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Let me says this 1st: Life Insurance CAN be important to have.
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An excellent Consumer Protection Article from the Internet

       SOURCE:   http://www.compuoffice.com/litts.html

This will make you an Expert & Really Mess-Up a Life
Insurance Salesman that has his OWN best interests at
heart, and not Your own!

     "DAVE -" can be reached,
     directly on the Internet  - at: dphilips@ican.net

NB:  This is probably the most cynical approach, however,
that I have ever seen, and is almost a blatant advertisement
for a specific Life Insurance software comparison package,
while knocking another companies software in a subtle manner.

However: There are Superb Consumer Tips & Info. here.
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Life Insurance Traps, Tips and Suggestions
================================
Life insurance is an important and integral part of comprehensive and
sound financial planning. A life insurance policy is a legal contract
between you and the life insurance company.  While price is an
important consideration, the terms and conditions of the contract
are of utmost importance.

In simple terms, you agree to pay money in regular instalments
(the "premium") and the insurance company (subject to the terms,
conditions, limitations and exclusions of the contract) agrees to
pay a sum or sums of money if you die and/or if certain other event(s)
 or actions or situations occur while the policy is in force as set out
and defined in the contract. Just like any other contract, life insurance
contracts have terms, conditions, limitations and exclusions. Some life
insurance contracts are relatively 'simple' whereas others are highly
complex legal-financial documents.

Tip: Make sure that you understand the policy, its terms, conditions,
limitations and exclusions before you accept the policy. Any
ambiguity should be clarified in writing.


Trap: "No agent" Mail order life insurance
=============================
Tip: The slick sales pitches of the "no-agent", mail order life
insurance  ads are best to ignore.

The insurance peddled by these canned sales pitches may turn
out to be more expensive than competitive insurance normally
available on the market.

Seek the advice and assistance of a qualified professional life
insurance agent, broker or financial planner to help you assess
your needs and to choose the life insurance contract that best
suits your requirements.

It is also important to remember that the application forms a part
of the life insurance contract. An error on the application could
void your contract and could result in no coverage at all. Don't
gamble with mail-order insurance.


Trap: Signing a life insurance application before carefully reading
and reviewing each question and answer

Tip: Never sign before you carefully read the
application and all entries made thereon.

Remember, the application forms part of the contract.
Check to make sure that the application is fully and
properly completed. "If in doubt check it out!" Don't be shy of
asking questions. A professional and knowledgeable life insurance
agent, broker or financial planner will be more than happy to explain
each and every item to you. Don't take a comment such as "it's
not important" as an answer. Every item on the application
is important and may affect your coverage.

A fully and properly completed application will expedite issuance
of the policy and will reduce the potential of difficulties later on.



Trap: Replacing your existing life insurance contract without very
careful examination of available alternatives. The following are
some of the reasons why replacing an existing life insurance
contract may not be to your benefit

Contract arrangement costs (known as acquisition costs) have
already been paid by you for the existing contract. By replacing
the contract, you may be paying for these acquisition costs again.
 Acquisition costs include but are not limited to:
     Advertising and Commissions
               Medical examination fees
               Underwriting costs
               Administration costs
The cost of insurance portion of the premium for life insurance is
dependent on the age at which you purchase the life insurance
contract. Since the existing contract was purchased at a younger
age, it is very likely that you will be paying more for a new contract
having the same or similar benefits.
Most life insurance contracts contain clauses which may lead
to denial of payment (denial of claim) by the insurance company
during the early years of the term of the contract. The two most
common exclusions, normally applied during the first two years
of the contract, are the suicide and incontestability clauses.
     These clauses may have already expired in your existing contract
(this is to your benefit) while in the replacement contract these clauses
may be in force again (certainly not to your benefit).
     (Canada) Replacement of a contract of life insurance which was
acquired prior to December 2, 1982 (or in the case of corporate
insurance,  June 29, 1982) may cause the loss of valuable tax advantages.
     Since your health may have changed, your insurability
(acceptability to the insurance company) may be adversely affected.
A replacing contract may therefore be more costly and may contain
additional contractual restrictions and/or limitations.

