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DISABILITY INSURANCE WHY AREN’T MORE CANADIANS BUYING IT? EXPERT ADVICE GETTING COVERAGE FOR CLIENTS WITH HEART DISEASE

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DIRECT ONLINE SALES HOW TO COMBAT THIS GROWING THREAT

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ISSUE 1.03

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CONTENTS

plus.google.com/+LifehealthproCa facebook.com/CanadianLifePro

UPFRONT 03 Editorial

Life insurance turns to wearable tech

04 Statistics

2015

A look at disability insurance’s market share across Canada

ADVISORS ON

06 Head to head

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Should marijuana users be classified as smokers?

COVER STORY

ADVISORS ON CARRIERS 2015

FEATURES

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EXPERT ADVICE

Now that heart disease no longer means an automatic life insurance denial, how can advisors make sure their clients’ applications have a good chance of getting approved?

It’s a challenging time in the advisor-carrier relationship. In this first annual survey, advisors offer opinions on where carriers are doing well, and where they can improve

Broaching the subject of critical illness insurance

08 News analysis

How big of a threat is the direct online sale of life insurance?

10 Pension update

What the ORPP means for advisors

PEOPLE 24 Other life

Advisor Kevin Cahill put pen to paper to overcome a string of personal challenges

PEOPLE

ADVISOR PROFILE

Disability specialist Lawrence Geller reflects on the challenges of overcoming consumer bias

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FEATURES

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CRITICAL ILLNESS FOR KIDS

It’s something no parent wants to think about, but insuring kids against serious illness can be a smart financial move

2 www.lifehealthpro.ca

LIFEHEALTHPRO.CA CHECK IT OUT ONLINE


UPFRONT

EDITORIAL

EDITORIAL

www.lifehealthpro.ca FALL 2015 EDITORIAL Editorial Director Vernon Clement Jones Senior Writer Nicolas Heffernan Writer Will Ashworth Copy Editor Clare Alexander

CONTRIBUTORS Syded Masood Raza Marylou Dunn

ART & PRODUCTION Design Manager Daniel Williams Designer Kat Vargas Production Manager Alicia Salvati Traffic Manager Kay Valdez

SALES & MARKETING National Account Manager Tristan Cater National Accounts Manager Dane Taylor Associate Publisher Trevor Biggs General Manager, Sales John Mackenzie Marketing and Communications Claudine Ting Project Coordinator Jessica Duce

CORPORATE President & CEO Tim Duce Office/Traffic Manager Marni Parker Events and Conference Manager Chris Davis Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil

EDITORIAL INQUIRIES vernon.jones@kmimedia.ca

SUBSCRIPTION INQUIRIES subscriptions@kmimedia.ca

ADVERTISING INQUIRIES tristan.cater@kmimedia.ca

KMI Media 312 Adelaide Street West, Suite 800 Toronto, Ontario M5V 1R2 tel: +1 416 644 8740 www.keymedia.com Offices in Toronto, Sydney, Denver, Auckland, Manila

Life Health Professional is part of an international family of B2B publications and websites for the insurance and finance industries INSURANCE BUSINESS CANADA john.mackenzie@kmimedia.ca T +1 416 644 874O

INSURANCE BUSINESS AMERICA cathy.masek@keymedia.com T +1 720 316 0154

The wearable revolution

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dvisors who love science fiction, get ready for life to imitate art. As with most life insurance initiatives, the move to adopt technology has been a slow drip. But there are signs that wearable technology, which has revolutionized many other industries, is starting to take hold. In April, Manulife’s US division announced a revolutionary approach to integrating wearable technology to encourage policyholders to take small steps to improve their health, allowing clients to save on annual premiums, as well as receive discounts and rewards from leading retailers. Manulife has already announced it’s looking at implementing a similar plan north of the border.

Advisors have to hope the gamification of life insurance will lead to an uptick in client engagement It looks poised to be more than just a flash-in-the pan marketing gimmick. On the group benefits side, Telus Health is getting in on the wearable bandwagon with the announcement of a strategic investment in Sprout, a Canadian business that helps companies better engage employees on health and wellness. The reason for this move is simple: Consumers want it. Nearly 50% of insurance customers are already interested in lower life premiums based on exercise levels and other indicators recorded by such devices – all part of the shift toward personalized services and risk management. Advisors have to hope the gamification of life insurance – or critical illness or disability, for that matter – will lead to an uptick in client engagement and get people interested and ultimately buying insurance. Insurance companies are making that bet with their adoption of wearables. Wearable technology also could be poised to revolutionize the way life insurance is underwritten. It’s not too hard to imagine a world in which an insurance company will ask clients to put on wearable technology for a few days and use the data to underwrite clients more accurately, placing them in the right rate band based on their health and lifestyle. It might sound like science fiction, but is it really that far-fetched?

The LHP editorial team

WEALTH PROFESSIONAL dane.taylor@kmimedia.ca T +1 416 644 874O Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as the magazine can accept no responsibility for loss

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UPFRONT

STATISTICS

The forgotten insurance

$40 million Northwest Territories

What’s behind Canadians’ potentially perilous snub of disability insurance? LIFE INSURANCE is usually the product that gets pushed the most by advisors, but it seems that equally important disability insurance has been flying under the radar. A recent survey by Edward Jones found an alarming number of Canadians aren’t purchasing disability insurance. While critical illness, disability, and long-term care insurance are not top insurance priorities for Canadians, when asked to rank the top three things they would invest their money in to protect,

12.7 million 1.012 million Number of Canadians with disability coverage

Number of disability contracts in Canada

a majority of respondents highly rated things like ‘financial well-being of family’ and ‘my quality of life in old age.’ A number of factors are playing into that ‘say-do gap,’ including lack of consumer education, cost and stringent underwriting. Also confusing the issue is what employee-provided disability coverage offers. In almost all cases, the amount is inadequate and the terms mean an employee is unlikely to qualify.

