Recently I was approached by a reporter asking about non-medical life insurance. They were interested in my thoughts about which company in Canada offers the best products and what I thought the most common mistake was that consumers make.
This is a great question many people probably wonder about, so I thought I would share my response.
1. Who has the best “no medical” life insurance policies, and why?
“The best no-medical policies are the ones that pay a claim”
This is not a black and white question. There are a number of companies in Canada that offer this type of coverage. In order to make a recommendation I need to understand the individual situation and depending on the situation, I can recommend a number of companies.
If someone came to me and told me they want to buy no-med life insurance, I have questions to ask, and there is no one company that is the best. All life insurance companies are good – simply good for a different reason or different people. The first thing I would ask is “Why do you want no-medical life insurance?”
- Is it because of your health?
If so I would ask more questions about the health issues. I can take the case to a variety of insurance companies to see how they would treat the case. Perhaps the client might be “rated”…But this could still be a better product and cheaper alternative to no-med life insurance.
- Is it because you don’t want to see a pushy agent?
If this is the case, ask around; see if you can get a referral from a professional you trust.
- Is it because you don’t want to see a nurse?
Depending on the coverage amount and the company you buy from, you may not need to see a nurse. If this is really important to you, we can plan around it…but you might have to pay for it in premiums.
Also – I am not sure what you mean by no-medical life insurance. Many companies offer policies up to a certain coverage amount without having to do medical underwriting. The client may be able to buy traditional insurance without having to do a medical.
To circle back to the original question – The best policy is the one that pays a claim. In a guaranteed or simplified issue life insurance case – this could mean the company that has the least amount of questions. When it comes to claim time, they will be looking at the application to ensure the information you provided is in line with your real health picture (Less questions, less opportunities to deny the claim).
All of the above is why it is so important to work with a real broker that represents a wide variety of Life Insurance companies. A true broker will work with you in an impartial manner to find the best solution.
2. In your opinion, what is the biggest mistake people make when buying no medical life insurance?
In my opinion the biggest mistake is the same as with any insurance. People don’t really understand what they are buying and why…as well what their alternatives are.
For example – People might not realise if they are buying guaranteed issue insurance that it is underwritten at claim. This creates a “what if” around the payout of the claim, and means that you should be very careful. My recommendation is to disclose as much to the insurance company as possible. If it asks you if you have smoked in the last 5 years and you quit 6 years ago…Tell them that make voluntary notes.
A major mistake that people make is they don’t work with brokers who work with a wide variety of companies. Many brokers call themselves brokers but only really work with a handful of companies.
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