Tips on your life-health insurance contract

In Ontario, when you buy life or health insurance, the Financial Services Regulatory Authority of Ontario (FSRA) protects you by ensuring insurance companies and life and health agents are properly licensed and that they comply with the Ontario Insurance Act.

When you have selected your life & health insurance agent or company, you will discuss your health and life situation with them and what coverage makes sense for you. It is important to be frank and open about your life, health and short- or long-term financial goals. This will help your agent or company recommend options that meet your needs and circumstances. You can expect that an agent will ask you personal questions, including what you can or cannot afford. Any information you provide is confidential.

When explaining you the policy options, your insurance broker should provide you with written policy illustrations that help explain how the products they are recommending might perform over time depending on interest rates earned within the policy.

Tips on your life-health insurance contract

Here are some tips on your life-health insurance contract:

• Double check all information: Carefully check the correct spelling of all names, addresses and phone numbers, insurance company contact information, the duration of the policy, beneficiaries and premiums to ensure all information is captured accurately.
• Get familiar with the terms: It’s a special language and your policy should have a list of definitions written in plain language that you can understand. Familiarize yourself with the terminology found in the policy and if you don’t understand something ask your life insurance broker.
• Know your coverage details, riders and exclusions. Any policy illustrations previously discussed should also be attached. Remember policy illustrations are estimates – there are no guarantees. In most cases, your application should also be attached. Be aware of any exclusions in your policy – there are certain risks and conditions that your insurance company will not cover.
• Illustrations: It is important to understand that the illustrations are not part of your contract, as not all the features of an insurance policy (e.g., cash value, dividends, premiums, death benefits) may be guaranteed. Insurance companies cannot predict the future any more than you can. They are making an educated guess about how a policy could perform.
• Know your benefits (for health insurance): Your insurance agent may provide you with a booklet that outlines the key features of your plan, which may include receiving up to 100% coverage by coordinating benefits with your spouse/partner. Review the deductibles, co-insurance, maximums and premiums so you know how much you have to pay for medical expenses.
• Check the eligibility requirements to make sure you and your dependents are covered. If you requested certain riders, make sure they are represented correctly.
• Learn about your rights and privileges: As a consumer you have the right to cancel a life insurance policy within 10 days. You may also have the right to convert your term policy into a permanent policy when it expires.
• Be truthful: Remember that misleading or mistaken information can invalidate your policy and death benefit.

If you see anything that you don’t understand, ask your insurance agent or company. If you have life insurance or supplementary health and/or dental insurance through your employer, ask your human resources representative for clarification right away. If you see anything that seems wrong, talk to your insurance company. It is your responsibility to make sure you understand what you are buying and that all of your information is correct.