# Life Insurance in the Reserves



## readytogo (8 Jun 2010)

I tried a search on this topic but cant seem to locate anything....first back story, me and my wife had a meeting today with a financial planner to discuss a private life insurance policy, we are both young and it was way overdue but that is neither here nor there.  All was going well but when i mentioned to him that i had an application in process to join the army reserve he tensed up a bit and told me that there may be a problem with that due to the "potential deployment" that i may go on.  I explained to him that in the reserve any deployment is completely voluntary (barring some kind of wwII conscription type activity)  He told me that the insurance company may not see it that way??

     So i guess im looking for someone else to tell me if they are a reservist and have a private life insurance policy and if so with whom?

any insight is greatly appreciated

Cheers


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## mariomike (8 Jun 2010)

For what it is worth, there is discussion of life insurance in Reserve Force Benefits:
http://www.forces.ca/html/reserveforcebenefits_en.aspx?sm1=2&sm2=3&sm3=2


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## dapaterson (8 Jun 2010)

SISIP offers term insurance at competitive rates that has no "act of war" disclaimer - that's what trips up most policies for member of the military.

See http://www.sisip.ca/en/Insurance_e/term_e.asp and look for the "Reserve Term Insurance".


Note:  I am not an agent for SISIP, but am a policyholder.  I receive no commission from this referral.


In addition, there are other benefits in place should you suffer a service related injury or death.   More information on those benefits is online at: http://www.cmp-cpm.forces.gc.ca/cen/pub/ddb-pdi/tc-tm-eng.asp


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## stealthylizard (9 Jun 2010)

Pretty much as dapaterson mentioned.  Most life insurance policies become void if killed in a "war. riot, civil uprising.... etc.  I don't know if they would cover your death if a training accident happened either.

Go with SISIP.


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## brian8225 (4 Feb 2012)

This was the most relevant topic I could find in the search history. A few questions...

I currently have private insurance but am not sure what the impact would be upon enlisting. For regular forces, would enlisting have an impact on insurability or premiums? Would I lose my current policy?

It appears a training accident or death while deployed make your dependents eligible for survivor benefits - are these comparable to a decent life insurance plan, e.g. 250k+, and would the spouse and each dependent receive a payout?

How do the group premiums compare to private insurance? Is there a limit on the payout amount, e.g. 500k?


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## SeaKingTacco (4 Feb 2012)

Only your insurer can answer those questions. Put it to them in writing and insist upon a written response.


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## dapaterson (4 Feb 2012)

The coverage of Term Insurance plans through SISIP depend on what you elect.  I find their rates are comparable or better than those of other insurers when compared for age and smoking/non-smoking.


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## Pusser (4 Feb 2012)

There are many types of insurance products out there.  Understand the difference between "whole life" policies and "group term" policies.

Whole life policies tend to combine an insurance product with an investment product.  You pay into it and it provides an insurance payout if you die prematurely, but if you live past a certain point, you can cash it, in hopes that your investment has grown.  In my personal opinion, it does neither well.  It's an expensive form of insurance (fairly high monthly payments, depending on your goals) and the long term return on your investment is poor.

Group term policies are insurance alone and not an investment in any way.  Your monthly fee (albeit considerably cheaper than an whole life policy payment) is lost if you live too long.  You cannot cash in a term policy in later years.  However, by spending significantly less on a term policy, you can invest the difference (i.e. that additional money you would have spent on a whole life policy) into other investment vehicles that will likely pay a higher return.  This is actually the advice of the "Wealthy Barber" (a great book).  "Buy term and invest the rest."

Out of the group term policies available, I've never seen one that can hold a candle to SISIP.  It is significantly cheaper than other term policies that I've looked at and pays out better.   SISIP has NO war clause (most other policies do).  It pays out regardless of how you die (combat, training accident, etc, even suicide, provided the policy has been in place for a minimum time - can't remember if it's one or two years).  It also pays easily.  I remember talking to the regional SISIP agent a few years ago in reference to an accident where a T-33 thundered into the Atlantic.  The pilot had a private insurance policy that refused to pay without "proof of death" (i.e. a dead body).  It took two years to find the body (even then, it was only by chance that a part of the aircraft got dragged up in a fishing net).  This was despite the fact that there were sworn witness statements saying that the pilot had gotten into the aircraft, taken off and never returned (we spent a week looking for it).  On the other hand, the guy in the back seat had SISIP, which paid immediately.