Tip: If someone suggests that you replace your existing insurance,
take the following common-sense financial self defence steps:

     1.Demand a completed "Basic Disclosure Statement Regarding
    Replacement of Contracts of Life Insurance" for each of the policies
considered for replacement and do not terminate the existing policy.
     2. If the replacement is recommended by someone because your
needs have changed, consult with the existing insurer ( the insurance
company who you have the existing insurance policy with) to see whether
the existing contract could be amended to suit your current needs.
(You may be able to avoid some or all
     of the costs and traps associated with replacement)
     3. Get another opinion from an independent life insurance
         or  financial planning professional.(Pay him for his/her time)


Trap: Replacing existing individual life insurance with creditor group
life insurance. The sellers of group creditor insurance normally refer
to such life insurance as "Mortgage Insurance", "Credit Card Balance
Insurance", "Loan Balance Insurance" etc.

          Tip: Don't do it!

In addition to the other hazards involved with replacing of life insurance
contracts (see above), the following hazards, risks and uncertainties
are added when individual life insurance is replaced with group creditor
insurance:

     Group creditor insurance coverage normally decreases as you pay
off the loan or mortgage but the premiums you have to pay often remain
the same or even increase over time.  Normally you cannot continue
with the same group insurance if you decide to re-finance the mortgage or
the loan with another lender. If your health or other factors affecting
insurability change, it may not be as easy to shop the market for the
best loan rate and to keep the insurance.
     If your health or insurability deteriorates, you run the risk of your
lender getting this information and this, in turn, may affect your ability
to renew or continue with the loan itself.  With group creditor insurance,
the creditor is almost always the beneficiary.  If the policy expires
before you do...they profit  If you expire while the policy is still in force...
they are usually the beneficiary.
     You will rarely, if ever, get a fair opportunity to fully examine the
policy contract. (Normally all you receive is a single 'certificate' which
is subject to the Master Policy which, of course, you don't normally get)
     You have less regulatory protection since the regulators rarely, if ever,
 require that the creditor complete a comparison disclosure form when
they replace individual insurance with their group creditor insurance.
     You have far less control and the group creditor life insurance may
 be cancelled with little or no notice to you.

     Trap: Snappy and Sloppy "needs analysis"

Snappy and sloppy so called "needs analysis" that are short on
substance but long on the gab can be next to worthless.  In most
instances these are nothing but disguised sales pitches.  A proper
needs analysis is detailed and takes into account your existing
insurance, your existing financial resources and assets, government
benefits, your income needs, your tax liabilities, other liabilities etc.

In a proper needs analysis, each of the above details is shown
clearly in an easy to follow and understand format.   A proper needs
analysis also provides for adequate reserving for unforeseen expenses
and liabilities. The preparation of a full, fair and proper needs analysis
requires the right tools, such as <Co. Ad>, and the knowledge and
expertise of a qualified life insurance agent, broker or financial planner.

Tip: Avoid the trap of quick, sloppy and snappy so called 'needs
analysis' which may be long on words but which lack detail or fail to
take into account the minimum requirements as set out above.


Trap:  The illusion of so called "comparisons" where you are
     shown only a small number of choices

In these smoke-and-mirror "comparisons", a small number of choices
(sometimes as few as only five) is shown under the pretence of
 "comparison".  In such a so called "comparison", your range of
choice is very limited and better options are often missing.

     Tip:  Be sceptical of these illusions.

If you are presented only with one of these "5-pick" or "10-pick" type
 "comparisons", demand to see a detailed print-out of an overall survey
of available options over the same number of years .  If the sales rep
refuses or is unable to comply, give him/her a "pick-2" - the choice of
leaving through the front or rear door!


Can you trust Internet-distributed or 'junk-mail' distributed
 'Do-It-Yourself' term insurance quotation programs?

These programs are worth about what you paid for them and are
essentially a clever sales pitch.  There are many similarities
between the hazards of "mail-order" life insurance and these "free"
junk-mail' or Internet-distributed, 'do-it-yourself' term insurance
quotation programs.

One such program, distributed by junk-mail (unsolicited mail) and
on the Internet, and targeting Canadians, claims to provide:

"Unbiased term life insurance comparison software"
     and claims to have:
"New rates (which) reduce premiums by 30%"

When these claims were checked against Canada's premier
multiple company life insurance software, <Co. Ad>, it didn't take
long to discover that this rudimentary 'initial-premium-only' term-rate
-sorting program failed to live up to its sales pitch.  The program
turned out to be biased to promote the policies of one life insurance
company (which 'just happens' to be a company represented by the
producers and distributors of the program).  In fact, competitively
priced policies of a competing company were "deleted" since
August, 1996.  So much for the claim of "unbiased"!  The "lowest
rates" quoted by that term quoter program are often higher than
competitive rates commonly available.  So much for "reduce
premiums by 30%".


