Life, Viaticals & Health Insurance

Table of Contents

Chapter 1: Understanding Life and Viaticals in Canada and the U.S.		1
	U.S. Exception	2
	Transparency in Sales Required in Both U.S. and Canada	2
	Life & Viatical Settlements in U.S., Then Canada	4
	Canadian Taxation of Life and Viatical Settlements	4
	Changes in U.S. Tax Law	6
	Canadian Life Insurance Exemption	7
	Canada’s Adjusted Cost Basis for Life Insurance Policies	7
	Buying Life Insurance Policies	8
	How Life and Viatical Settlements Function in Canada & U.S.	9
	Purchasing Partial Policies	10
	The Difference Between a Broker and Provider	10
	Viatical Participant Confidentiality in the U.S. and Canada	10
	Payment & Buyer’s Remorse	11
	When Death Occurs Soon After Selling a Life Contract	11
	Keeping Tabs on the Insured Person, Whether in the U.S. or Canada	12
	Checking Health Status through Physicians	12
	Extra Policy Benefits	13
	Other Available Options (Besides Selling the Policy)	13
	What Every Canadian and American Should be Aware of	13
	Canadian Life & Viatical History in the Secondary Markets	14
	Ontario Introduced Life Settlement Bill 162	16
	Ontario, Canada Bill 162	16
	Consumer Protections Desired in Both Canada and the U.S.	18
	Medical Underwriting	19
	Analyzing the Life Insurance Contract	19
	Expected Life Spans Differentiate Viatical and Life Settlements	20
	Policy Ownership Transfer	21
	Policy Premium Payments	21
	Outstanding Policy Loans	24
	Additional Investment Fees	24
	Escrow Trust Accounts	25
	Life & Viatical Settlement Disclosures in the U.S. and Canada	26
Chapter 2: Life & Viatical Settlements Turns Life Insurance into an Asset		29
	Life and Viatical Settlement Participants	30
	The Life and Viatical Contract	31
	Contract Standardization in the U.S. and Canada	32
	Viatical Settlement Terminology is Basically the Same in U.S. & Canada	34
	Policy Ownership	35
	Securities	40
	It Is Important to Remember the Following in Both the U.S. and Canada	43
	Accelerated Benefits May Offer Better Returns for the Insured	43
	Secondary Markets in Canada	46
	Caution	47
	Life Insurance Tax Treatment in Canada	48
	The Role of Life Insurance in Canada	52
	Changes effective as of 2017	53
	Application Clean Sheeting	54
	Contestability Period	55
	Insured’s Life Expectancy	55
	Cases of Fraud in the United States	56
	Legislating the Industry in the U.S. and Canada	56
	Actuarial Tables Used by Both U.S. and Canadian Companies	58
	Investor Risks	59
	Maturity Risk	62
	Clinical, Statistical, Multi-Disciplinary	63
	Minimizing Investment Risk Through Knowledge; Canadians Playing Catch-up	64
	Getting the True Facts Prior to Evaluation	65
	Viator Tracking	66
	Life Insurance Contracts in Canada and the U.S.	67
	Basic Concepts	67
	Insurance Companies Measure Risk	68
	Types of Life Insurance	69
	What Will the Insurance Cost?	70
	Term Insurance	71
	Permanent Insurance	75
	Universal Life Insurance Policies	78
	Universal Life Policies Compared to Traditional Plans	79
	Premiums; Policy Options	82
	Nonforfeiture Options; Dividend Options	83
	Settlement Options	84
	Canadian and U.S. Mandated Provisions	85
	Incontestability Clauses	86
	Misstatements in the Application	87
	Deferment Clause; Nonforfeiture	87
	Loan Values; Grace Periods and Reinstatement	88
	Allowed Policy Provisions	89
	Suicide; Aviation	89
	War	90
	General Provisions	90
	Deduction of Indebtedness and Premium Refund	90
	Change of Beneficiary	91
	Assignment	91
	Beneficiary Designations	91
	Policy Payments	93
	Cash Values; Dividends	94
	Proceeds	95
	Special Clauses	95
Chapter 3: Viatical Benefits in Canada and the U.S.		98
	Secondary Life Insurance Contract Markets in the U.S. and Canada	98
	The Viatical Industry	99
	Tax Issues	99
	Viators with Less than a Two-Year Life Expectancy	100
	Two to Five Year Life Expectancy Estimate	101
	Life and Viatical Settlements in the U.S. and Canada	102
	Client Qualifications	103
	Requirements 1, 2, and 3	104
	Illness Creates a Need for Cash	104
	Canada Joins the Secondary Market	106
	Canadian Insurance Law	107
Chapter 4: Health Insurance in Canada and the U.S.		111
	Canada’s Health Care Program	111
	Misconception Regarding Canadian Availability of Medical Personnel	111
