  For most folks, that drop in income would cause a huge crunch and additional worry.
If you have been diagnosed with a critical threatening cancer, heart attack, stroke it possible that worrying about finances may not help you in your fight to get well?  Working with the 75%-80% of takehome may be possible if nothing else changes.  If you are hospitalized, do you know what it costs for parking to have your family visit you regularly.  Would they perhaps spend more on food since they may be home less to prepare meals?  Would they just pickup or order more food in that instance?  Could you need special food that perhaps costs more than what you would normally purchase for your family?  Could you need medications and treatments not covered by your benefits?  Where will the additional funds come from?
Generally, the savings account goes first (for those who have funds available).  Then it's the TFSA's, the Line of Credit, then the credit cards and last but not least the RRSP.  Would making these withdrawals add stress to the sick person and the family?  How much further could that set your retirement back?  You would probably put retirement on the back burner while you fight for your life.  I need to survive first.  I'll worry about retirement later.  I submit it would add great stress to have to go through all that. 
What if you could have access to $25000, $50000, $500000?  Would that keep your RRSP's in place and avoid the huge taxation of an early withdrawal?  Would it minimize or eliminate the need to rack up debt on your Lines of Credits and credit cards?  Compare the costs of a premium against a taxable withdrawal or huge interest debt.
It would be nice to have your credit card and Line of Credit companies call you up and say....Dear valued customer, we understand you have a critical illness so you can have this money interest free. You don't even have to make payments until you recover since we know you'll be taking home less than normal.  I haven't heard of that happening yet.  Would Canada Revenue Agency say that since you're sick, we won't charge you the withdrawal penalties for cashing in your RRSP's....10% for up to $4999, 20% for $5000-$14999 and 30% for $15000 plus.  We won't add all that money you take out to your income for the year and tax you on the overall amount.  I haven't heard of that either.
If your spouse needs to take extra time off work to help out with taking you to appointmens or taking care of the added load of household and family duties, will their benefit plan cover them (if they have one)?  It may not since they aren't the sick party.  They may have to work less and bring in even less income as well.  What does all that do for a family's stress level? 
Critical Illness insurance will not prevent any of the illnesses.  It gives you and your family options to deal with your situation and allows you to focus on getting better as opposed to worrying about finances while trying to get better.  What if the treatment you need is in another country and not covered by your plan?  What would you do to try and save your life?  What would you cash in or sell if you didn't have these funds available?
What if you won't recover?  It is an unfortunate reality.  Could these funds give you the opportunity for a spouse to take time off to spend with you......take that trip that you've always wanted, cross a few things off your bucket list? 
OPTIONS---That is what Critical Illness Insurance gives a family.  It allows for the bills to be taken care of so that you and your family can focus on recovery.  I believe the absence or minimizing of stress would be better for any recovery attempts.  Please contact us for further discussion.  Let us protect you and your family.
Glenval Griffiths, CHS
Griffiths Insurance and Financial Services