Tip: Avoid "pie in the sky" advertising claims
& seek professional advice
[ IE: E-mail DAVE - for HELP!:  dphilips@ican.net ]

Use the services of a responsible, knowledgeable and properly
equipped agent, broker or financial planner.  You will receive
responsible professional service & will often save on insurance costs.

Don't rely on the Regulators to protect you.  As was proven in
1994 (Province of Saskatchewan), the mandate and jurisdiction
of insurance Regulators are narrow and limited.  They have no
jurisdiction over software companies which produce life insurance
software.  Pre-determination of multiple-company term insurance
'survey results' by intentional omission of available information in
and by itself is not sufficient to "substantiate" a complaint.  To
"substantiate" a complaint of this nature, they require proof that a
 (substantial) 'loss' had occurred.


Trap:  Sweeping statements and so called 'advice' by self-
-serving "wanna be experts" such as "Replace your life insurance
every 10 years", "Consider convertible policies only if you are in
bad health", etc. are outright dangerous.   "Always buy term" is
as wrong as "Always buy cash-value policies" and is as wrong
as "Universal life is the universal solution". Sweeping statements
and generalizations like these are a sign of lack of knowledge
or lack of care or both.

Tip:  Avoid falling into these traps. Check out the relevant
professional qualifications of self-appointed "Wanna be Experts";
often they have none!  Consult with a qualified life insurance
professional or financial planner who will review your individual
 needs and make recommendations based on your individual
financial requirements and resources.

Trap: Life insurance market 'surveys' based solely on 'Initial Term
Premium rates'  While 'Initial Term Premium' surveys for automobile
or home insurance rates may be adequate, such 'surveys' for life
insurance are lacking and can be misleading. In contrast to
automobile and home insurance policies which are normally short
term (usually 1 year policies with no guarantee of future renewal
rates or benefits), life insurance contracts are normally purchased
for the long term. Life insurance contracts normally contain
guarantees of renewal rates and future benefits which also need
to be taken into account.

Some life insurance companies may set initial premiums at very
low levels to appear competitive but set renewal rates at an
uncompetitive, high level. A so called 'survey' of policies offered
by different companies but done on the basis of 'initial' premium
only ignores the renewal rates.  It therefore ignores the true
over-time real cost of the policy and may result in thousands
of wasted dollars.

Tip:  Demand a comprehensive survey of policies offered by
different insurance companies which takes into account the
cost and net cost (net of cash values, if any) of the coverage for
the entire time period for which it is expected to be required (and
perhaps also to other points during the coverage-required time
period). If you are considering a policy contract that features
cash values or paid up values, also demand a detailed illustration
showing cash and paid up values for EACH AND EVERY
YEAR OF THE POLICY


Trap:  Altered, or otherwise manipulated 'survey results' Not all
multiple-company life insurance survey and quotation software
is designed with your interest in mind.

There is at least one software package that is designed to
allow its users to artificially suppress the display of policies
and companies which they don't want you to see on the survey.
On screen display on such software may even fail to disclose
that the operator has manipulated the survey to pre-determine
the 'results'. An artificially manipulated survey to pre-determine
the results is not a survey at all. Such manipulated so called
'surveys' may not be to your best interest. If there is nothing
to hide, why hide it?

Tip: Don't count on insurance regulators to protect you from
artificially altered so called life insurance 'surveys'!  Demand
confirmation that the software used to produce the comparison
survey is not one that is designed to allow pre-determination
of survey results by artificial omission of available information.

Why you can't rely on the Regulators to protect you:.  As was
proven in 1994 (Province of Saskatchewan), the mandate and
jurisdiction of insurance Regulators are narrow and limited.
They have no jurisdiction over software companies which
produce life insurance software.  Pre-determination of
multiple-company term insurance 'survey results' by intentional
omission of available information in and by itself is not sufficient
to "substantiate" a complaint.  To "substantiate" a complaint
of this nature, they require proof that a  (substantial)
'loss' had occurred.


