Being in the market for life insurance can be a very daunting prospect, particularly for someone who has been denied coverage in the past. There are many reasons that a life insurance company can deny a claim; age, illness, or significant familial or medical history can be some of the more common reasons for rejection, but applicants can also be denied coverage because of their occupation or their choice of hobbies. In recent years, insurance companies have come to realize that their underwriting standards are built to exclude thousands of people from finding the right life insurance product. Several life insurance companies have used this knowledge to create new products, like guaranteed issue life insurance products, to help fill these gaps in the marketplace.
Enter CIBC Life Insurance
Guaranteed issue life insurance has changed the face of the life insurance by allowing higher-risk groups the advantage of qualifying for life insurance without having to answer ANY medical or lifestyle questions. The market for this type of life insurance policy is becoming more competitive everyday. Companies like CIBC, one of Canada’s Big 6 banks, has now expanded its life insurance portfolio to include the guaranteed issue life insurance market. This is great news for applicants. More product options offered by established companies will help to provide more competitive prices with a variety of different benefit levels
So How Does CIBC Compare?
CIBC’s Guaranteed Acceptance plan seemed to lack the same benefits offered by two of its major competitor’s most popular simplified life insurance plans. However, it is important to mention that simplified issue life insurance differs from a guaranteed issue plan in one very important way. Although there is no medical exam required for a simplified issue plan, applicants are still required to answer between three and 20 question regarding their health and lifestyle. By asking these questions, insurance companies have the opportunity to assess each applicant, tailor the policy, alter the premium or even deny the coverage based on the applicant’s answers. A guaranteed issue plan, such as the one offered by CIBC, has no medical exam and no medical or lifestyle questions – coverage cannot be denied.
Here’s how they compare:
CIBC Insurance – Guaranteed Acceptance Plan
- Applicants must be between the ages of 40 and 74.
- Premiums remain level. At age 95 the premium cease but the coverage remains.
- Coverage options range from $10,000, $15,000, $20,000 or $25,000 only.
- Coverage remains level for life of policy.
- No option to increase coverage amount of existing policy.
- Coverage starts immediately.
- No medical exam, tests or questions of any kind.
- $25,000 Cost for male, non-smoker, age 60: $143.75 per month
- $25,000 Cost for female, non-smoker, age 60: $110.50 per month
Assumption Life – Golden Protection or Golden Protection Plus
- Applicants must be between the ages of 40 and 85. (40 and 80 for the Plus plan.)
- Premiums remain level for life of policy.
- Coverage options range from $1,000 and $50,000. ($1,000 and $30,000 for Plus plan.)
- Coverage remains level for life of policy.
- The Plus plan offers 3% increase in coverage each year with no increase premium.
- Coverage starts immediately.
- No medical tests, but there are 10 health questions that must be answered.
- $25,000 Cost for male, non-smoker, age 60: $102.22 per month.
- $25,000 Cost for female, non-smoker, age 60: $82.49 per month.
Canada Protection Plan – Simplified Life Plus
- Applicants must be between the ages of 25 and 80.
- Premiums remain level for life of policy.
- Coverage options range from $1,000 to $100,000.
- Coverage remains level for life of policy.
- Coverage starts immediately.
- No medical test, but there are some challenging health questions.
- $25,000 Cost for male, non-smoker, age 60: $100.19 per month.
- $25,000 Cost for female, non-smoker, age 60: $81.16 per month.
To learn more,contact us at nomedicallifeinsurance.ca or call 1-866-899-4849 to talk with one of our life insurance professionals.
NoMedicalLifeInsurance.ca is an initiative of independent insurance expert Tamara Humphries and LSM Insurance.
Good comparison. One question: when X amount of premium is quoted in the article what is the amount of the death benefit?
Good point Casey. It’s based on $25,000 of coverage we just updated the article
This post is relating to an article on an Insurance Horror Story https://lsminsurance.ca/life-insurance-canada/2014/01/insurance-suicide-clause in which a bank denied a mortgage insurance claim because of a suicide. Some points are tied in related to this article.
