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Hybrid policies not a panacea: advisor

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Life Health Professional | 21 Oct 2015, 08:15 AM Agree 0
While insurance carriers move to develop new hybrid policies built around life insurance some in the industry question their ultimate value
  • life insurance professional | 21 Oct 2015, 12:44 PM Agree 0
    It is a fair point that certain clients may require the critical illness and disability protection for a longer period of time then some Hybrid products may offer. If that is the case then those clients should be presented a solution that fits their needs. However, there is a large portion of the Canadian population that doesn't have enough life, disability and critical illness insurance. If a Hybrid solution offers a client the protection they need in case the unthinkable happens and they become disabled or suffer from a critical illness wouldn't it be better to get some benefit now rather than none, which may occur if the client cannot afford the platinum packages of the more expensive stand-along coverage.

    It is important to have a thorough discussion with your client, understand their needs, and ensure they haev the appropriate coverage that fits within their financial means; and not simply the best package or nothing at all. It may be harder to explain hybrid products to clients, that's where insurances companies can play a roll and make a straight forward product and provide documentation that clearly outlines the benefits.
  • TM | 21 Oct 2015, 06:12 PM Agree 0
    I totally agree that having 'something' in place IS better than having no coverage at all. However, many advisors are not confidently trained in the living benefit products they sell. Knowing this insurance companies make it easier for agents to make a sale, by offering hybrid products, rather than putting the resources into training advisors and/or 'training clients'. This could so easily be done via interactive mediums...if we can do our taxes this way (ie. Turbo Tax, or as I call it Tax Prep for Dummies) we can surely educate clients so they can make informed decision. Granted, doing full and proper fact finding and then matching needs/wants to a client's budget can be tricky. But there are lots of ways to reduce premiums for clients. Namely: use term insurance, for both life and critical illness, use longer duration elimination periods and shorter benefit periods for disability income insurance and long term care funding. If the advisor is adequately trained s/he can 'find' the premium and apply it to the best products available for the client, rather than capitulating and using hybrids that force clients to make trade-offs later in their lives and later in the life of their policies. TM
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