Disability Insurance Policies for Self-Employed Individuals: Are These Really Necessary?

Alas, one of the pros and cons of self-employment is the lack of insurance that would typically be offered by an employer. Since you are the boss and solely reliant on your own ability to provide an income, then you have to look at the financial consequences to your income if something were to happen to you. Granted, as an entrepreneur you already have enough to think about besides the “what ifs”, but truly it can destroy your business and your personal life in one foul swoop if you’re unprepared for something major that occurs.

Having disability insurance is the responsible thing to do, especially if your family is relying on your income to sustain them. If you are just embarking upon the life of an entrepreneur, this is certainly something to contemplate. Especially if you have been reliant upon a group plan through a company you have been working for, you will need protection to supplement your income in case you become hurt, injured or sick, or suddenly in need to take a leave of absence.

What is disability insurance for self-employed? Do you really need it?

Some entrepreneurs bravely “take the risk” by not carrying any insurance on their own wellbeing. They feel fit as a fiddle, so why pay for something that may just be a waste of money – especially at a time when every penny counts?

Disability insurance is something you pay monthly, just like car insurance or homeowners or renters insurance. Adopting this mindset is similar, because you probably wouldn’t want to take the risk of totaling your car without insurance or having your house burn down without insurance, so why take the risk of something happening to you, which is the most important out of all three? Auto insurance isn’t going to cover your lost wages if you are self-employed, at least not without getting attorneys involved.

It’s just a good idea to have disability insurance rather than going without. However, you must be in good health, so when you’re feeling good, it is the best time to get it. When you check into which policy is best, make sure you read through and discuss the provisions of what is or is not included within the benefits package. Go through every scenario that you can think of.

This the most common type of disability insurance for self-employed individuals:

Own occupation: Provides a total disability benefit if you are unable to practice your chosen profession due directly to injury or sickness, even if you begin working again in a new career.

With this type of disability insurance there will also be two optional riders you can choose, and one is the most obvious and common choice. With either of these disability insurance for self-employment choices there will also be two optional riders you can choose, and one is the most obvious and common choice.
You should have residual disability, which gives you partial benefits if you are still able to work, but only on a limited basis. Most claims fall under this category, so not getting this rider is really a waste to have disability insurance at all.

The second option is a rider that would allow you to increase your monthly benefits at any time, even if you experience a change in health. This one is a good protective measure to make sure you still get compensated even as your income increases – which it should every year – the longer you are in business.

Talk to your insurance rep about disability insurance for your business, even if you are a sole proprietor. No matter what type of industry you are in!

For more information please contact Independent Financial Concepts Group today at 1-416-849-1653 or visit www.wecoveryou.ca. 

Biggest Insurance Myths: Are You Falling Prey?

The insurance industry is wrought with myths and misconceptions. Some people know that life insurance is important, but don’t really understand why, or at which point in the life cycle it should be acquired. Others don’t actually see the value in it at all and thus leave themselves or others in a financial dilemma when something unexpected happens.  Don’t fall prey to insurance myths. 

Here are the top three myths that far too many people buy into when it comes to life insurance. 

Myth #1: I am young, single, and don’t have any dependents – I don’t need life insurance. 

Reality: Even if you don’t have dependents, you likely have financial responsibilities, so what will happen to these if you are gone? Mortgage, car payments, loans, other personal debts – these will all need to be paid off, so who will these payments fall to? 

What about funeral coverage. Most of us, especially when young, don’t really want to think about funeral planning, but ignoring that fact that these are costly can leave your loved ones in a bind if some form of preparation is not done.  

With insurance, rates increase as you get older, so this is another reason that this myth is not accurate. Even if there are no dependents on the scene right now, things change. When they do, and you decide to finally get insurance, you will pay more. 

Myth #2: I'm better off investing my money than buying life insurance of any kind. 

