As Canada is now facing an aging population, insurance companies are now focusing on preventative rather than reactive measures when it comes to potential health issues. Insurers are now building comprehensive databases of health information for the clients that they insure. These databases contain the details of health issues that can range from drugs that are prescribed, chiropractic visits, etc. This information will be used for the purposes of being able to more accurately predict those who may be at risk of having and/or developing major health issues, i.e. chronic diseases.

By focusing on preventative measures, insurers hope to be able to effectively intervene before the health problem becomes severe, which usually also means more expensive, in order to help the individual take action to either manage and/or prevent the health condition from becoming worse. Not only is this strategy beneficial to the person, but also to the insurance company by keeping costs lower. Some insurers are also planning to take even more immediate action; Manulife Financial is implementing a new program that will benefit providers by setting up a workplace clinic which will be able to provide employees with the resources to test such health concerns as cholesterol levels, blood pressure rates and body mass levels.

One of the issues that insurers are hoping to accomplish is to quantify the value of good health by attaching a dollar value to activities that promote a healthy lifestyle. By using this strategy, insurers hope to be able to convince employers to establish wellness programs for their employees that would ultimately result in the cost of employee benefits being reduced. This would ultimately save money for not only the insurers, but for the business, and of course the employees benefit from being able to access services that improve their health.

With new medical breakthroughs and treatments, Canadians now have a longer lifespan. However, living longer does not necessarily mean that this population is living a healthy lifestyle. Medical costs tend to rise for people as they age; they also tend to be more expensive for health conditions that are more advanced. Healthy living as well as early detection practices are beneficial not only for the individual, but for those who cover these expenses.

As life and health insurance rates are based in part by health status, premiums are lower for those who are healthy. Consult with your employer about ways to promote health in the workplace, and ways to encourage these practices.

2009 has definitely been a financial roller coaster ride for many Canadians. Many experienced financial stress; all the uncertainty did make many Canadians review their financial planning.

RBC recently did a survey through Ipsos Reid to assess how Canadians felt about their existing life insurance coverage. Out of more than 1000 Canadians polled, only 68% said that they felt confident that they had enough coverage for them and their family's needs. Adults who have children were more concerned about life insurance coverage in regards to the death and/or disability of a parent. 75% of parents polled said this is one of their biggest financial concerns.

As well, those polled showed that more than half of Canadians felt that they suffer from too much stress in their lives; parents felt particularly vulnerable to stress. 7 out of 10 Canadian households that have children admitted they experience too much stress; 51% of households without children reported these unhealthy levels of stress. They also are aware that high stress levels can contribute and/or exacerbate health problems as they get older.

When it came to the challenges of what these people would do to reduce their stress and lead healthier lives, the poll showed at:

•    55% were not willing to give up television watching time;
•    45% were not willing to give up eating red meat;
•    34% were not willing to give up their alcohol consumption
•    More than 75% of those polled felt they maintained healthy eating habits most of the time;
•    Men seemed to experience less willpower when it came to indulging in unhealthy behaviors; half were unwilling to give up red meat to add five health years to their lives, 4 in 10 women were willing to make the change.
•    39% refused to give up alcohol in order to improve their health; 28% were willing to.

As the holiday seasons have traditionally been a time when people eat foods that they know are bad for them, overindulge in alcoholic beverages, etc. this may also be time to reflect how your lifestyle suits your life insurance coverage. Especially owing to the uncertain financial times other safeguards such as savings may no longer be in place or at the right dollar amount. After the holiday season may be the perfect opportunity to review your financial planning strategy and make sure that your coverage is reflective of your needs for the upcoming year.

Despite the current uncertainty in the Canadian and global economy, the Canadian Real Estate Association claims that residential house sales in Canada actually reached the highest level ever for the month of October 2009. As well, the average sale price was up by over 20% from October 2008. This increase in residential house sales is being credited to low interest rates. Currently the average mortgage rate is 4.55, which is a decline from 5.41 which was the average for 2008. As well, consumer confidence is also being credited for the increase in residential home sales.

Out of all the provinces, British Columbia had the highest monthly gain in residential real estate sales; B.C. also had the most dramatic decline in sales last year. British Columbia has traditionally always had the highest real estate prices as well as the highest average mortgages. Vancouver's sales have risen to 117% over the past year. The Canadian Real Estate Association is now forecasting national activity in residential home sales will reach over 460,000 units in 2009 which is an increase of 6.6% from last year. The national MLS home price average is forecast to climb 4.2% in 2009; this will reach a record of $317,900.

This is the first time that residential home sales have increased in price since the spring of 2008. This means that purchasing a home may now be less affordable for Canadians, according to a new study by the RBC Housing Affordability survey. This survey measures the proportion of pre-tax household income needed in order to cover all the necessary costs of home ownership. This measure rose for all housing types in the third quarter, with standard bungalows and two storey homes seeing the biggest gain.  Demand for housing has now outstripped supply since the recovery in real estate sales began last winter.

For those Canadians who want to take advantage of the low mortgage rates to buy a home, mortgage insurance coverage must also be considered. Most lending institutions require mandatory mortgage insurance. However, mortgage insurance does not have to be obtained through the lending institution, although almost all do offer this coverage. Term life insurance in an amount that covers the mortgage can be a better alternative to bank mortgage insurance. Term life also offers several advantages that bank mortgage insurance does not. Term life insurance offers the homebuyer the advantage of naming the beneficiary of the policy. When purchased through a lending institution, the mortgage insurance policy names the bank as the beneficiary. When using term life insurance the policy is owned by the homebuyer, not the bank.