23%

$1.1 billion British Columbia

11%

Percentage of Canadians who say they’ve purchased individual disability insurance

$1.2 billion Alberta

Percentage of Canadians who say they’ve purchased individual critical illness insurance

Sources: Edward Jones, Canadian Life and Health Insurance Facts

HITTING A PLATEAU

DISABILITY COVERAGE IN CANADA

While disability coverage has risen significantly over the past decade in Canada, it stagnated between 2013 and 2014, exhibiting only marginal growth

Approximately 34% of Canadians (or about 12 million people) have some type of long-term disability coverage, most of which is provided through employee benefits

Group contracts 1,000,000

50,000

Prince Edward Island

50,000

Individual contracts

Newfoundland

970,000

New Brunswick

200,000

Nova Scotia

250,000

910,000

800,000 600,000

140,000

Saskatchewan

360,000

Manitoba

380,000 1.3 million

British Columbia

400,000 200,000

Northwest Territories

1.7 million

Alberta 144,000

146,000

2.5 million

Quebec

5 million

Ontario 0

2013

2014 Source: Canadian Life and Health Insurance Facts

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0

1 million

2 million

3 million

4 million

5 million

Source: Canadian Life and Health Insurance Facts


DISABILITY PREMIUMS BY PROVINCE

$2 billion

Unsurprisingly, disability insurance premiums are concentrated Ontario and Quebec; combined, the two provinces represent more than half the money being paid for disability in all of Canada. Prince Edward Island and the Territories had the lowest amount of disability

Quebec

$110 million Newfoundland

$30 million Prince Edward Island

$200 million Nova Scotia

$270 million

$260 million

Saskatchewan

Manitoba

$160 million New Brunswick

$3.8 billion Ontario

Source: Canadian Life and Health Insurance Facts

MAJOR SOURCE OF GROUP HEALTH PAYMENTS... Given the rise in drug costs, it’s unsurprising that medical and hospital benefits account for almost half of group health payments in Canada, but it might come as a bit of a surprise to see disability claiming so much of the pie 3.5% Creditors disability/CI

… AND INDIVIDUAL PAYMENTS When it comes to the payments insurers are making to individual Canadians, disability rises to the number-one spot 5.8% Personal accident

1.4% Accidental death and dismemberment

5.4% Dental

27.9% Disability

18.3% Travel health insurance

18.1% Dental

42.4% 34.6% Disability

Medical/hospital benefits (including prescription drugs)

Source: Canadian Life and Health Insurance Facts

18.7% CI

23% Medical/hospital benefits (including prescription drug expenses) Source: Canadian Life and Health Insurance Facts

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UPFRONT

HEAD TO HEAD

Should marijuana users be considered non-smokers? Advisors are split on the status of marijuana for life insurance; some claim it’s no different than a cigarette

Victor Godinho

Lyle P. Konner

Ken MacCoy

President and senior financial planner Pangea Personal Financial Planning

President and founder Konner & Associates Financial Services

Owner RitePartner Financial Services

“I think marijuana smoke is just as bad as cigarette or tobacco smoke, maybe even worse. Smoke from marijuana combustion has been shown to contain many of the same toxins, irritants and carcinogens as tobacco smoke. With marijuana being sold through nonregulated channels as well, there is no way to know what chemicals may have been used in the growing process. Beyond just what’s in the smoke alone, marijuana is typically smoked differently than tobacco. Marijuana smokers tend to inhale more deeply and hold their breath longer than cigarette smokers, which leads to a greater exposure per breath to tar.”

“Yes. However, it is important to note that life underwriting assesses mortality factors, which include numerous other lifestyle issues, when coming up with the final price for insurance. If [marijuana is used] daily, it poses a greater risk. It also could be addictive to certain personality types. All life companies have agreements with all or some of [the reinsurance companies]. This dictates cost and what is acceptable or rateable as a risk. While I believe users should be considered on a non-smoking basis, I do stress that all aspects of the person’s life [should be] reviewed in order to make a proper risk assessment.”

“It really depends how often they smoke. For years, cigar smokers have received better rates than cigarette smokers from [both] Canada Life and Manulife Financial. So why shouldn’t marijuana smokers get the same break, depending on how much they indulge? If you smoke daily or even weekly, then smoker rates should apply. However, if you smoke one joint a month or less, how can that really be considered any different than smoking a cigar? A blood test could easily provide underwriting with the benchmark required to determine whether or not ‘smoker’ or ‘cigar/pipe smoker’ rates should apply.”

POT IN THE SPOTLIGHT Sun Life’s recent decision to cover a 22-year-old University of Waterloo student’s medical marijuana costs has thrown the drug into the insurance spotlight. Almost one-third of insurance carriers in the US consider marijuana users non-smokers. In fact, 54 of the 150 underwriters attending an industry conference in the spring suggested as much in a survey conducted by Munich American Reassurance Company. The survey also found that 49% of the underwriters believed there is no difference in risk between those who smoke marijuana and those who ingest it. The same can’t be said for Canada, as insurers north of the border haven’t been quite as lenient.

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UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? Email lifehealthpro@kmimedia.ca

Start the CI conversation Often viewed as the red-headed stepchild of insurance, critical illness is being overlooked by advisors, writes Syed Masood Raza CRITICAL ILLNESS insurance is arguably the third most important insurance need after life and disability insurance; however, it may be the most overlooked product by advisors when it comes to making recommendations to a client’s portfolio. It’s not as if consumers don’t see the value in CI. In fact, the product has significantly increased in popularity since the 1990s, accounting for 28.6% of the entire health insurance market in 2012, according to the Canadian Life and Health Insurance Facts. As the occurrence of several critical illnesses continues to rise and advancements in healthcare enable patients to survive these conditions, CI could be the highest returning insurance product a policyholder will purchase in their lifetime.

CI isn’t bought, it’s sold After reviewing and securing coverage for life and disability insurance, advisors should educate clients on the financial consequences of critical illnesses and the available options to mitigate this risk. Prospects could become more inclined to take out CI insurance if they were aware of the risks of contracting major diseases and the benefits coverage would provide. According to the Canadian Cancer Society, roughly 40% of Canadians will develop cancer during their lifetime. The numbers of other critical illnesses are no less staggering: 160,000 Canadians have heart attacks, and 40,000 to 50,000 Canadians suffer a stroke every year, according to the Heart and Stroke Foundation. It’s not just the elderly who need

CI insurance, either: 50% of heart attack victims are under the age of 65. Prospects also should be aware of the financial consequences of not being covered under a CI policy, should the unimaginable happen. Expenses such as alternative medical practitioners, loss of wages and overlooked

they invested the premium elsewhere. Although this rider is not cheap, it could be worth it for clients who want to know there is something coming back to them in either case. It creates a scenario where the insured wins financially by staying healthy as well. It’s important to show clients exactly what renewal rates will cost them, should they opt for a short-term CI plan. There is no sense in paying for a ROP rider if the policyholder cannot afford to keep the policy in force until it expires. These riders were introduced by insurance carriers to make CI more attractive to consumers; therefore, advisors should educate prospects about these options.

Don’t forget about simplified-issue options for hard-to-insure cases As with the recent surge of simplified-issue products entering the life insurance market,

“Prospects could become more inclined to take out CI insurance if they were aware of the risks of contracting major diseases ...” expenditures like hospital parking fees are typically not covered by provincial health plans. Adequate CI coverage can be used cover these expenses so the insured can focus on getting better and not have to resort to borrowing or liquidating assets. Many people believe they don’t need to consider CI because they must be covered under their group health plan. However, CI is not always included in group plans, and when it is, insureds are usually only covered for up to $25,000 in benefits.