Reality: Firstly, you need to identify the difference between investments and insurance before you jump to any conclusions, and keep the two separate. Investments involve risk, can include stocks, mutual funds or real estate, and the idea is that the risk will equal reward in the form of higher return. Insurance is primarily a policy that guarantees financial security to loved ones in the event of your death. 

When you invest, there is no guarantee that your money will grow or even remain stable, so banking on this can prove futile if you are not careful or take big risks. On the other hand, some insurance policies can be used as investments (whole life insurance for example) while still providing a guarantee that money will be there in the end if something happens.  

Myth #3: My term life insurance coverage at work is sufficient. 

Reality: Employee provided life insurance varies greatly, so it is critical, first of all, to review your policy and check the coverage limit. Some companies will provide adequate coverage, while others may only cover funeral expenses, thereby leaving all of your other financial responsibilities to your loved ones to take care of. 

Secondly, even if you feel as though your employee provided insurance is great, what happens if you leave the company or lose your job? Perhaps you feel stable in your current position, but you never know what could happen down the line and your coverage won’t follow you if you leave.  Additionally, if you leave at a later date and then search out coverage to supplement or replace a new employee provided policy, your rates will be higher (rates go up as we age). 

Insurance is a complex entity, and it can be easy to fall prey to the common misconceptions about it. Not knowing what type of policy you need or the amount of coverage can be easily remedied by talking with an insurance advisor, but avoiding insurance all together is a bad idea! 

For more about common insurance myths and how to avoid falling prey please contact Independent Financial Concepts Group today at 1-416-849-1653 or visit www.wecoveryou.ca.  

Factors that Impact Health and Life Insurance Coverage

When searching out insurance providers, it always helps to have some knowledge in your pocket. When you purchase life insurance, your premiums are based on a number of different factors, and when it comes to breaking down cost it can be really tough to get a real sense of why your rate is what it is. In an effort to help you navigate this confusion we thought we’d provide a breakdown of the most common factors that impact health and life insurance coverage. 

Age: The older you are, the more you will pay – this is just a fact of life, based simply on the fact that when you are young you are less likely to pass away. This is why it is important for younger individuals to purchase life insurance early.

Current Health: Some companies nowadays promise coverage without a medical exam, but others require it as a precursor to providing coverage. Why? This exam checks for any health concerns that may signal future problems (high blood pressure for example). Weight is also part of this – if you are overweight this may become problematic (if it isn’t already). Any negative aspects will lead to higher rates.

Gender: Gender equality is important, but when it comes to insurance your gender does play a role with regard to life expectancy. Typically, women live longer than men, and so women usually pay lower rates. 

Health and Family History: Any history of disease, chronic illness, or other potential health problems either in your own health history or your family health history, is perceived as a risk factor, and will thereby increase rates.

Smoking or Drinking Habits: It is a well-known fact that these can contribute to less than ideal health, so if you smoke or are a heavy drinker, expect to pay a little more.

Occupation: Again, it is all about risk here. If you skydive for a living your rates are likely going to be a bit higher than someone who sits behind a desk all day.

The Policy Itself: Every policy is different, and so it is important to know what you want and need as far as insurance, as well as how this will impact rates overall. Make sure you discuss all of your options, including the term, the amount of the death benefit, and the type of insurance, with your insurance advisor before you decide which policy is right for you.

An easy way to remember these things is by thinking about risk overall. An insurance company needs to evaluate risk and so if something seems risky, you are probably going to pay more.

For more about the factors that impact health and life insurance coverage please contact Independent Financial Concepts Group today by calling 1-416-849-1653 or visit www.wecoveryou.ca. 

Competition: Keeping Up With Insurance Industry Trends

Recent reports within the insurance industry have had a lot to say about the many changes taking place and their corresponding impacts. Competition is growing even fiercer as technology improves, and keeping up with these changes is critical. If you work with an MGA, it is imperative that there is a plan in place to counteract any revolutions within the industry. 

Here is our list of the top 3 insurance industry trends for 2013, what they mean for you and how to handle them. 

