Few Canadians have comprehensive individual insurance that protects their families in the event of an early death, disability or critical illness, says Steven Parker, Assistant Vice-President, Product and Marketing, Individual Insurance, Manulife Financial. For that reason, Manulife has introduced Synergy, the country's first all-encompassing plan.
The product, launched last June, grew out of a survey of more than 1,000 Canadians ages 30 to 50 with annual household incomes between $50,000 and $150,000. "The most important statistic was that 92 per cent of these individuals didn't have a comprehensive protection plan that included individual life, disability insurance and critical illness insurance," he says. Fewer than 60 per cent had an individual life insurance plan, just 21 per cent had an individual disability plan and only 13 per cent had an individual critical illness plan. "It's unique in its design in that it combines life, critical illness and disability insurance into one solution," says Mr. Parker
"So now there's only one risk management conversation with the client. There's only one illustration, versus three stand-alone illustrations for three stand-alone products; only one application versus three stand-alone applications; one underwriting process and one single premium to pay for these coverages, versus starting out with three individual coverages and having to pay three separate premiums."
The comprehensive plan is cost-effective and saves consumers money, he says.
"If you take a 30-year old male buying $250,000 of our renewable Synergy coverage, the monthly premiums would save the client up to 34 percent, compared to buying the equivalent of three stand-alone policies, making it a lot more affordable for Canadians."
The program is offered to people 18 to 50, and the coverage lasts till age 65. There are two premium options – a 10-year renewable premium, or a level premium to age 65. The available coverage is $100,000 to $500,000. All the coverages share one "pool" of money. The critical-illness portion is 25 per cent – or $125,000 on $500,000 of coverage. The monthly disability benefits are .5 per cent of the available insurance, or $2,500 a month on a $500,000 plan. The life insurance is 100 per cent of the available insurance – so someone who has received $125,000 for a critical illness would have $375,000 left for life insurance.
It is vital that families protect themselves from the unforeseen, says Mr. Parker. "Canadians told us the risk is real." The risk that a 40-year old male non-smoker will become at least temporarily disabled before age 65 is 34 per cent, he says. The risk of developing a critical illness before age 65 is 28 per cent, and the risk of dying before age 65 is seven per cent. "Most important, the probability of that 40-year-old dying, becoming critically ill or disabled before age 65 is 60 per cent."
Many Canadians raising families have large debts. Among those surveyed, 87 per cent had a mortgage, and 62 per cent had total financial liabilities of $100,000 to $500,000. "In the event that something happened to them, how would they continue to pay those bills or that mortgage if their pay cheque stopped coming because of a critical illness or disability?" asked Mr. Parker.
Without individual or group insurance, "at the extreme, they could lose their home."