Riders that cover all angles Many individual CI plans will offer potentially useful optional benefits, such as the Return of Premium on Expiry [ROP] rider. The ROP option pays the policyholder back all of their premiums, including the cost of the rider, should they not make a claim up to the policy maturity date. In effect, the policyholder is only paying the interest (or other returns) they would have earned had

there are now CI plans available for hard-toinsure clients. It’s important for advisors to take their time with applicants while completing the health declaration, as these applications tend to have very broad questions. For clients who prefer not to answer any questions, a guaranteed-issue CI plan might be a better fit. It’s important to know that these plans typically have a two-year waiting period and are limited to a $25,000 face amount. As with all other insurance offerings, advisors should present their clients with a cost-benefit analysis of various CI scenarios, which will guide them to make a decision that suits their needs and preferences.

Syed Masood Raza is the director of marketing at LSM Insurance and has been a licensed life and health insurance advisor since 2008.

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UPFRONT

NEWS ANALYSIS

The beginning of the end? Carriers are increasingly including product offerings online, posing a very real threat to advisors CAN I get a $500,000 term 20 with a small critical illness and disability on the side? As carriers start dipping a toe in online direct-to-consumer sales, advisors are raising concerns that the industry could soon resemble McDonalds or Tim Hortons. “It’s becoming like a drive-through system, and it’s so much more than that,” says Sara Zollo, an advisor with Sun Life. “I think there’s a lot of value lost when it’s done online. It’s not a one-size-fits-all scenario.” But an Ernst & Young survey found Generations X and Y are more open to dealing directly with insurance companies – and it

“There are a lot of advisors who are concerned that … if at some point they feel it’s more profitable to distribute products this way, that could eliminate the brokers for certain carriers,” says Lorne Marr, director of new business opportunity at LSM Insurance. “These are public companies, so in essence they have a responsibility to their shareholders – not their brokers.” It’s easy to see the appeal for insurers. Not only does selling life insurance directly online allow carriers to cut costs on commissions for advisors, it also would allow them to take advantage of analytics

“It’s becoming like a drive-through system, and it’s so much more than that. There’s a lot of value lost when it’s done online” Sara Zollo, Sun Life appears carriers have heard the message. In May, Manulife launched a quick-issue term product, while in late June, Empire Life launched its new Simplified 10 and Simplified 20 term life insurance exclusively online. And these are just the most recent examples – most carriers have online offerings for at least term insurance.

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for more efficient underwriting, eliminating two of their biggest costs in one fell swoop. “For the guy coming into the business or advisors in the ma-and-pa market, it will have a big impact,” says Mark Halpern of IllnessProtection.com. “If they don’t gravitate [online] and create some sort of

strategy for themselves, they could be squeezing themselves out of business.” While adopting a new strategy is paramount for advisors, that’s easier said than done when confronting a trend that is turning one of the industry’s oldest maxims on its head. “In the past, people have always said that insurance is sold, it’s not bought, but with millennials, they’re buying insurance,” Halpern says. “They don’t have to see anyone, and they can do it all online. The insurance company can provide them with easy navigation and a service that’s very profitable – you’re going to see a ton in that space.” At the moment, the primary online offerings are term products. So perhaps advisors should be most concerned about BMO’s February move to launch Insure Now Plus, an online product that combines life, critical illness and disability insurance


BY THE NUMBERS

into one plan. It’s an example of one company that is aggressively pursuing the online channel at the expense of its advisor channel.

Marr says. “It’s a challenge because BMO obviously has a much bigger budget than [we do]. Depending on how aggressively they want to target the direct channel, it’s

“You may see the bigger carriers try to strengthen their direct channels and the smaller to mid-sized carriers work more via the broker channel ...” Lorne Marr, LSM Insurance “BMO sells product directly through the BMO site and is avoiding the broker,” Marr says. “That’s definitely happening more often.” And it’s creating an uneven playing field for independent advisors. “We do a lot of advertising online, and we’re competing with the actual carriers,”

a huge issue for brokers.” This battle could soon split the industry into carriers that are broker-focused and those that are targeting online sales. “I think you may see the bigger carriers try to strengthen their direct channels and the smaller to mid-sized carriers work more via the broker channel because most of

80%

Percentage of life insurance purchases where the Internet plays a role

10%

Percentage of customers who engage a carrier via mobile phone

31%

Percentage of customers aged 24 to 44 who prefer to buy direct

37%

Percentage of term-life share that is sold direct

63%

Percentage of consumers expected to buy life insurance online by 2015

those companies don’t even have a direct offering,” Marr says. “I think that’s going to be their niche going forward. They’re going to say, ‘We’re not your competition; you’re our sole distribution channel.’” When it comes to term insurance, there’s little doubt advisors are at a disadvantage now compared to 10 years ago. In order to compete, advisors are going to have to adapt by using centres of influence and referrals to put themselves in front of consumers to prove their worth. “That’s where you have to show people,” Marr says. “People often say, ‘I need a $500,000 term 20.’ But what’s it for? Do you really need that, or do you need $800,000 or $850,000? Or do you need disability insurance as much or more than you need life insurance? That’s where a broker comes into play.”

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UPFRONT

PENSION UPDATE

DC plan included in ORPP The Ontario government’s decision to include some DC plans is receiving mixed support

The Ontario Chamber of Commerce, an outspoken critic of the plan throughout the process, had mixed feelings about the announcement. “Today’s announcement is a step in the right direction,” said Allan O’Dette, president and CEO of the OCC. “Broadly speaking, the government of Ontario has responded to our advocacy efforts. Despite today’s announcement, we remain concerned that the ORPP in its current form will have a negative impact on business competitiveness.”

“The industry will need some time to analyze what implications this ... will have”

Advisors can breathe a sigh of relief – Ontario’s provincial government is defining DC plans that offer total contributions of 8% as comparable to the ORPP. According to provincial Liberals, 8% of base salary earnings is the magic number a workplace DC plan needs to be able to reliably deliver the same level of income replacement in retirement as the ORPP. Employers will be required to contribute at least 50% of the total minimum contribution, or at least 4%.

NEWS BRIEFS

“Today’s announcement by the Ontario government recognizes that defined contribution pension plans can provide significant retirement income security for Ontario workers,” said the Canadian Life and Health Insurance Association in a statement. “The Ontario proposals are complex, and the industry will need some time to analyze what implications this ... will have for the retirement savings plans of Ontarians and, indeed, other Canadians who work for national companies.”

Small-business owners largely unprepared

A recent report from Mass Mutual found that small business owners are woefully unprepared for unforeseen or unexpected circumstances, including death. “We found that business owners are spending the majority of their time working in their businesses instead of on their businesses,” said Mass Mutual’s Tara Reynolds. “It’s never easy to think about death or disability, but in order to raise awareness about these longer-term issues, business owners need to be confronted directly with the potential risk and damage of unexpected events.” 10

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For Ontarians not already enrolled in a pension plan, it will cost them anywhere from a Tim Hortons to a specialty cup of coffee per day. A person making $45,000 a year can expect to pay out $2.16 a day, while someone making the maximum of $90,000 annually will fork out $4.50 a day. The government’s release says the plan will be fully implemented by 2020, and the first benefits will be paid out two years later. A person earning $45,000 per year for 40 years will receive $6,410 a year for life, compared to $90,000-a-year earners, who will receive $12,815 a year for life – amounting to about a 15% return after 40 years. Participants must be 65 years old before they can collect.