     Trap: Artificial, overly optimistic projections of
     values for dividends on 'participating' policies

This trap is similar to the trap set by artificial elimination of
policies or companies from a computerized 'survey' without your
knowledge. The trap is set to make you believe that dividend
results will be higher than the  average long-term performance.
 Due to the power of compounding, this trap could cost you
thousands of dollars.

Tip: If the survey involves illustrations of 'participating' policies
(policies offering 'dividends'), please remember that 'dividends'
are projections and not guarantees of future results or performance.

Demand a written disclosure of long-term past performance and
of present performance. Also demand a full disclosure of the
projections and projection rates used on the illustration.


Trap: "Premium Offset" illustrations which promise a
"quick-pay"  arrangement where the policy will be "paid-up"
early using "policy dividends".

          Tip: Remember, life insurance policy
          'dividends' are usually NOT GUARANTEED!!!

Unless the company is prepared to provide you with a written
guarantee of a minimum level of dividends, it is best to make
very conservative assumptions of very low dividends or no
dividends at all.


     Trap: Artificial, overly optimistic projections and
     assumptions of fund growth in 'Universal life" policies

This trap is vicious and can lead to significant, unplanned,
additional costs. Due to the highly complex nature of many
'Universal Life' policies, these policy contracts can be quite
difficult to understand! The complexity of 'Universal life'
policy contracts often requires complex calculations which
could be beyond the ability of the average person.

Tip: Be very careful when considering a 'Universal life'
policy  and demand full disclosure of the terms and
conditions  of the policy contract.

Also demand full disclosure about the cost of insurance element
(Is it level? Is it Increasing? Is the cost of insurance guaranteed 
or adjustable?) Also demand full disclosure of the fund growth 
assumptions and of all surrender and other charges. ('Surrender' 
charges can be as high as 100% of your accumulated 'fund value'
during the early years of the policy and may be applied 
(normally on a sliding scale basis) against your 'fund value' for as 
long as 15 years into the policy term.)

In addition to the illustrations which you will be presented with, 
make sure that you carefully examine illustrations that are based 
on the minimum guaranteed fund returns in conjunction with 
the maximum guaranteed costs and charges.

Beware of the promise of "flexibility". "Flexibility" often comes 
together with the reality of "Complexity" and "uncertainty".



Trap: Purchasing a life insurance policy as an RRSP or 
tax shelter without comprehensive tax and financial planning.

This trap, while possibly a short-term gain, 
may  turn into a costly, long-term pain.

Tip: Never purchase a life insurance policy as an RRSP or as 
a tax shelter without extensive consultations with qualified 
life insurance, financial and tax planning professionals.

Always seek professional advice if you are considering registering
 a life insurance policy as an RRSP or using a life insurance policy 
as a 'tax shelter'. There are many potential pitfalls, especially with
registering a life insurance policy as an RRSP and there are 
often much better alternatives available. A good strategy to reduce
the chance of hasty and costly mistakes is to avoid registering 
a life insurance policy as an RRSP during the annual RRSP 
"Hype-Season" (During the months of January and February).



Trap:  Shiny glossy sales brochures, 'get rich quick' schemes, 
slick 'retire early' commercials etc.

Tip: Remember the 'golden rule': 
"If  it sounds too good to be true then it likely isn't true".

Anyone with a few dollars or the ability to borrow a few 
dollars can have shiny, glossy brochures printed. Don't
be blinded by the shine!. 'Get rich quick' schemes and 
slick 'early retirement' commercials are best to ignore.
Sound financial planning requires careful consideration 
of needs, resources and alternatives. Impulsive financial
decisions, regardless of how motivated, are the antithesis 
to sound and effective financial planning. Seek the advise 
and service of qualified life insurance and financial planning 
professionals and ignore fancy sales brochures, get-rich-quick 
schemes and slick 'retire early' commercials.


Additional Tips and General Information
============================
1. There are significant cost differences among life insurance 
companies for the same type and amount of coverage. No one 
company is either always best or always worst. It is always wise to
check the offerings of various life insurance companies.

To 'check out the market', you can interview a large 
number of agents, each showing you their company's
proposal. Two significant difficulties with this method are:
a. Who is prepared to endure dozens of hours of sales talk?
b. You need to have extensive knowledge of life insurance 
or you may end up 'comparing apples and oranges'.