	Opioid Crisis in Both Canada and the U.S.	117
	Canadian Funding	124
	Provinces and Territories Handle Health Insurance	125
	Buying Private Health Insurance as Canadian Supplemental Coverage	126
	Canada’s Public Health Care Providers	126
	Canadian Private Clinics	127
	Canadian Courts Conclusions: IX. Conclusion and Orders	128
	New Health Care Opportunities in Canada and the U.S.	131
	Prescription Drugs	132
	Canadian Health Care Funding	133
	Canadian Worker Evaluations of Employer-Sponsored Plans	138
	Again, Nothing is Free	139
	Adequate Health Care is a Global Issue	144
	Inverse Care; Impoverishing Care	144
	Fragmented and Fragmenting Care; Unsafe Care; Misdirected Care	145
	Universal Health Care	145
	Primary Health Care	146
	Secondary Health Care; Tertiary Health Care	147
	Critical Illness Insurance	150
	Characteristics of Critical Illness Insurance	151
	Considering Critical Illness Insurance	151
	Achieving Quality Health Care	153
	Exclusions in Canadian Coverage	156
	Canadian and U.S. Long-Term Care Services	157
	Long-Term Care in Canada	160
	Fixing Long-Term Care Act, 2021	160
	Visitor Policy	163
	Continuous Quality Improvement	163
	Air Conditioning	164
	Palliative Care Philosophy	164
	Infection Prevention & Control	165
	Calculating Direct Care Targets	165
	Medical Directors	165
	Staffing	165
	Medical Accessibility	166
	Intergenerational Fairness; Quality Services	166
	Sustainability	166
	Long-Term Care in the U.S.	167
	LTC Insurance	168
	ADL: Activities of Daily Living	172
	Benefit Qualification	173
	Policy Terms	173
	Paying LTC Costs Out-of-Pocket	173
	A Citizen’s Responsibility When Aging	175
	Entering Old Age with Dignity	177
	Long-Term Care Service Capacity	178
	Frailty	180
	All Ethnic, Religious, and Racial Segments are Affected	181
	Women and Long-Term Care	181
	Caregivers; The Spouse	182
	Children as Caregivers	182
	Paid Caregivers	183
	Adult Day Care and Adult Day Health Care	183
	Community-Based Care; Respite Care	183
	Assisted Living Facilities	184
	Long-Term Care Insurance Premiums in Canada and the U.S.	187
	Premium Due Dates; Withdrawable Premium Fund	188
	Policy Reinstatement; Premium Guarantees	189
	Premium Waivers; Return of Premium Upon Death	189
	Time Limits; Benefit Amounts; Cancelation Guarantees	190
	Policy Incontestability; Policy Effective Dates	191
	Dependency Determination Under the Policy	192
	Policy Exclusions and Limitations	193
	Inflation Protection	194
	Considering Need	194
Chapter 5: Stranger-Oriented Life Insurance & Insurable Interests		196
	Defining STOLI in the U.S. and Canada	196
	Establishing an Insurable Interest	196
	When Insurable Interests Exist	198
	Buying with the Intent to Sell	203
	Sun Life Assurance Company of Canada v. Berck	205
	Actuarial Life Expectancies Used in the U.S. and Canada	207
	State and Province Legislation	207
	Life Settlement Participants	209
	Analyzing the Life Settlement Need for U.S. and Canadian Citizens	210
	Steps 1 through 3	211
	Step 4	212
	U.S. & Canadian Policy Transfers and Insurable Interest Requirements	213
	Recent Regulatory Changes	217
	A Speculative Contract, Whether in the U.S. or Canada	219
Chapter 6: Life & Viatical Ethics in the U.S. and Canada		222
	Moral Responsibilities	223
	Little White Lies	225
	Ethical Intent	227
	Ethical Goals	228
	Promoting Ethical Activity in Canada and the U.S.	229
	Following U.S. and Canadian Laws	230
	Ethics in the Workplace	230
	Some Activities are Always Wrong	231
	The Same by Any Other Name	232
	Our U.S. and Canadian Pasts Affect the Future	233
	U.S. and Canadian Companies Set Guidelines	237
	Example	243
	Promoting Ethical Behavior	243
	Egoism	246
	Is It Possible to Teach Ethical Behavior to Others?	247
	What is the Scope of Ethics?	247
	What Does it Take to be a Moral Person?	248
	U.S. and Canadian Quality of Work	248
	Creating a Legacy	249
	Ethics Start at the Top	249
	Personal Responsibilities to Other Moral People	249
	Objectivist Ethics	251
	Example	252
	Keeping our Ethical Codes in the U.S. and Canada	252
	Mores	255
	“Fast Buck” Items	257
	The Professional	257
	Due Diligence	258

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