Sun Life completes real estate acquisition

Sun Life has completed its takeover of one of the largest real estate advisors in North America, a move that marks the industry’s race to get ahead of investor trends. “Today, Sun Life Investment Management achieved a significant milestone, adding the premier real estate investment expertise of Bentall Kennedy to our high-calibre real estate and commercial mortgage investment capabilities,” said Steve Peacher, president of Sun Life Investment Management and chief investment officer of Sun Life Financial.


Q&A

Gil McGowan President and CEO BENEFITS ALLIANCE

Years in the industry: 35 Career highlight: As Mackenzie Investments’ senior vice president of national sales, McGowan doubled the in-force group retirement plans from 1,800 to more than 3,500 in five years; assets under management increased from $350 million to more than $1 billion in the same period

The ORPP threat to advisors What were your thoughts on the Liberals’ recent announcement on the details of the ORPP?

The federal government has refused to cooperate with Ontario and contribute. Where does that leave the plan going forward?

I don’t think we were happy with the government’s decision in the first place, but including defined contribution pension plans at least gives us a chance to go to our clients and give them an alternative to the ORPP. It forces clients to decide, “Do I want to deal with the government’s ORPP and explain that to them, or do we have this alternative that we can put in a Registered Pension Plan with one of our major suppliers?” It’s turning lemons into lemonade. I can say all kinds of things about how the government should have worked to implement something with existing private pension plans and retirement saving systems, and how they could have eliminated payroll taxes on employer contributions to RRSP. I think there’s going to be a loss of jobs with the implementation of the ORPP within the insurance companies who are doing a lot of group RRSPs. Maybe companies are just going to say, “We’re not doing anything now.” What’s going to happen to those plans from insurance companies and investment firms and banks and credit unions … for advisors, brokers, consultants who really zeroed in on group RRSPs? So it’s a really big risk from a job perspective.

It leaves it in limbo. It increases the cost. It costs about $800 million a year to administer the CPP. Wynne was asked at one point how much this is going to cost, and she said, “We haven’t worked that out yet.” I think the jury is still out. We’ll see how the election plays out in October … if there is a change in parties, we might see a change in this whole initiative of the ORPP.

Young workers want no part of insurance

AM Best’s latest quarterly report on the insurance industry is critical of the sector’s recruiting efforts among young Canadians – a failure that could have long-term ramifications. According to the credit rating agency’s survey, less than 20% of advisors in the US are 44 years of age or younger. Even more damaging to the industry’s brand is that 63% of life advisors are over the age of 50, according to the findings. The reasons run the gamut, from life insurance being ‘too boring’ to lacking diversity to not being entrepreneurial enough.

If implemented, how will the ORPP affect advisors? It will affect them if companies say, “Hey, I’m not going to do anything.” There was a report that said 56% of clients may consider eliminating their group RRSP if the ORPP is implemented. It could affect the business of advisors. They could lose those clients, and then what happens to those plans? They get wound up, and the assets have to be moved around or transferred out. It does cause a lot of turmoil in the industry, like spinning your wheels a little bit. And there will be a loss of revenue because there are no more contributions, and the advisors in this business generate revenue and income from commissions and trailers from assets under management. So those assets will not increase anymore, and then they’ll see their income drop.

Canadians uninformed about healthcare costs

Research from Sun Life points to the lingering disconnect among Canadians about the true cost of healthcare and what is and isn’t covered by provincial plans. “Our research revealed that a large majority of Canadians are not aware that not everything is covered by their provincial health insurance,” said Brigitte Parent, senior vice president of individual insurance and wealth with Sun Life Financial Canada. “Canada’s health insurance system was set up to respond to people’s need for it, rather than their ability to pay for it.”

Desjardins billiondollar bet on State Farm paying off

After two quarters with State Farm’s Canadian operations on the books, Desjardins says the results so far are exactly what they were hoping for. In the second quarter of 2015, Desjardins’ wealth management and life and health segment business generated $134 million in surplus earnings. Desjardins’ overall surplus earnings were $629 million, 41% higher year-over-year. Of the $183 million increase in surplus earnings, $130 million is attributable to State Farm. The deal also made Desjardins’ P&C segment the second-largest insurer in the space. www.lifehealthpro.ca

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FEATURES

COVER STORY: ADVISORS ON CARRIERS

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For LHP’s first-annual survey, advisors didn’t hold back when rating their carriers on everything from underwriting to claims responsiveness

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CAN’T LIVE with ‘em, can’t live without ‘em. Some carriers seem to be advisors’ favourite punching bags, but without them, advisors concede, they’d be lost. The mere mention of carriers is enough to get advisors engaged, so perhaps it should come as no surprise that advisors turned out in droves to criticize, praise and evaluate their carriers. The industry is in a strange position at the moment. The low-interest-rate environment, combined with carriers beginning the slow path to finally embracing technology, is shaping the industry, and no one really knows where the changes will eventually lead. So where does that leave advisors? “We are getting over run by banks entering

“We all contribute to the company, so why not support the smaller brokers?” the insurance business, insurers are cutting commission, and no young brokers are coming into the business,” said one survey respondent. “Help us regroup and provide brokers with blocks of business that are for sale. Help the smaller broker grow their business. Set up a referral process for all brokers, not just the larger ones. We all contribute to the company, so why not support the smaller brokers?” One area that threatens to turn the advisorcarrier relationship on its head is the online channel. That’s covered in other areas of this magazine, but advisors made their thoughts on the subject known on this survey as well. “Stop direct marketing to my clients,” wrote one respondent. So how carriers perform in other areas like premium pricing, underwriting and marketing support? We asked survey respondents to rate their carriers using a scale from 1 (poor) to 5 (excellent). For a carrier to be included, they needed a minimum number of of responses. Read on to find out what advisors had to say about how carriers are doing.

AVERAGE CARRIER PERFORMANCE While carriers performed well overall in areas like reputation and pricing, advisors were underwhelmed with their efforts in critical areas like underwriting responsiveness, marketing and automation

4.21 4.00 3.88 3.88 3.78 3.78 3.75 3.65 3.49

Reputation Premium pricing Overall life insurance Commission structure Claim responsiveness/ turnaround time Overall CI/DI Marketing support Automation Underwriting responsiveness/ turnaround time

0

1

2

3

4

5

WHAT’S THE BIGGEST CHALLENGE YOU’VE HAD WITH A CARRIER’S SERVICE IN THE LAST 12 MONTHS? Some of the forms and administrative processes are too cumbersome – need better, more efficient streamlining Their idea of paperless means I print the forms Separate distribution channel bypassing the agent is not a good idea New documentation, regulatory and compliance requirements Not getting any support to get business referred to brokers. Banks offer to visit your local advisors High underwriting requirements – too many declines/ratings Application processing and service requirements overload – agents are doing the insurance companies’ work

www.lifehealthpro.ca

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FEATURES

COVER STORY: ADVISORS ON CARRIERS N CARRIE

R

SO

N CARRIE

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ON CARRIE

R

OR

S

S OR

S

5

ADV

20 1

IS

5

ADV

20 1

IS

ADV

IS

SO

5

Reduced renewal pricing for group plans

OR

20 1

Sped up response time and accuracy

MARKETING SUPPORT S

WHAT’S THE BEST THING A CARRIER HAS DONE FOR YOU IN THE PAST 12 MONTHS?

