Life and health insurance advice for newcomers to Ontario
If you’re a newcomer to Canada and live in Ontario, here is some life and health insurance advice, courtesy of the Financial Services Regulatory Authority of Ontario (FSRAO), that will come in handy as you plan coverage for yourself and your family.
There are seven major points that your insurance agent must keep in mind when they are selling you insurance:
- The agent should explain what life insurance is, how it works, and what is the best option for you and your family and why.
- They should conduct a wholesome financial needs analysis.
- They should conduct a risk assessment if the product has investment components and explain the ongoing costs or implications.
- They should work with you to submit your application and answer any questions you may have.
- Your policy should arrive within 30 days, and your agent should explain the terms, conditions and risks, including any fees, penalties, and clauses in your life insurance contract.
- Your agent should be accessible during business hours for further advice and policy alterations.
- Your agent should meet or talk with you regularly to ensure your coverage is still adequate or to determine if adjustments are required.
Awareness campaign to spread insurance advice
The advice from the FSRAO comes as the organization is launching an educational campaign providing insurance advice for newcomers, with the aim of protecting consumers. The campaign educates and empowers consumers to ask the right questions, understand the products they are being offered, and make informed decisions.
In 2023, FSRA conducted an extensive review of the life and health sector and uncovered troubling practices that were harming vulnerable consumers – including newcomers, international students, seniors and people with low financial literacy. The review found that some managing general agencies (MGAs) and their agents were using inappropriate training materials and selling complex products that did not meet consumers’ needs, which meant they were falling foul of providing accurate insurance advice for newcomers.
Also read: Newcomers, you might be eligible for Canada’s tax benefits and credits
Recent FSRA research found vulnerable consumers, including newcomers, international students, seniors and people with low financial literacy, were 16 percent more likely to experience an issue when trying to purchase life and health insurance products than non-vulnerable consumers.
The insurance client base is expected to rise
“Life insurance is meant to protect individuals and their families,” says FSRA’s Huston Loke, Executive Vice President – Market Conduct, “but purchasing a life insurance policy is not a requirement for international students, or those transitioning to permanent resident status. It’s important to help consumers know their rights and options for a policy that best meets their needs and circumstances.”
With more than one million non-permanent residents in Ontario, the base of newcomers and international students is expected to rise with recent updates to the Ontario Immigrant Nominee Program (OINP).
The campaign comes at a time when life and health insurance advice for newcomers is vital. Consumers are encouraged to understand their rights and ask questions about the insurance process.
It is worth noting that more than 8 million Ontarians have life insurance policies. Ontarians pay more than $9 billion in individual life insurance premiums, and the average Ontario household holds more than $500,000 in life insurance coverage.
Also read: Pre-arrival immigrants, get started toward a smooth transition in Canada
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