Another advantage to using term life to insure a mortgage is the option of purchasing a policy that can be converted into whole life insurance upon completion of the term. This allows the homebuyer to buy a term life policy when they are in good health, and the rates are less expensive. Some convertible policies will not require any additional medical information, but will be based on the original health status.

When shopping for a home, and mortgage, consult with your insurance broker about using term life insurance to insure the mortgage and explore all the options. Many times term life insurance is also cheaper than the coverage offered by the bank. For more information on using term life insurance, please visit our mortgage insurance page.

With an estimated 2.6 millions being self-employed, the Minister of Human Resources and Skills Development has announced that the Government of Canada has introduced the Fairness for the Self-Employed Act. This new legislation is intended to extend Employment Insurance (EI) special benefits which will include maternity, parental, sickness and compassionate care benefits for those Canadians who are self-employed.

Traditionally, Canadians who are considered self-employed have had little and/or no income protection in regards to major life events. Situations such as sickness or injury, giving birth, caring for a newborn and/or a newly adopted child, or assuming the care for a gravely ill family member have usually only been covered for those who are employed by an employer and who are entitled to EI benefits through paying via their weekly deductions.

The Fairness for the Self-Employed Act is aimed at rectifying these situations which face not only those who have employers, but also those who are self-employed. This act is in response to the Federal Government's 2008 pledge to help provide improved economic security as well as support for all Canadians who are self-employed. These changes will allow self-employed Canadians to voluntarily opt into the EI program in order to be eligible for these special benefits. These special benefits are intended to closely mirror those that are currently available to salaried employees.

Through the new legislation, self-employed Canadians who opt into the EI program will be eligible to receive special benefits that are currently available to salaried employees such as:

•    Maternity Benefits. 15 weeks are available for birth mothers and covers the period surrounding birth; a claim can start up to 8 weeks before the expected due date.
•     Parental/Adoptive Benefits. A maximum of 35 weeks are available to biological or adoptive parents for caring for either a newborn or a newly adopted child; this may be taken by either parent or shared between them. If the parents are sharing, only one waiting period must be served.
•    Sickness Benefits. A maximum of 15 weeks are available for a person who is unable to work due to sickness, injury and/or quarantine.
•    Compassionate Care Benefits. A maximum of 6 weeks for a person who temporarily has to be away from work in order to provide care and/or support to a family member who is gravely ill and has a significant risk of dying.

In order to be eligible for these benefits, self-employed Canadians will be required to opt into the program at least one year prior to claiming benefits. They must also be responsible for making premium payments starting with the tax year in which they apply to the program, i.e. a program start date of January 2010 mean that claims can be made as early as January 1, 2011. In order to access EI special benefits, self-employed Canadians will need to earn a minimum of $6,000 in self-employed earnings over the preceding calendar year.

Self-employed people can also opt out of the EI program at the end of any tax year if they have never claimed benefits. For those who have claimed benefits they will have to contribute on self-employed earnings for as long as they remain self-employed. Self-employed Canadians will pay the same EI premium rate as salaried employees, but will not be required to pay the employer portion of those premiums as they will not have access to EI regular benefits.

Starting in 2010 Canadian banks will be prohibited from selling insurance products via their primary websites. Currently Canadian top banks such as the Royal Bank of Canada, Bank of Nova Scotia, Bank of Montreal, CIBC and the Toronto Dominion Bank offer their customers the option of purchasing insurance online from their main banking websites. The Minister of Finance Jim Flaherty announced that the new rules regarding the sale of insurance products over the internet will become applicable when the next budget comes into effect in early 2010. This will essentially reverse a decision that had been made in favor of the banks earlier this year.

The Bank Act prohibits the banks from directly selling insurance in their branches; however the Office of the Superintendant of Financial Institutions (OSFI) ruled in June that a bank website is not the same as a bank branch, thereby allowing for the sale of insurance products online. However, Flaherty considers a bank’s primary website a virtual bank branch, making the sale of insurance against the rules. Recently Flaherty faxed letters to the CEOs of Canadian banks requesting that they change their websites to preclude the sale of insurance; most banks have not complied with this request. Flaherty has stated that he intends to change the Canada’s Bank Act to prohibit banking websites to sell insurance, making this current practice illegal.

The Canadian Bankers Association, which represents 50 Canadian banks, claim that Flaherty made this recent change without any consultations with either the public or the banking industry. In an emailed statement, the CBA said they were “shocked that Mr. Flaherty would want to limit how and where consumers can access information about insurance.” Flaherty’s decision to amend the current legislation came as a result of Liberal MP Alexandra Mendes introducing a private member’s bill, which, in her opinion, would level the playing field between independent insurance companies and Canadian banks. The insurance brokerage industry has previously complained to the federal government as well as lobbied MPs about this issue.

While some members of the insurance brokerage industry are welcoming these proposed changes, others fear these new rules will impede Canadians from being able to make informed choices due to insurance information being restricted. The internet affords Canadians the opportunity to quickly and efficiently be able to compare insurance quotes, the type of insurance products offered, etc, without being pressured by a sales agent. Currently people can ‘surf the net’ and research the different types of insurance that are available, and can compare the not only the costs of available insurance policies, but to also compare the different types of policies available. This allows people to benefit from having the most information available in which to make their decisions. It also allows for people to become aware of different types of insurance which they may not have known was available. As well, a healthy competitive market means that the consumer benefits from no one specific company being able to monopolize the industry.

It is important for anyone contemplating purchasing insurance to do their own independent research and compare quotes as well as what those specific policies offer. While it may make sales a little more competitive for the insurer, it allows for the consumer to benefit.