Gave me great support as an advisor

IS

IS

ADV IS

ADV IS

ADV

ADV IS

ADV IS

ADV IS

ADV

N CARRIE

R

N CARRIE SO

OR

R

5

5

www.lifehealthpro.ca

SO

20 1

20 1

14

OR

S

S

After a claim has been filed, an advisor can often remain in limbo as the carrier adjudicates. This was one of the biggest complaints advisors had against carriers, and it’s demonstrated by this category’s average score of 3.78, the third worst on the survey. But some carriers are doing a better job than others, it seems. Empire Life and Blue Cross tied for first place with a score of 4.15. Great West Life took home silver with a score of 4.14, and Sun Life won bronze with a score of 4.09.

R

Transamerica: 4.19 Blue Cross: 3.92 Empire Life: 3.90 Overall average: 3.49

Sun Life: 4.09 Overall average: 3.78

N CARRIE

5

R

Overall average: 3.88

SO

20 1

5

N CARRIE

RBC: 4.15

OR

S

20 1

SO

5

S

OR

Great West Life: 4.14

O

20 1

5 R

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20 1

ON CARRIE

N CARRIE

Canada Life: 4.16

5

S

S OR

Blue Cross: 4.15

O RS

Transamerica: 4.67

20 1

R

R

UNDERWRITING RESPONSIVENESS/ TURNAROUND TIME S

N CARRIE

N CARRIE

5

SO

SO

OR

20 1

5

OR

Empire Life: 4.15

R

S

20 1

IS

R

N CARRIE

5

N CARRIE

SO

OR

20 1

SO

S

OR

COMMISSION STRUCTURE S

CLAIM RESPONSIVENESS/ TURNAROUND TIME

ADV

Properly explained the good and the bad points of their products

IS

Communication during the underwriting process

ADV

Underwriting turnaround in a couple hours for a group quote change request

IS

Provided individual claim consideration for special circumstances

Transamerica: 4.00

Marketing support was one of the top three problem areas advisors identified, receiving the second-lowest average score at 3.75. It seems it’s a double-barrelled problem of carriers not doing enough marketing to help grow sales for advisors, as well as carriers’ direct-to-consumer marketing threatening advisors’ clients. But that’s not to say some carriers aren’t excelling in this area. Blue Cross got top marks with a score of 4.42. RBC came in second with a strong 4.11, and Transamerica rounded out the top three, posting a 4.00.

ADV

Paid a critical illness claim that they could have probably denied

RBC: 4.11

Overall average: 3.75

Expedited claim service Provided marketing support and acknowledged my business with a thank you

Blue Cross: 4.42

Insurance advisors (and those who are dual licenced) are casting a nervous glance over to wealth management, where regulatory changes are poised to transform the industry. The whispers are that those same changes around fee-for-advice service and disclosure could soon make their way over to insurance. In the meantime, advisors are seemingly content with the commission structures carriers have in place, as demonstrated by the average score of 3.88. Transamerica seems to be significantly outperforming the field, winning the category with a score of 4.67. Canada Life came in second at 4.16, and RBC was a close third at 4.15.

Now we come to the bane of most advisors’ existence – underwriting. To say it’s an inexact science might be the understatement of the year. Not only is underwriting unresponsive and slow, and full of decisions, declines and exclusions that are often baffling to advisors, but communication between carriers and advisors leaves a lot to be desired. It should come as no surprise that underwriting received the lowest average score from advisors, clocking in at 3.49. Transamerica were the best of the bunch, scoring 4.19. Blue Cross took silver at 3.92, while Empire Life earned bronze with a 3.90.


REPUTATION

N CARRIE

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SO

N CARRIE

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IS

ADV

IS

SO

ADV

ADV

IS

IS

ADV IS

ADV

R

Manulife: 4.38

ADV

IS

ADV IS

ADV IS

Sun Life: 4.57

OR

Overall average: 4.21

Reputation is the area where carriers excel. Say what you will about Sun Life, Manulife or Great West, but their history and longevity ensures that consumers know and respect their brand. It seems that aside from the big three, even smaller players have developed sterling reputations, as demonstrated by an average score of 4.21. There was a bit of a surprise in this category, though, as Blue Cross was able to overcome the ‘million-dollar baby’ scandal to nab the top spot with a score of 4.65. The usual suspects rounded out the top three: Sun Life took silver at 4.57, and Manulife earned bronze at 4.38.

OR

5

ADV

R

20 1

5

Technology is taking over almost every aspect our lives, and life insurance is no different. But while technology has revolutionized many industries almost overnight, its adoption in life insurance has been more of a slow drip. Granted, there are issues unique to life insurance that other industries don’t have to face, but advisors are clamouring for a more automated process. And they don’t seem to like what they’ve seen so far, judging by an average score of 3.65. Blue Cross won gold as the best company for automation with a score of 4.15. They were followed closely by Transamerica at 4.00 and Great West Life at 3.97.

N CARRIE

S

20 1

Overall average: 3.65

O

5

S

Great West: 3.97

20 1

R

S

N CARRIE

SO

5

5

SO

N CARRIE

OR

20 1

20 1

OR

O RS

Blue Cross: 4.65

S

S

Transamerica: 4.00

R

5

R

N CARRIE

20 1

N CARRIE

SO

OR

S

SO

ER

5

5

OR

S

20 1

20 1

Blue Cross: 4.15

OR

PREMIUM PRICING S

R

5

N CARRIE

20 1

SO

S

OR

ON CARRI

S

IS

AUTOMATION

Transamerica: 4.67 Canada Life: 4.16 RBC: 4.15 Overall average: 4.00

Carriers are doing fairly well when it comes to premium pricing, although the public doesn’t seem to be aware of it. According to a recent LIMRA study, 80% of consumers misjudge the price for term life insurance – millennials overestimate the cost by 213%, and Gen Xers overestimate it by 119%. While consumers may be unaware of pricing, advisors seem quite pleased with the way carriers are pricing insurance, demonstrated by an average score of 4.00. Transamerica was the winner in this category, scoring an impressive 4.67. Canada Life came in second at 4.16, and RBC took the bronze with a score of 4.15.