1.      Newest technology and programs. Advisors across Canada as constantly working to keep up with the newest technology and programs being released every month (and if they are not, chances are they are quickly falling behind the rest of the pack). Keeping up-to-date and up-to-speed can be tough, but if your MGA employs the newest programs and offers training to help you become efficient using them, you are already ahead of the game. Those managing general agents interested in their own success will provide this. Social media is also a part of this – don’t discount its power. Make sure that your MGA takes advantage of social media – you will benefit from a strong online presence.  

2.      Mobile and online quotes. Canadians are turning to their mobile devices far more frequently than in the past to complete everyday tasks – and this includes buying insurance. This creates some stiff competition, as well as increasing the need for rapid response (call-backs, processing of applications) and the ability to offer far more selection. As an advisor you need to be able to compete. Investing through insurance is becoming even more popular (i.e. segregated funds) so you need to make sure that you are able to offer a wide array of products – not just insurance. Social media plays a role here to – clients using mobile devices need to be able to find you. If they can’t that could mean a potential client lost.  

3.      Confidentiality in a digital world. Confidentiality has become a big problem in the insurance industry, even more so for independent advisors. Nowadays you have to be sure that client information is incredibly secure. If you work with a managing general agency make sure that they have technological programs in place to protect client information. Anything you take from a client has to remain secure within your system. If it doesn’t that could mean big losses and potential liability for both you and your MGA.

 

No matter what industry you work in, tech advances and industry changes can wreak havoc on traditional modes of conducting business. It is no different in the insurance industry, so be sure that you are keeping well-informed of these changes and implementing strategies to utilize and make the most of them. 

For more information about insurance industry trends and how they will impact you please contact Independent Financial Concepts Group at 905 202-8430.

Be In The Know: Top 5 Tips When You Buy Life Insurance

Life insurance is a must for the future, but it isn’t something that you should just purchase at random – you need to be prepared. When you buy life insurance, you are doing so to protect yourself and your loved ones in the future, so take the time to get the policy that best suits you.  

Want some advice? Here are our top 5 tips to consider when you buy life insurance: 

1.      Know what you need. This is the most important step, and these needs have to be clear before you even start looking to buy life insurance. Think about what you want the insurance for, who is or may become dependent on you in the future, long-term financial and life goals, and retirement income. A good insurance advisor will ask you about these things so it is important to reflect on them carefully. 

2.      Do your research. Before you buy life insurance it is smart to understand the differences between each policy and what the pros and cons are for each type of insurance. If you don’t understand the differences, ask. Whole life insurance is insurance for your entire life whereas term life covers you for a specific period of time. Other insurance plans may be more suited for investments – you need to be clear on what you are buying and why. 

3.      Don’t buy direct. When setting out to buy life insurance, never go directly to the insurance company – they can only offer you their products, their services and their prices (there is no room for comparison here). Also, because they are more interested in their own needs than yours, they will try to sell you all the unnecessary bells and whistles – don’t buy into this. 

4.      Work with a broker. Instead of going direct, work with an insurance broker. An insurance broker with access to a number of different companies can comparison-shop for you, offering you the policy that meets your needs at the best rate. They will also be able to offer various products, and you can be sure that you are more than just a number – their success is based on your satisfaction – so they need to be sure that you are happy.

5.      Don’t let price dictate your decision. When you buy life insurance, price should never be the determining factor. There are many cheap policies out there but cost often reflects quality – and so don’t go cheap. That being said, the right insurance advisor will be able to explain the differences in price and how each policy works. 

When you buy life insurance, make sure that you are getting exactly what you need. Let these tips guide your search. 

For more tips to use when you buy life insurance, please contact Independent Financial Concepts Group today at 416-849-1653.

