Business

TaeReview Wednesday, June 6,1990 — A22

Ins and outs of buying life insurance

Ah, life insurance — something
most of us need at some point but
few of us enjoy dealing with.
Reader D.L. is no exception.

“A mind-boggling array of
slightly differing plans is available
which we find quite confusing,”
he said.

“We have met with several
agents and they all sound like they
have excellent products that meet
our exact needs. Our accountant
Said term insurance is usually the
best — and then mentioned he had
a universal life plan.

“We'd appreciate your response.
If you could state your position in
one sentence, that would be
great.”

I can’t manage one sentence, but
here are some guidelines —
whether you are buying insurance
for the first time or reviewing
coverage you already have.

— Why do you need the insur-
ance?

Typically, the survivors will
need to replace lost income when
the wage-earner dies, including
funds for children’s (and perhaps
spouse’s) education. Insurance
proceeds might also be used to pay
off debts (especially the mort-
gage), allow a retiring person to
choose a pension paying the high-
est income or provide funds to
enable business partners to buy
out the interest of a deceased
partner.

— How much coverage do you
need, and for how long?

If other family members will
support the survivors, or if a
spouse works or can return to work
outside the home, you might need
a smaller policy than if family
support is not available or if the
spouse is unable or unwilling to
eam income. Perhaps the spouse
will stay home until the youngest
child is in school.

Do you have group insurance at
work? What income will other

Savings and investments produce?
What about CPP benefits?

How high a priority is insurance,
and so how much can you afford
for insurance premiums?

— Which type of insurance is
best?

Term insurance provides pay-as-
you go coverage, similar to car,
home and possessions insurance.
It is the cheapest insurance when
you first take it out and usually the
best for short-term needs. The cost
Tises as you get ojder

Whole or universal life insur-
ance always costs more than term
insurance during its early years but
the annual premium usually stays
the same. Over a long period, it
could have a lower total cost and
more flexibility than term insur-
ance. Universal life offers certain
tax advantages.

— Help! What’s the best way to
find the right answers?

- Find an expert, unbiased and
understanding agent to help work
out your needs and suggest several
alternative insurance programs,
writing out the pros and cons of
each.

—How do you find a good
agent?

The Canadian Life and Health
Insurance Association has just

‘We have mef wifh several agents
and they all sound like they have
excellent products that meef our
exacf needs. Our accountant said
term insurance is usually the best
— and fhen mentioned he had a
universal life plan’

Yogurt cheese maker honored

Alison Rae Tod, who operates
Miss Muffet’s Yogurt Cheese in
Sidney, was recently named the
associate of the year for 1990 by
the Victoria branch of the Cana-
dian Food Service Executives’
Association. :

Tod and her mother, Marge Tod-
Smith, started Miss Muffet’s
Yogurt Cheese two years ago.
Their products include low-calorie
cheesecake, gourmet coffees and
specialty jam.

In addition to their interest in
promoting skim-milk yogurt
cheese as a low-fat alternative to
cream cheese, mayonnaise and
sour cream, they also believe in
recycling.

At the restaurant association’s
annual dinner, they presented a tie
crocheted from plastic bag strips
to outgoing president Don Mon-
sour.

Monsour had earlier admired a
crocheted clutch purse which
Marge Tod-Smith made for daugh-

ter Alison from recycled plastic
bags.

Tod-Smith noted their yogurt
cheese is now being used to pro-
duce low-calorie treats at Victoria
General hospital.

issued a list of suggested steps.

“Try to find an agent who is a
successful business person in the
community,” says CILHIA. “Ask
relatives, friends and associates for
names. Then choose three agents
for a preliminary interview.”

Ask how long the agent has been
in the life insurance business, the
name of the company the agent
represents and — this is important
— whether the agent can shop
around and deal with other com-
panies as well.

Ask if the agent belongs to the
Life Underwriters Association of
Canada and follows LUAC’s code
of ethics. Ask what ongoing train-
ing the agent has had — the LUAC
training course, the Chartered Life
Underwriter (CLU) designation,
the Chartered Financial Consultant
(CHEC) course.

Ask what other products and
services (if any} the agent sells,
and what service the agent pro-
vides after the sale. Ask for the
names of other clients as refer-
ences — and contact them.

During the meetings, says
CLHIA, be prepared to answer
personal and financial questions.
The agent needs to know the
whole picture to provide appropri-
ate advice.

Ask for several different ways to
meet your insurance needs.
Beware of high-pressure tactics to’
sell a particular plan or package.

Ask questions; don’t nod your
head if something is not clear. It’s
the agent’s responsibility to
explain everything so you do
understand.

You need to know if both the
amount of coverage and the pre-
mium structure are guaranteed for
the life of the policy. Are there any
tax implications — both benefits
and costs?

As part of your research, read
some “how to” insurance books,
including those critical of the
industry. You can easily spend
several thousand dollars on life
insurance over the years, so make
sure you get good value for your
premiums.

Mike Grenby is a Vancouver-
based columnist and independent
personal financial adviser; he
will answer your questions as
space allows in his column —
write to him c/o The Review, Box
2070, Sidney, B.C. V8L 3C5.

Principal group
paymenis low

By last week, the government
had received 17,000 claims or
only two-thirds of the number
expected, under the government’s
settlement offer to British Colum-
bia investors in First Investors
Corporation Ltd: and Associated
Investors of Canada Ltd.

To date, more than 7,000
cheques, totalling $2.5 million,
have been mailed to investors who

lost money when the two compa-
nies folded. The deadline for
claims ran out May 30.

Exploration pending

The May sale of oil and gas
drilling rights swelled government
coffers by $12.4 million, Energy
Minister Jack Davis said last
week.

“Exploration in our province
continues to expand. Revenues to
B.C. from the first five sales this
year are up $25 million over last
year,” Davis said.

CAPITAL CONSULTANTS LTD.

Personal = Corporate
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> FINANCIAL PLANNING PAYS —

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Including RRSP’S, RRIF’S
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384-8844

or 655-4105 Res.

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2442 BEACON AVENUE, SIDNEY, B.C. V8L 1X6

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GARY L. SHILLINGTON & ASSOC.
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Save the Children
Fund of
British
Columbia
SALE istEVER
CHRISTMAS CARD
VARIETY PACK
15 for °47
available June 1, 1990

PCA Thrift Shop
3rd Street, Sidney

For information call 656-4420

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