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Insurance in Canada



Insurance matter in Canada on the volume of the capital involved in it is on the second place after the banking. It is difficult to specify, what sphere of human activities here does without insurance. The range of services of insurance companies includes life insurance and health insurances, insurance of disability, immovable (housing) and a various personal estate (from cars to jewelry), insurance of businesses and banking loans, and also pension plans and investment projects. Such broad insurance of all possible misfortunes or the complications connected to human life and its activities, is an essential component of the system providing the high level of social security of the person in Canada. Here it is considered that any person understanding the responsibility before by itself, the family, the partners in business and before society, is obliged to insure himself, the property and the actions in order that in case of origin of any problems partners and other members of society suffered from them he, its native probably less.

In Canada some hundred companies, from the most known from very respectable family tree are engaged in insurance (them treat "Canada life" by which it is executed uzhe150 years, "Transamerica", "NN Financial", "Equitable Life" and others), to just arisen young companies. The majority of the companies have a certain specialization. On a range and conditions of the offered company services, engaged in the same business, are rather close each other. The new companies for customer acquisition sometimes are kept by a little lower prices, than veterans, or offer more zavlekatelny insurance programs, but differ a smaller level of reliability or stability. Therefore in case of a choice of the company it is better to be guided by the reputation of this or that company checked by time.

LIFE INSURANCE
There are two main types of life insurance.
The first and most idle time is called as "TERM". In essence, it is irrevocable payments for an insurance on a case the death paid monthly. The amount of payments depends on value of an insurance and age insured. Within 10 years from the moment of the insurance beginning value of payment same, then each next decade payment increases by a certain amount.

In case of achievement by the person of 75 years this insurance automatically stops. If the person to this age didn't die, all money paid to them irrevocably carries over insurance company. Respectively, if the person died before achievement of this age, the insurance premium in the assigned volume is paid to his successors. In case of extinctions monthly payments of this insurance automatically also are terminated. This type of insurance is in demand because of its relative low cost. For example, if the insured sum makes 100 000 dollars, for the non-smoking man aged from 25 till 35 years payment makes from 12 dollars a month, aged from 35 till 45 years - from 12, aged from 45 till 55 years - from 25, aged from 55 till 65 years - from 50, aged from 65 till 75 years - from 100 dollars a month. In case of increase in an insurance premium value of payment, but to a lesser extent increases also. For example, doubling of an insurance premium will increase payment only by 1,5 times twice, trebling of an award will increase it only twice, etc. The amount of payment depends also on a sex of the person (men pay more women), state of his health, on that, he smokes or not, etc. But origin of any disease after the beginning of insurance doesn't influence any more insurance conditions. However if the person wants to be insured thus after detection at him a serious disease, the insurance company most likely will refuse to it it. Also, if in case of design of an insurance of people I knew about existence at it a serious illness, but I hid it, it can be the base for recognition afterwards an insurance invalid.

This type of an insurance is used generally when the person wants to guarantee the family against financial problems arising in case of sudden loss of the supporter (for example, connected to payment моргиджа or payment of education of children), or it is simple for maintenance of a certain standard of living of a family until children don't become independent.

There are some types of such insurance.

The second type of an insurance is called as "WHOLE LIFE" (accumulative). Its essence consists that money paid by the person arrives into the account its policy, there collect, and in case of death of the person are given to successors together with percent (on the average it is 6-8% per annum) and the insured sum. Feature of this type of insurance is that value of monthly payment is defined once in case of the contract inference, depending on the amount of an insurance and age of the person, and afterwards doesn't change any more. Besides, in case of this insurance after 10 years of payment of people can as continue to make payments (for growth of accumulation), and or to interrupt them on any period, or generally to stop them. Anyway it already remains insured for life. In case of achievement of 65 years of people can voluntarily or take away all accumulated amount, or at the expense of it to receive additional pension. Concerning this pension two options are possible. In the first option of pension period of its receiving, for example accurately makes a reservation 10 years. During this period certain payments are paid to the person, and after the termination of this period payments stop. If the person dies before the end of payments, his successors will receive residual of money. In the second option the pension is granted for life. In this case the general payments can appear both less, and it is more, than in the first option. For example, if the person dies in a month after the inference of such contract, he and will receive only payments only in one month, and its remaining money will be taken away to itself by insurance company. But if the person, we suppose, instead of average 10 years will live 25 more, the insurance company will pay to him all this period. After death of the person his successors can or receive directly the remained insured sum, or continue to receive pension.