Cost or Quality: The Cost of Life Insurance & Life Insurance Benefits

A common misconception with life insurance – and the reason that so many fail to secure it at the right time – is that they do not see adding the cost of insurance to their budget as a must, unlike other insurance such as car insurance. This is especially true with younger consumers. The actual cost of life insurance is far cheaper than many believe – and when you factor in all of the benefits that different life insurance policies carry, these seriously outweigh the financial cost to be insured. So what is stopping some Canadians from seeking out their own life insurance? 

The most common myths – that insurance is too costly, that it isn’t necessary ‘right now,’ or that it is just a way for insurance companies to make money – often keep people from even looking into the life insurance benefits that will become necessary later in life. A recent Financial Post article confirms that these misconceptions exist – but that they shouldn’t, stating that all Canadians should have some form of life insurance to protect their future. 

The Financial Post article went on to say that it is especially important for younger Canadians to secure life insurance – for more than one reason: “Not only does insurance give people with young families piece of mind, but the reality is, teenagers, and even children, should have policies to protect their parents from financial burden too.” 

Not only is it smart to get that protection in place for the sole benefit of financial security for loved ones, but the younger the person is when purchasing the policy, the cheaper the premiums. And depending on the type of insurance, these premiums may remain fixed for the entire duration that the policy is in place. 

Another big reason that people don’t seek out their own life insurance is because they have a false sense of security that they are covered through their employer’s group policy. The reason that we say false sense of security is because most life insurance offered through company group policies will cease when you stop working for the company. Insurance is more expensive as we age so if you lose your job you will be facing higher premiums later when seeking out your own life insurance coverage.

So what is stopping you? Is price the determining factor when purchasing life insurance? It shouldn’t be. The real cost of life insurance should not actually be determined until you speak with an insurance advisor. By doing this, you are able to ask the relevant questions and work with the advisor to determine the best policy for you. And when you are given the cost of the monthly premium you need to consider what the end result of the policy brings. Quality needs to be measured, and if your insurance advisor has developed the right policy for you, the cost of life insurance won’t seem nearly as high as you originally thought.

No matter what age you are (as the Post article discussed), having some kind of life insurance is a very important part of your financial planning for the future – whatever your goals may be.

For more information about the cost of life insurance and life insurance benefits, please contact Independent Financial Concepts Group today at 416-849-1653.

Freedom of Independence: Your Career as an Insurance Advisor

The freedom of independence that can come from a career as an insurance advisor is a big draw for many individuals. The flexibility and choice can mean big gains if you are willing to perform – but what if your MGA is not as willing?  You need to be sure that the managing general agency you choose to work with is the right one. There are vast differences even between individual managing general agencies, so it is important to do your homework to ensure that your choice is one that will allow you to maintain your independence while still helping you achieve your future goals. 

Independence innately implies a level of autonomy, but that shouldn’t mean you have to do everything alone. By working with the right managing general agency you can have access to the support that helps you achieve without taking away your self-sufficiency or freedom. Office space is also important – if you work from home the majority of the time, or on the road, it is still important to have that space available. The best MGA should provide this.

Another part of this independence involves your clients. At the right MGA, your clients are your own, and they are vested to you immediately. That is the only way that you can ensure continued stability. When you have worked hard to gain a strong and stable client base no one should be able to take that away from you. By having your clients vested to you immediately you save yourself the hassle of trying to get them back if you ever decide to leave, and you can be sure that those clients are always receiving the highest level of support that you pride yourself on.

Responsiveness is crucial in the industry, no matter where you are, and it can make the difference between lost sales and made sales – every time! Make sure that one of the commitments your managing general agency makes is to respond to your calls promptly. After all, if your clients have to wait for you to return a call they may not be satisfied with the level of service they feel they have received. Your applications also need to be processed quickly, so your managing general agency should have a plan in place to ensure this as well.

As an insurance advisor working with an MGA your independence should not be an impediment to success. Make sure that your managing general agency provides you with the tools necessary to earn while still remaining free from constraints.

For more information about how the right MGA can give you the freedom of independence please contact Independent Financial Concepts Group by calling 905 202-8430.