WHAT DO YOU THINK IS THE MOST IMPORTANT ISSUE THAT WILL AFFECT THE ADVISOR/CARRIER RELATIONSHIP IN THE NEXT SIX TO 12 MONTHS?

Marketing support

5.23%

Underwriting

38.95%

“We are getting over run by banks 18.02% entering the insurance business, Products 27.33% insurers are cutting commission, and no young brokers Claim responsiveness are coming into the 10.47% business” Commissions

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FEATURES

COVER STORY: ADVISORS ON CARRIERS

OR

SO

N CARRIE

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N CARRIE

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N CARRIE SO

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S

OR

S

OR

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5

ADV

20 1

IS

5

ADV

20 1

IS

5

ADV

20 1

IS

OVERALL LIFE INSURANCE Empire Life: 4.13 Manulife: 4.07 Transamerica: 4.06 Sun Life: 4.04 Great West Life: 3.97 Overall average: 3.88

OR

SO

N CARRIE

R

SO

N CARRIE

R

S

OR

S

OR

SO

N CARRIE

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SO

N CARRIE

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S 20 1

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ADV

5

ADV

20 1

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ADV

20 1

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ADV

20 1

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OVERALL CI/DI

IN PRAISE OF CARRIERS While advisors offered a lot of criticism about carriers, we would be remiss if we didn’t point out the praise they lavished on their carriers as well

MANULIFE “Generally underwriting is quick. Communication with advisor is very good. Online application is easy to use and very effective, saves a lot of time” EMPIRE LIFE “Empire Life has been super quick lately” “Empire Life does well on their electronic applications with issue time”

RBC: 4.33 Sun Life: 4.00 Blue Cross: 4.00 Manulife: 3.99 Great West Life: 3.97

SUN LIFE “Sun Life performs better than the rest. They are very prompt with everything, and I see them pay claims quickly, even when the client may not meet all requirements in the definitions – especially for critical illness claims”

Overall average: 3.82

Finally, we come to the moment we’ve all been waiting for: the overall rankings for life insurance and critical illness/disability insurance. When it comes to life insurance, advisors gave carriers an average score of 3.88. Empire Life was the big winner, scoring 4.13. Industry heavyweight Manulife claimed second with a rating of 4.07, and Transamerica rounded out the top three with a score of 4.06. In terms of critical illness and disability insurance, advisors gave carriers a slightly lower score than for life insurance, with an average of 3.82. RBC was the winner here with a score of 4.33. Sun Life and Blue Cross were in a dead heat for second with a score of 4.00. Manulife took home the bronze with a score of 3.99.

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BMO “They want my business and are excited to have me as a partner” GREAT WEST “GWL is ahead of the curve with its mobile app” TRANSAMERICA “Transamerica Life has been good in turning around cases, and I received acknowledgment for the business I place with them. None of the others have done that” INDUSTRIAL ALLIANCE “They are pretty stringent when it comes to life products, but are also fair and expedient when paying out”


WHAT’S ONE THING YOU WOULD LIKE TO SEE CARRIERS IMPROVE IN THE NEXT SIX TO 12 MONTHS? Underwriting

20%

Products

7%

Applications

6%

Support (technology, marketing, support when things go wrong)

Responsiveness

“Recognize premium producers with VIP underwriting service”

5.81% 5% 0%

5%

10%

15%

20%

“Make websites more user-friendly and stop direct marketing to my clients”

INDIVIDUAL/CORPORATE LIFE AGENTS PROFESSIONAL LIABILITY (ERRORS & OMISSIONS) PROGRAM  Broad Coverage

 Legal Protection Available

 First Dollar Defense

 Competitive Premiums

 Prior Acts Coverage

 Excellent Service

 Optional Payments and Monthly Payment Plans Available  Serving Western Canadian Brokers/Agents for Over Ten (10) Years (Manitoba, Saskatchewan, Alberta and British Columbia)

Contact us Now for your Application and Terms Wendy Foster & Betty Lou Schick Program Administrators monarchlife@monarchins.com Toll Free Phone: 1-800-561-1713 Toll Free Fax: 1-866-425-6774

www.lifehealthpro.ca

17  


SPECIAL PROMOTIONAL FEATURE

ASK AN EXPERT

Getting to the heart of cardiovascular underwriting Medical and underwriting breakthroughs are changing the industry’s view on life insurance for people with heart disease, as Marylou Dunn, vice president and chief underwriter at Munich Re, explains THE LIFE insurance industry has always been good at insuring people with risk factors for heart disease, such as obesity, high blood pressure or high cholesterol. But just a few decades ago, the idea of offering any sort of life insurance coverage to applicants with heart disease was simply out of the question in the eyes of many insurance companies. If and when we did insure these individuals, it was very expensive. For those who have been in the business longer than they’d care to admit, it’s easy to remember a time when ratings of 200% to 250%, plus hefty flat extras for two or three years, weren’t uncommon. I’m happy to say that’s no longer the case. Now it’s routine to underwrite and insure these individuals for life insurance at much more favourable rates.

Improving outlook Coronary artery disease [CAD] is still a widespread phenomenon and a concern for life insurers because of the risk of early death. However, medical advances and sociodemographic changes have led to a steady decline of CAD mortality in North America. There have been many contributing factors to the improvement in patient outcomes. For one, the medical community has become much better at early detection and treatment of heart disease through increased and improved screening, early

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diagnosis, improvement in the development of pharmaceuticals and treatment via far less invasive procedures. Lifestyle awareness – in the form of improvements in diet, smoking cessation and increased exercise – also plays a role. In fact, a recent study found each death avoided by treating a patient with coronary disease yielded 7.5 additional years of life, while each death avoided by changing risk factors (mainly smoking, blood pressure and cholesterol) yielded 20 additional years of life. These significant improvements in mortality have increased the insurance

industry’s appetite for risk. However, because of their prior experience in having applicants highly rated or declined, many advisors continue to be reluctant to take applications on individuals with heart disease. This should no longer be the case.