This type of an insurance, certainly, is economically more favorable, than previous as the insurance premiums entered by the person not only don't disappear, but in case of payment of an insurance return with rather big (8 - 10 annual) percent. But in case of this insurance, in comparison with previous, in case of the identical insured sums monthly payments much higher aged till 55 years. For example in case of an insurance for 100.000 dollars the man in already enough risk interval from 45 to 55 years shall enter a minimum in "Equitable life" companies on 70 dollars monthly instead of 20 on the previous insurance. For the people sitting on the manual (1000 dollars a month on a family from two people) to it already enough decent amount, to pay which it is already difficult. That is rather wealthy people use this type of an insurance generally. But in case of age over 55 years payments on this insurance appear much less, than on previous.

In certain cases use combined (TERM and WHOLE LIFE) an insurance, depending on wishes and opportunities of the person.  Each of these two types of an insurance is paid even in case of suicide of the insured person but only if it will occur not earlier than in two years after the insurance beginning.

INSURANCE UPON SERIOUS DISEASES
In this case the person can be insured not only on a death case, but also from a disease of a row of diseases menacing to life, such as a heart attack, a stroke, a cancer, kidney insufficiency, paralysis, multiple sclerosis, a blindness and deafness. If the person fell ill with such illness, but remained is live, in 30 days after diagnosis installation about the disease beginning he will receive the insured sum, from 50.000 to 1.000.000 dollars. But in case of death from this illness his successors receive only the entered insurance premiums.

INSURANCE UPON DISABILITY
This insurance allows the person to gain in case of disability certain income during in advance stipulated period. Value of payments on this insurance depends on the insured sum, period of payment of an insurance and on a profession of the being insured. Interesting feature of this type of insurance is that for some professions, for example for lawyers, announcement can form for receiving an insurance, for example, about temporal loosening of memory the base, it is almost impossible what to check.

PENSION PLANS
All permanent residents of Canada have the right to pension. In Canada there are three main types of pensions. It:
- The state pension paid to the person in case of achievement by him of 65 years. The size of this pension depends on period of living of the person in Canada and makes now 460 dollars a month for 40 and more years which have lived in Canada. For lived in Canada smaller period this pension decreases in proportion to living time.
- Pension due to pension assignments in the amount of 5,4% of earnings. Value of this pension depends on periods and absolute value of assignments. At the person working on hiring, assignments become automatically, and a half of assignments the worker, and a half the employer pays. The person, operating on himself, can do or not do these assignments voluntarily. But if the person doesn't work, he can't expect this type of pension.
century. Pension from the special pension funds named with RRSP.
Pensions from these funds are one of the most popular financial programs in Canada.
Reasons here a little. First, in most cases only this type of pension gives the chance to pensioners not only to provide itself in old age with a necessary subsistence, but also allows the considerable part of the Canadian pensioners to hold the standard of living at very decent height. The most part of clients of the Canadian travel agencies executing rounds both to Europe, and on the resorts of Florida or the Caribbean Sea, the pensioners traveling at the expense of these funds make. The concept about efficiency of such fund gives the following example. It is considered that if the person in 21 years will enter in this fund only 2500 dollars and more won't begin to do any contributions, even in this case in case of average value arrived to the invested capital to 15% per annum (it equivalently to capital doubling every 5 years), by 65 years he becomes a millionaire.
Secondly that is very important in the conditions of Canada where payment enough heavy taxes is mandatory for all operating, contributions to this fund are read by the expenditures which are written off from the taxation. Thus rather most part of money enclosed in a pension fund, is received for the score of reduction of the taxation. Value of attachments in this fund can make from at least 50 dollars a month to at most 18 percent of the income operating (but not более13.500 dollars a year). In the third, the percent paid on money invested in these funds, are much higher banking and reach to 25% per annum. It is considered that in these funds value of the amount enclosed in them doubles on the average each seven years. But value of a gain of a contribution depends on the general situation with economy in the country and isn't guaranteed, that is it can be both the positive, and the negative. But pension funds in some large organizations, are insured, and in case of any turn of events will receive at least 75% of the money invested in this fund, and 100% in case of death.