Harley, I’ve often asked the same question as you did: “Where are the regulators in protecting the public?”. This question relates not only to allegedly “flawed products” but overall. In the context of this thread, it was not the “product” that was “flawed” but disclosure that (reportedly) was non existent – and likewise advice to the best interests of the clients that (reportedly) was also non existent. Even if all bank clerks acting as sellers of “mortgage” or “creditor” group insurance certificates were forced to become members of Advocis, that would not bear on the banks to disclose the wording of the master policy contracts to which consumers are subject under those “mortgage” and “creditor” insurance certificates are subject to the buyers.
As Daniel correctly stated in a posting relating to this reported case and subject, the 2-year suicide exclusion clause is included in all known life insurance policies; however, that doesn’t mean that the general public knows that fact. Full disclosure of contract wordings by an offeror to an offeree is something that one would expect as a matter of fair dealing. Yet, for whatever reason, life insurance contracts are all too often undisclosed to the buyer until after the consumer has signed onto the contract. IMO, that is unfair to consumers and does not constitute acting in the best interest of the buyer but the converse. Some may argue that even if the contracts are disclosed to consumers, these would not always be read or understood; however, this is a rather poor argument in favour of hiding material information from consumers.
In a separate thread, CIBC’s “guaranteed issue” product is discussed and compared with two of 16 competitors in the “simplified issue” and “guaranteed issue” arena. It is noteworthy that while the other 16 offerors of such products, CIBC is the only one that does not provide disclosure of either the rates or the policy contract wordings. In the micro-text at the bottom of their web page, text that requires excellent vision and clicking on a link to expand the page, the bank states: “You will receive a copy of your Insurance Policy once you have applied.” My simple question is why not disclose the contract to the offerees (consumers) before they sign on? Is it fair to consumers to have life insurance policies sold like pot luck dinners? …”first you buy and then we’ll tell you what you bought”? Is this acting in the best interest of the buyer??? In today’s electronic age, there is no reason or added cost for the offeror that I can see for not scanning that “well guarded secret” into a PDF and making it available to prospective buyers. Same goes for the premium rates and the same also goes for the text of those master policies to which group “mortgage” and “creditor” certificates are subject to.
…and this brings back the question asked by Harley and I: “Where are the regulators in protecting the public?”.
Good article and worth reading. LifeGuide includes a special module dedicated to “simplified” and “guaranteed” issue life insurance products. 16 of the 30+ carriers included in LifeGuide offer either or both “simplified” and/or “guaranteed issue” products. Such products are available either as immediate insurance or “graded” insurance. The CIBC offering (per their website) is “guaranteed” and “graded” (No questions asked but only ROP on death during the first 2 policy years and insurance coverage from the 3rd policy year onwards)
For the specific cases mentioned in the article, “simplified issue” products are compared to CIBC’s “guaranteed issue” and “immediate insurance coverage” products are compared to CIBC’s “graded” structure. Regardless, I believe that consumers have a right to independent objective advice and comparison of offerings – including cost and contractual wording. While the other carriers provide disclosure of both, I could not find any disclosure by the CIBC of either their rates or their specimen contract wordings. The BIG question is “why”?
…ooops, time for an eye examination 🙂 the micro-text at the bottom of the page at https://www.cibcinsurance.com/life-insurance/guaranteed-acceptance.html that is visible in full if you click on “Read more” states: ” You will receive a copy of your Insurance Policy once you have applied.” I wonder how many lawyers would advise their clients to sign up for a contract of which the wording could only be read after signing up.
Thanks Ami. Some very good observations.
It should be noted that the best time to apply for Assumption, CPP or the other Simplified Issue plans is before you have been declined. Once you’re declined your options are limited you are putting yourself behind the eight ball so to speak
You make a good point John. The agent / broker can also submit a preliminary inquiry with most carriers to see if the insured is likely to be declined. It should be noted that the insurance company response is not a binding offer but gives more of a ballpark of the likely result.
Can I get the CIBC plan if I already have the RBC Guaranteed Issue plan
Hi Lloyd, Yes you can purchase more than one Guaranteed Issue policy. Depending on your health history it may be worthwhile investigating a traditional life insurance or Simplified Issue life insurance policy.