Evolving underwriting For their part, insurance companies have taken significant steps forward in giving their underwriters the tools they need to underwrite these risks. Like all innovation and developments in medicine, the pace at which this is achieved is astounding. Although this


can be difficult, awareness is everything, and remaining informed is key to providing customers with the best service possible.

on the likelihood surviving those events. The risk factors that lead to heart disease also can have profound effects on other physical

“If the underwriter is provided sufficient medical information, a preliminary discussion will give an indication on probable outcome and terms” Recruitment has focused on attracting employees with a background in science and medicine. Underwriters are also keeping up to date through regular continuing education. They’re trained by doctors and experts in the industry who have a special interest in insurance medicine. I’m regularly impressed by the level of expertise expressed by underwriters during question-and-answer sessions at industry meetings. With the introduction of rules engines to handle smaller, uncomplicated applications, underwriters can devote more of their attention to the complex and demanding cases. In addition, underwriting research and development teams continually look to improve and innovate the way in which they accurately carry out risk assessment. This knowledge is then used to improve risk assessment and selection, and provide the best possible terms based on the latest data available. Underwriting guidelines are reviewed every few years to ensure that they take into consideration the improved mortality rates we have seen over the past few decades. All this means underwriters have the ability and willingness to tackle complex medical histories, identify insurable risks and insure as many of these applicants as possible. The mortality improvements that have led to improvements in life insurance coverage don’t necessarily translate into more offers on living benefits products such as critical illness and disability coverage. The underwriting for those products focuses more strongly on the likelihood of having a heart attack or requiring bypass surgery than

conditions such as stroke and kidney disease, which are also claims triggers. CI is not available to anyone with existing coronary artery disease. Given that CAD mortality is on the decrease, life insurance coverage can now be offered in more situations than ever

before, but advisors should have open dialogue with the underwriter. If there are ever any doubts or concerns, if the underwriter is provided sufficient medical information, a preliminary discussion will give an indication on probable outcome and terms. It may be that the heart disease is uninsurable, and the underwriter will be able to glean that from the initial discussion, rather than an advisor having to take the time to go through the formal application process, only to end in failure. Advisors have a tremendous opportunity to service those clients who may not have been considered insurable even a few years ago. A collaborative approach between advisors, underwriters and the industry will lead to more Canadians getting the life insurance coverage they desperately need.

CAN THIS APPLICANT BE INSURED? We haven’t reached the point yet where we can insure everyone, but we’ve become much better at identifying those applicants whom we can insure. Before you take an application, how can you identify applicants who are good candidates for coverage? Here are a few quick tips: How old was the applicant when he or she had a heart attack? A general rule of thumb is that the younger the age, the higher the rating or the more likely insurance won’t be possible. Has your applicant had more than one heart attack or surgery, and how extensive was the coronary artery disease when it was discovered? These can be suggestive of future events and indicative of the extent and complexity of the heart disease. With more extensive heart disease, it becomes harder to insure these individuals. However, we routinely make very competitive offers on applicants who have uncomplicated heart attacks, who have stable angina, or have had angioplasty or bypass. When did the heart attack occur, or when was the angina diagnosed? Concern still remains around individuals who have been recently diagnosed. A postponement of at least six months will likely be necessary to ensure no unexpected progression and that treatment leads to the desired outcome. After this period, the underwriting may be able to offer life insurance on a substandard basis. Does the applicant have other conditions such as diabetes, stroke or kidney disease? Having one of these conditions in addition to CAD makes it unlikely that any coverage can be offered, and most carriers will discourage these applications. The underwriter is also looking for signs that the applicant is well followed by his or her doctor. Any information you can provide regarding doctors’ names and addresses, date last seen, and medications taken will be invaluable. Sometimes it’s necessary to write to more than one doctor to get the complete picture, and getting this information to the underwriter up front will avoid delays in getting the policy issued.

www.lifehealthpro.ca

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PEOPLE

ADVISOR PROFILE

A dying breed Lawrence Geller is one of the rare advisors who specializes in disability, but he’s fighting an uphill battle against misinformation

AS A specialist in disability insurance, Lawrence Geller is part of a select company of advisors. “In the ’80s and ’90s, 40 of us were selling about 80% of the disability in the country,” he says. “Today there might be about 100 selling 80%. Most disability is actually sold by people who specialize in disability.” There are advisors who sell the odd policy during the year, but the number of disability specialists suggests how difficult it is to make a career out of it. “Most advisors I meet who try to specialize in disability find they can’t make a living just doing disability,” he says. “In fact, we do a fair amount of group insurance and a fair amount of life insurance.” That said, disability can be a lucrative segment, thanks to the way the fees are structured. “Disability pays a renewal that is much higher than other products because the service is much greater,” Geller says. “Disability requires much more management on an ongoing basis while it’s in force.” For example, disability is generally written with guaranteed insurability options that come up every year, which requires advising clients on a regular basis. “The insurance company sends a letter, which is very difficult for anybody – including us – to make sense of,” Geller says. So an advisor has to put the information into a format the client can understand, discuss it with them and wait for a decision. “That may or may not result in more income for

you,” Geller says. “So you’re paid a much higher renewal. The upfront is much lower, and the renewal, in most cases, is much higher. I work on a levelized basis, so I get a fairly good renewal every year on my entire book of business, and I live on that, but the life insurance is really the gravy.”

A different approach There’s also a clear difference in the mindset between selling life insurance and selling disability insurance. “Disability is a greedy sale; life insurance is an altruistic sale,” Geller says. “You don’t buy life insurance for your own benefit.” Understanding that mindset has allowed Geller to sustain a thriving business, carving out a reputation as one of the top disability advisors in the country. He’s bucking the trend in Canada, though. A survey by Edward Jones, completed by Leger, found that only 23% of Canadians have purchased disability insurance. It’s an example of the lack of education that surrounds disability insurance in Canada. Worse still, Geller says, is the fact that many advisors don’t really understand whether disability or critical illness [CI] is the right fit. “A lot of agents say you can have CI instead of disability,” Geller says. “It just doesn’t make sense to me. It’s not an either-or; CI is really a bridge. To my mind, you buy CI if you have a bunch of debt. You don’t want to go into disability with a bunch of debt.”

“Most advisors I meet who try to specialize in disability find they can’t make a living just doing disability”

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THE CHANGING FACE OF DISABILITY During an insurance career that’s spanned more than 30 years, Lawrence Geller has seen how disability coverage has changed over the years. “At one point, there were 40 companies selling disability insurance – good-quality disability insurance,” he says. “When RBC bought Unum Provident, my understanding is they picked up 80% of the market. When there were 43 [companies], it was a pretty competitive environment; when there are three or four, it’s not really competitive at all.” The flurry of acquisitions and mergers led to a change in underwriting as well. “Underwriting is far more difficult than it was 10 years ago and much easier than it was 20 or 30 years ago,” Geller says. “What happened is, 10 years ago, they loosened up; there was a lot of competition.” Take multiple sclerosis as an example. It’s a disease where, when someone is first diagnosed, there is no disability. But over time, it progresses to the point where you can’t even get to your desk at the office, until eventually it becomes a total disability. “People with MS will get one lump sum upfront so they can fix their car and their house when they really don’t need it because they’ve just been diagnosed,” he says. “But then nine years later, when they start to lose their income because they can’t work anymore, they don’t have disability insurance.” Another issue facing clients is making sure they aren’t relying on employer-provided disability. “Group disability is very dangerous to rely on,” he says. “Most group disability is for catastrophic loss.” At the end of the day, Geller knows insurance is a tough sale, but all he can do is present the facts. “I am a big believer in understanding what you have and making an informed decision,” he says. “I don’t care what the decision is, as long as it’s informed. One of our mottos is that whatever the client wants, the client gets – as long as it’s legal, it’s ethical, and they’ve listened to our advice first.”