The pension fund can start using in case of achievement of a retirement age. In principle, the person can take money from fund and earlier, but in this case the penalty will follow - earlier unpaid taxes on this money will force to pay it. The person can take away as all accumulated amount directly, and to demand payment of estimated monthly pension to him. If at the moment of death of the person it in this fund has any amount of money, they will be received by his successors. To start involvement in this fund of people shall be the permanent resident of Canada and work in it at least one year.
Payments in this fund can interrupt and be resumed at the request of the person. The difference in this case will be only in sizes of the amount which has been accumulated by its fund.

INSURANCE OF THE CREDITS
The person taking in bank the credit for a large sum, for example for house purchase, shall be without fail insured from that won't be able to return the credit in case of the death. This insurance can be made both in the bank, and in insurance company. The difference here will be following. The banking insurance in case of death of the person who has taken the credit repays the debt which has remained behind it, and the property acquired on credit remains in possession of his successors. But if by the time of death of the person the main part of the credit, for example 250.000 dollars from the credit of 300.000 dollars, was already extinguished, successors anyway won't receive money, and only residual of the credit of 50.000 dollars will be extinguished by a banking insurance. If the insurance becomes insurance company, all amount of the credit, in the case under consideration equal 300.000 dollars will be paid to successors. and successors will be able not only to be calculated for the house, but they still will have a sufficient amount of money. Insurance in insurance company in this case is safer, more favorable and is initial cheaper.

INSURANCE OF BUSINESSES
Some options have this appearance of an insurance.
In one case partners in business insure each other. In case of death of one of partners his successors have the right to claim invested by it in business for money. In this case other partner at the expense of an insurance pays damages and continues business.
In other case business can be insured from the losses connected to disability of the owner. If on an etiology, injuries, etc. the master of business can't control it, the insurance company will pay all expenditures on business maintenance during the insurance period.

HEALTH INSURANCE
All medical care in Canada both to her permanent residents, and persons with the status of the refugee appears free of charge. The exception is made by only the stomatologic help which belongs to area of a private initiative. But for arrived to Canada on a constant residence it is the rule becomes effective only in three months after arrival. All people who are temporarily in Canada have no medical covering also. In this case though not necessarily, but it is very desirable to acquire the health insurance on a case. Treatment cost in Canada is high, day of stay in hospital can cost more than one thousand dollars, and some operations to cost more than ten thousand dollars. Therefore to the people who don't have a medical covering, it is desirable to have the health insurance. It costs from 1,30 dollars a day in case of an insurance in 5.000 dollars, 5 dollars a day in case of an insurance in 100.000 dollars, etc. (21st Centure Travel Insurance company quotations).
It is necessary to consider that the medical covering and the Canadian health insurances act only on the territory of Canada. Therefore in case of trip abroad it is desirable to have tourist health insurances. They cost 0.85 dollars a day, but cover expenditures on treatment abroad on the amount to two million dollars.

