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Life Insurance Companies in Ontario Canada

FAQ About Life Insurance Companies

The following is a list of very common questions that come to our minds when we purchase a life insurance policy.

Can Life Insurance Companies Access Medical Records?

medical bills

Yes. It is possible for Life Insurance Companies to access medical records but only with your consent. You may authorize doctors to give your insurance company only certain relevant medical information. Some insurance companies may ask you to give a subject access request. This will allow those insurers to get access to all medical records and not just relevant ones. If you decide to check the medical information or tamper with it in any way the insurance company may refuse to offer you a policy.

Can Life Insurance Companies Raise Premiums?

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Life insurance companies may increase your premiums due to various factors. Some of the reasons for such an increase are due to changes in interest rates, mortality rates rising company administrative expenses, etc. In most cases, term life insurance increase premiums during renewal. If you meet with a serious accident disabling you or there is a significant medical condition that you suffer from then your insurer may increase premiums.

As a matter of fact, life insurance premiums rates increase by 10% every year that you age. Your actual age and insurance age may vary since insurers may round off your age as per your closest age. So, for a person born on Jan 1, 1957, the insurance company may consider your age as 61 years and not 60 years. There is a simple way to work around this problem. What you may have to do is to start new policy coverage and cancel the old policy. Another important aspect is to check if you are indeed benefiting from doing so when you calculate the cancellation terms. So, this solution could work in your favor or may not if you pay more cancellation charges than you save with the new policy.

Can Life Insurance Companies Refuse To Pay?

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There are many reasons for a life insurance company to refuse to pay out your policy.

  1. The type of life insurance policy that you purchased may not match your needs. Unfortunately, this may be something that your beneficiaries find out after you are gone.
  2. If you die after the end of your policy term then it could be a reason for your life insurance company to not payout.
  1. Attempting suicide or taking your own life is a good enough reason for the life insurance company to invalidate the claim.

Policy Exclusions

  1. When you die while participating in an adventurous sport that is very dangerous and life-threatening then your insurer may you’re your claim. These may include sports such as skydiving or some sort of dangerous acrobatic sport. Usually, the policy will have specific wordings of exclusion about such sports.
  2. In case you died in a war-torn country and were killed by terrorists or any such restricted activity, the insurer may not payout. This also includes countries where you may just visit and unfortunately some kind of political unrest killed you.
  3. You did not give honest answers while filling up the insurance company questionnaire. Whether it is about your medical condition, or a lifestyle habit, during claim time everything matters. The insurance company will only look for loopholes to deny the claim. You were dishonest in your answers when you filled out the insurance form or questionnaire. For example, if you were a smoker and did not say so on your application then it could be a reason for denial.

Non-Payment of Premiums

  1. You did not pay the premium and the policy lapsed despite many reminders. So, there is no policy in place if you did not pay up even after the 30 day grace period. Or, the only possibility could be if you died during the grace period. In such a case the insurer may deduct the unpaid premium from the benefit amount.
  2. The beneficiary on your life insurance is a minor.

Can Life Insurance Companies Tell If You Smoke?

The insurance companies may test your urine, blood, or saliva by a mouth swab to determine if you smoke. This could be over a certain span of time and may look for nicotine or cotinine.

How Do Life Insurance Companies Make Money?

The main source of money for life insurance companies is underwriting premiums. When the insurer collects premiums from the insured, they do not expect all of them to put in a claim. So, for a year if the amount that an insurance company pays out less amount in claims than the premiums then they make a profit.

Why Do Life Insurance Companies Take Blood?

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Life insurance companies take blood to check if the applicant has any serious or life-threatening diseases. These tests help them to know if there is a potential for a medical issue to come up in the near future. They check for blood tests linked to the functioning of major organs. These may include the heart, arteries, liver, kidney, bladder, pancreas, etc. Apart from these, they may also check for HIV, STD, and any abusive drug use.

Who Regulates Life Insurance Companies in Ontario?

The Financial Services Commission of Ontario regulates the life insurance companies along with many other companies in Ontario. RIBO (Registered Insurance Brokers Association of Ontario) regulates the insurance brokers in Ontario.

Which Life Insurance Companies Are the Best

Life insurance products may be very different from company to company. You may look at company market share, ratings, company reviews by customers, and income resources.  The company performance also shows which ones are reliable and trustworthy since insurance is an industry where trust matters.

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