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FEATURES

CRITICAL ILLNESS

Critical illness for kids It might seem like a tough sell, but one company is providing advisors with the means to deliver this important product to clients SINCE THE product’s introduction to Canada 30 years ago, critical illness insurance has proven a tough sell for advisors. It’s had to overcome stringent underwriting, pricey policies and, perhaps more important, the general apathy of the public. As if it weren’t difficult enough selling CI insurance for adults, now try selling it for their young children. It might seem like a lost cause, but CI has real value for children and doesn’t have the same obstacles to overcome as the adult version of the product. “I don’t think many people know about this product,” says Jerry Wiseblott, an

Why it matters As incidents of childhood illnesses seem to be cropping up more than ever before, it’s definitely something advisors should be talking to their clients about. Let’s face it – any parent’s nightmare scenario is for their child to fall seriously ill. Most parents think it will never happen to their kids, but one look at Sick Kids Hospital, where they’ve run out of beds, suggests it’s a very real threat. A child’s serious illness turns a parent’s life upside down. There is the obvious huge emotional toll, but the financial impact can’t be ignored. Not only is there the cost of care

“The insurance companies aren’t promoting it, but there are a number of companies that are carrying it and a number of clients who have asked about it” advisor at KRG Insurance Brokers. “The insurance companies aren’t promoting it, but there are a number of companies that are carrying it and a number of clients who have asked about it. It’s a second thought almost because people don’t want to think about their kids getting sick. It’s a mental thing, that’s all.”

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and medication, but usually at least one parent will have to stop working to care for the sick child. Most families are barely scraping by on two salaries, so getting by on one is extremely unlikely. In a best-case scenario, the child will survive the disease and go on to lead a happy life. But do you think an insurance company

will ever insure them again if they apply as an adult – especially for critical illness?

Making the case An advisor offering a CI policy can change the picture. For more than 50 years, Copoloff Insurance, a leader in the MGA world, has been at the forefront of the critical illness for kids movement, supporting advisors with cutting-edge solutions and advice. “Copoloff is the one that motivated me to sell CI – not the other way around,” says Andre Loisel, an advisor in Quebec. “They believe in it; they are really top-notch and care about the project.” It’s easy to see why. If an illness occurs, CI coverage helps ease the cost burden for a family at the time of the illness. Otherwise, on a limited pay basis, once the payment period has expired, the coverage is there for life. Critical illness for children covers virtually all of the conditions of an adult’s policy but also includes specific coverages for kids,


including type 1 diabetes. It’s also a much easier sale for advisors. “They’re very inexpensive because they’re asking medical questions about the child now,” Wiseblott says. “They don’t do a medical. They just ask medical questions of the parent. Nine out of 10 kids, especially when they’re under three or four, they have no issues. The policies are very easy to sell because there’s no medical underwriting because if the child is not well, they’re not going to give it to them.” While it’s always going to be difficult to discuss a child’s potential for serious illness, some advisors are having success. “You need parents who feel good about insurance overall – so that is a small portion of the population,” Loisel says. “But once you find that kind of response, it’s not difficult. We’ve found more receptivity in the last two or three years. They tend to be open to CI for their children because they tend to buy into the concept of insurability. If you buy the kids’ policy, you’re buying insurability. If

someone is really open to it on the life insurance side, talk to them about CI. They will listen more than others will.”

Not just for parents Alternatively, Copoloff ’s sales team and product specialists, who have more than 25 years of experience, have helped advisors like Wiseblott carve out a lucrative business by going beyond the parents to extended family. “With the help of Elizabeth Lenhan from Copoloff, I found this little niche of selling to grandparents versus parents,” Wiseblott says. “The grandparents have a different relationship with their grandchildren than parents have with their own children. When you talk to grandparents, their love for the grandchildren is not anything you’ve ever seen.” It’s an example of Copoloff ’s commitment to helping advisors, going beyond a simple memo announcing a new product to preparing advisors through in-depth

education and training. Through one-on-one meetings with advisors, Copoloff developed a strategy to target grandparents, who are at a different stage in life than parents. “Grandparents have the money,” Wiseblott says. “They have a little more cash to play with than the parents. The parents are busy raising their children, putting away money for university and this and that, [but] the grandparents have a different take on it.” And if grandparents are going lavish their money on their grandchildren, an insurance policy is a thoughtful gift. “For grandparents, it’s a great thing,” Wiseblott says. Many would “rather spend $700 or $800 on this than go buy them three toys at Toys ‘R’ Us for $250 each.” Copoloff also works to introduce advisors to the sales representatives from each of the major carriers, creating openness between the MGA provider and advisors that might not be there with most other companies. That will help advisors with their whole book of business, not just policies for children. But it’s worth bearing in mind that many advisors have Baby Boomers as the majority of their book, and a large percentage of them are already grandparents or are poised to become so. Buying a critical illness policy for their grandchildren can be a nice legacy to leave behind. “The child will know this is what their grandparents gave them,” Wiseblott says. “He’s got it for the rest of his life. God willing he never gets sick, never needs it, but the policy is always there. You’ll always remember your grandfather bought this policy for you, and that’s the way he thought. He thought of protecting you.” Advisors contemplating selling this product need to bear in mind just how new it really is. Although CI has been around for years, it’s still unfamiliar to many advisors. Through education, advisors can connect with the product and showcase the importance of critical illness to consumers. For more information on innovative ways to discuss CI with your clients, please contact Copoloff Insurance.

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23  


PEOPLE

OTHER LIFE

THE WRITE STUFF

Advisor Kevin Cahill turned personal tragedy into an inspiring book

TELL US ABOUT YOUR OTHER LIFE Email lifehealthpro@kmimedia.ca

ON AUGUST 13, 2013, Kevin Cahill, founder of Canadian Legacy Builder, was on top of the world – but that soon changed. That day, three of the most traumatic events of his life left him emotionally distraught, depressed and filled with anxiety. Two weeks later, he hit his head on a concrete floor, and over the next 18 months, spent time stuck between the healthcare system, the insurance system and the financial system. The experiences – which included

24

Number of days Gaining Clarity: Standing on the Shoulders of Giants spent as an Amazon bestseller

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losing his father to cancer – led him on a journey to interview people about their inspirations, starting with others who knew his father. He originally set out to help others shine their lights on their heroes, but his book ended up bridging a gap between father and son. Three months after Cahill started the project, Gaining Clarity: Standing on the Shoulders of Giants was released on Amazon.com and became an instant international bestseller.

3

Number of months it took Cahill to write the book

26

Number of interviews Cahill completed to write the book


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Wealth Professional Online is an industry hub committed to delivering the latest news, opinion and analysis for today’s sophisticated investment professional. Subscribe to the exclusive e-newsletter and get up-to-the-minute reports delivered to your inbox daily.

FOR MORE INFORMATION, VISIT WWW.WEALTHPROFESSIONAL.CA

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