INSURANCE OF CARS
Insurance of cars in Canada is mandatory. The police officer who has stopped the machine at the slightest pretext, will surely ask an insurance the driver. The penalty for its absence makes 5.000 dollars. Value of an insurance board depends on the insured sum, age and a sex of the driver (women are read by accurater in driving and pay less), driving experience, and on number of penal points for driving violation of the rules, and also accidents because of the owner, registered by police within a year.
Value of the insured sum depends both on the cost of the insured car, and on value of damage which can put this car. Therefore knowledge of the car worth 300 dollars (and in Canada such cars prices which else rather well walk, but stand a little because of age or appearance loss - not a rarity) doesn't mean that the insured sum will be so low. Such car can break very expensive machine and demand the big expenditure on treatment had because of it an accident of people. The insured sum decreases, but not much more if the owner of the machine does an one-sided insurance. It means that in case of accident because of the owner of the machine expenditures only the side which have injured because of it are paid, and it will incur expenditures on restoration of the machine. As a rule, economically one-sided insurance of justifies seldom and only in case of very low price of the insured machine. In all cases value of the insured sum seldom happens lower than 500.000 dollars.

The insurance board very strongly depends on age of the driver. If the person is the new driver aged from 16 till 18 years, his insurance board will be maximum and can reach to 300 dollars a month. According to the statistics, at this age drivers, especially men, do the maximum number of accidents. With increase in age of the driver the insurance board quickly falls even if it is the new driver.

The insurance board also strongly depends on an experience and conditions of the driving confirmed with insurance company. Therefore for reduction of an insurance board the driver shall show documentary that he drove the car earlier and what is the time, and whether there were at the previous insurance company to it any claims. The insurance board significantly increases if the driver gets penal points for driving violation of the rules, and especially in case of accidents through his fault. The system of penal points in Canada is based that for each violation of the rules of traffic registered by police, depending on their gravity, the driver receives also a fine (to it the receipt according to which he shall pay a penalty in bank within a week) is handed over, and he gets the penal points entered in the police computer. Every year in case of extension of an automobile insurance the insurance agent of the driver takes data from the police computer on the violations of the rules of traffic made by the driver and accidents. Depending on gravity of these violations and accidents to the driver to some extent, but always on quite big value raise an insurance board. Therefore even in case of violations or accidents drivers whenever possible shall try to reduce the penal points. It is thus useless and is dangerous to try "to agree" with the police officer, offering him money. The police in Canada very highly paid, also is brought up in strong respect for the law. Therefore it won't take money from the driver, and the driver thus risks serious responsibility for bribery to the official. But the driver can appeal to court concerning canceling of a penalty and make it or is independent, or having employed the lawyer on automobile affairs. In most cases or the police officer isn't on court, and then business will be automatically decided in favor of the driver, either the driver or his lawyer will be able to convince the judge about randomness of violation, and from the driver will remove a penalty. Also, if the driver on the fault was knocked itself, or damaged on the amount no more than 700 dollars someone else's machine, it is necessary to evaluate that for the driver will be cheaper - to make repair at own expense and not to inform on accident police and insurance company, or to make repair at the expense of an insurance, but from next year during long period to start paying significantly a big insurance board.

INSURANCE AGENTS AND BROKERS
Except specified, in Canada there is still very large number of types of different insurance - real estate, property, jewelry, patterns, etc. For obtaining more detailed information on questions interesting you and the inferences of insurance contracts we recommend to address to insurance agents of the companies which are specializing on an insurance interesting you. Below the list of Russian-speaking insurance agents of insurance companies known in Canada which will help you with business interesting you is given.

Insurance agents in Canada or treat specific insurance company and sell only its insurance policies, or are brokers and can sell policies of any insurance company. As a rule, brokers offer a little bigger choice as types of insurance, and the different prices of an identical insurance at the different companies. Agents of insurance companies of a choice have no, but an insurance offered by them usually well is quoted for the score or high reputation of their companies, or at the expense of more preferential terms of insurance.

Category: Insurance history in the different countries of the world | Added by: Chance23 (26.04.2014)
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