Dear Monty

Question 1
"Does one's beneficiary collect BOTH the cash value AND the death benefit if one purchases whole life insurance or Universal Life insurance?

Answer: Universal Life Insurance And Variable Life Insurance policies can be quite complex life insurance policies, they can virtual be custom designed. Simply put, only a policy with an increasing death benefit option will add the cash value of the policy to the death benefit. Going with out is an option as both choices (increasing death benefit/ Universal Life Insurance) effect the overall premiums of the policy differently. Whether or not to include this option is the consumer?s choice and will be decided upon at the time of purchase.

Question 2
"In the unlikely event a term life insurance company goes out of business, are my premiums insured. ie... would I be out all my payments that I made over the last 20 years. Would my term life insurance policy still be enforceable, by law, even though the company went bankrupt or out of business?"

ANSWER: Most Universal Life Insurance Companies (All the ones we deal with) are members of Compcorp. CompCorp acts like an insurance company to the insurance industry. In the event that an insurance company goes out of business CompCorp protects Canadian life insurance policy holders against loss of benefits to a maximum of $200,000 and If your total benefits exceed these amounts, CompCorp covers 85% of the promised benefits, but not less than these amounts.

For more information check out there website http://www.compcorp.ca . There is has only been one instance where CompCorp was needed back in 1993.

Hope this helps

Sheldon

Articles from November 2006
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