Many agents, brokers and financial planners use or have access 
to computerized surveys by professional consumer oriented 
software  such as <Co. Ad>(R) which survey a large number of 
insurance policies offered by various insurance companies. 
The <Co. Ad> software is not designed to allow the user to
suppress information from appearing on surveys. If your agent 
is not using <Co. Ad>, you have to be very careful that the
computerized survey or quotation software used by your agent 
is not one that allows the agent to artificially pre-determine 
the results by suppressing policies or companies.  
          Demand confirmation!

2. The size of an insurance company is not an assurance of 
long term financial strength of longevity.

The demise of Confederation Life, one of 
Canada's largest  and oldest companies is a good
example. Actually, two of the total of  three Canadian companies 
which failed since 1990, Confederation Life and Sovereign Life,
were among the 20 largest Canadian life insurance companies in 
1985. Of the over 100 smaller companies, only one has failed. 
\It is therefore quite obvious that size is no indication of financial 
strength or stability. The only difference is that big companies make 
a bigger splash when they fall. 

3. When you purchase a life insurance policy:
     At time of application: Read the application very carefully and 
make sure that you fully understand each and every question and 
each and every response made. 
          Make sure that each and every question has been answered 
correctly and fully Don't accept "this can be completed later" If the new 
application is intended to replace an existing insurance contract, make 
sure that this is noted on the application and make sure that you 
receive a fully completed comparison disclosure form before completing 
the new application. Stating that the new application will cancel an 
existing contract does not mean that you are obligated to cancel the
existing contract, nor does it cancel the existing contract. In fact, even 
if you are sure that you want to cancel the existing contract, you 
should NEVER cancel it before the new, replacing contract, is received
and  is fully satisfactory. (See above notes about the Traps in replacement)
          It is preferable to pay for life insurance premiums by cheque or 
money order always made payable to the insurance company. Avoid 
paying by cash. Retain with you all sales material, illustrations, 
computer print-outs, etc. which were used in presenting the policy. You 
will need these for comparison with the policy contract itself.

     When you receive the policy contract: Note carefully the date on 
which you receive your new policy. If the policy is unsatisfactory, you
          normally have 10 days from the date on which you receive it to
 return it for a full refund. Check the policy document very 
carefully and immediately upon receipt to at least:
               Make sure that it is complete, that a copy of your 
original application is included and that no pages are missing.
     That the stipulated premiums are those to which you agreed 
     That the benefits are those for which you applied and that 
there are no exclusions of which you were previously unaware.
               If the policy features cash values or paid up values, check 
to make sure that these are the same as were illustrated.
               That any additional guarantees which were on the sales 
illustration are not missing from the policy contract.
          Read the policy document thoroughly. It is a legal contract. 
Make certain that you understand the terms, conditions, limitations 
and exclusions. Ask questions and make enquiries regarding anything 
that you are not sure of or cannot understand in the contract.
          Don't accept delays in receiving satisfactory answers to
 any questions that you have. Remember, you only have 10 days.

If you choose not to accept the new policy:
     Make sure that by returning it you don't leave yourself 
without necessary coverage Make sure that you either have the 
agent pick it up and provide you with a current dated receipt or that
     you forward the policy to the insurance company thorough other 
means which provide you with proof of return of the policy and 
of the date on which it was returned.

If you choose to accept the new policy:
     Arrange with your agent, broker or financial planner to review 
the policy and your financial plan periodically.
     Keep the policy contract in a safe, but accessible place (don't 
keep life insurance policies in bank safety deposit boxes).
     Advise your family or estate executor of the location of 
the policy contract.


-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
An excellent Consumer Protection Article from the Internet

       SOURCE:   http://www.compuoffice.com/litts.html

This will make you an Expert & Really Mess-Up a Life
Insurance Salesman that has his OWN best interests at
heart, and not Your own!

     "DAVE -" can be reached,
     directly on the Internet  - at: dphilips@ican.net

NB:  THIS is probably the most cynical approach, however,
that I have ever seen, and is almost a blatant advertisement
for a specific Life Insurance software comparison package,
while knocking another companies software in a subtle manner.

However: There are Superb Consumer Tips & Info. here.
-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=
