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

125

 

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.

130

 

Prescription Drugs

131

 

Canadian Health Care Funding

131

 

     Paramedicals

134

 

Canadian Worker Evaluations of Employer-Sponsored Plans

137

 

Nothing is Free

137

 

Adequate Health Care is a Global Issue

142

 

     Inverse Care; Impoverishing Care

142

 

     Fragmented and Fragmenting Care; Unsafe Care; Misdirected Care

143

 

Universal Health Care

143

 

Primary Health Care

144

 

Secondary Health Care; Tertiary Health Care

145

 

Critical Illness Insurance

146

 

Characteristics of Critical Illness Insurance

147

 

Considering Critical Illness Insurance

148

 

Achieving Quality Health Care

148

 

Exclusions in Canadian Coverage

149

 

Canadian and U.S. Long-Term Care Services

150

 

Long-Term Care in Canada

151

 

Accessibility; Intergenerational Fairness; Quality Services; Sustainability

154

 

Long-Term Care in the U.S.

156

 

LTC Insurance

157

 

ADL: Activities of Daily Living

160

 

Benefit Qualification

161

 

Policy Terms

161

 

Participants

162

 

Paying LTC Costs Out-of-Pocket

162

 

Citizens Must be Responsible

164

 

Entering Old Age with Dignity

166

 

Long-Term Care Service Capacity

166

 

Frailty; To Recap

168

 

All Ethnic, Religious, and Racial Segments are Affected

168

 

Women and Long-Term Care

169

 

Caregivers; The Spouse

169

 

Children as Caregivers; Paid Caregivers

170

 

Adult Day Care and Adult Day Health Care

170

 

Community-Based Care; Respite Care; Assisted Living Facilities

171

 

Long-Term Care Insurance Premiums in Canada and the U.S.

175

 

Premium Due Dates; Withdrawable Premium Fund; Policy Reinstatement

176

 

Premium Guarantees; Premium Waivers; Return of Premium Upon Death

177

 

Time Limits; Benefit Amounts; Cancelation Guarantees; Policy Incontestability

178

 

Policy Effective Dates

179

 

Dependency Determination Under the Policy

180

 

Policy Exclusions and Limitations

181

 

Inflation Protection; Considering Need

182

Chapter 5: Stranger-Oriented Life Insurance & Insurable Interests

184

 

Defining STOLI in the U.S. and Canada

184

 

Establishing an Insurable Interest

184

 

When Insurable Interests Exist

186

 

Buying with the Intent to Sell

191

 

Sun Life Assurance Company of Canada v. Berck

193

 

Actuarial Life Expectancies Used in the U.S. and Canada

195

 

State and Province Legislation

195

 

Life Settlement Participants

197

 

Analyzing the Life Settlement Need for U.S. and Canadian Citizens

198

 

     Steps 1 through 4

199

 

U.S. & Canadian Policy Transfers and Insurable Interest Requirements

201

 

Recent Regulatory Changes

205

 

A Speculative Contract, Whether in the U.S. or Canada

207

Chapter 6: Life & Viatical Ethics in the U.S. and Canada

210

 

Moral Responsibilities

211

 

Little White Lies

213

 

Ethical Intent

215

 

Ethical Goals

216

 

Promoting Ethical Activity in Canada and the U.S.

217

 

Following U.S. and Canadian Laws

218

 

Ethics in the Workplace

219

 

Some Activities are Always Wrong

219

 

The Same by Any Other Name

220

 

Our U.S. and Canadian Pasts Affect the Future

221

 

U.S. and Canadian Companies Set Guidelines

226

 

Promoting Ethical Behavior

231

 

Egoism

234

 

Is It Possible to Teach Ethical Behavior to Others?

235

 

What is the Scope of Ethics?

235

 

What Does it Take to be a Moral Person?

236

 

U.S. and Canadian Quality of Work

237

 

Creating a Legacy

237

 

Ethics Start at the Top

238

 

Personal Responsibilities to Other Moral People

238

 

Objectivist Ethics

239

 

Keeping our Ethical Codes in the U.S. and Canada

240

 

Mores

243

 

“Fast Buck” Items

246

 

The Professional; Due Diligence

246

 

Last Page

247

 

 

United Insurance Educators, Inc.

8213 – 352nd Street East

Eatonville, WA  98328

(253) 846-1155

 

mail@uiece.com