Remember also that the purpose of life insurance is not to make your beneficiary wealthy, but rather to ensure that they can cope financially with the loss of a breadwinner.  Your calculations should be based on that, not a lottery dream.

As an aside, don't buy mortgage insurance at the bank.  I always decline it.  Again a SISIP group term policy is cheaper and pays better.  Keep in mind that mortgage insurance only pays out your mortgage.  On the other hand, if you buy enough SISIP, the longer you live, the more your beneficiary receives after the mortgage is paid - less incentive for your wife to smother you in your sleep  ;D.


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## brian8225 (4 Feb 2012)

Mortgage insurance is as big of a scam as credit card balance insurance and anything remotely related to an "extended warranty" plan. 

I currently have term insurance and understand the mechanics of how it works vs whole life. I prefer to keep insurance/investments separate.

How particular is SISIP in terms of medical issues? I have a genetic predisposition that has no impact on my life currently but put me at a 300% rating for a term 20 plan.  Whether it makes me ineligible to enlist at all is a separate issue but not something I'd think would matter (risk of cancer 55+ if I'm completely negligent with my life/health).

The ease of access and coverage regardless of cause of death is definitely a huge benefit and something I assume I'm not covered for currently.

Assuming SISIP deemed me uninsurable and my current policy made me ineligible for benefits resulting from training/combat, are the survivor benefits enough to keep the family at home or would most service person's spouses be looking at going back to work in the event of death of the service person assuming they are the bread winner?

250 or 500k might sound like a lot but in a lot of parts of the country that's a small 2 bedroom house.


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## dapaterson (4 Feb 2012)

Pusser said:
			
		

> Keep in mind that mortgage insurance only pays out your mortgage.  On the other hand, if you buy enough SISIP, the longer you live, the more your beneficiary receives after the mortgage is paid - less incentive for your wife to smother you in your sleep  ;D.



Umm... a paid off house PLUS money in the bank plus half your persion as a survivor - if Mrs Pusser's weighing her options, things are looking better and better for her after your "tragic accident"...


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## Eye In The Sky (4 Feb 2012)

Just to give you an idea of SISIP rates (for Reg Force, OGTI):
  
I have max coverage ($400k) for both myself and my wife.  We are both 41, and I pay $84 a month total.  As it comes directly off my pay, I don't even notice it.

I believe the base amount of coverage is $10k, is sold in units of 10k as well, with differences in $/10k unit being affected by age and smoking status.  

As for when no payment on the policy would be made, the only ones I recall being briefed about at the SISIP office in Hfx were the 'self-destruction' clauses; (1)  if you self-terminate within 2 years of a new policy, there is no pay-out, and (2) if you increase your coverage, and self-terminate within 2 years of the increase, your policy will be paid out at the previous coverage rate.


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## Pusser (4 Feb 2012)

dapaterson said:
			
		

> Umm... a paid off house PLUS money in the bank plus half your persion as a survivor - if Mrs Pusser's weighing her options, things are looking better and better for her after your "tragic accident"...



Yes, but the longer I live, the more she gets - which also gives her more time to plan!


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## Pusser (4 Feb 2012)

brian8225 said:
			
		

> Mortgage insurance is as big of a scam as credit card balance insurance and anything remotely related to an "extended warranty" plan.
> 
> I currently have term insurance and understand the mechanics of how it works vs whole life. I prefer to keep insurance/investments separate.
> 
> ...



I honestly can't say for sure for the Reserve policies, but in the Regular Force, there is no medical or insurance questionnaire for the member (might be for a non-serving spouse).  I would argue that anything that would render you uninsurable by SISIP, would also keep you out of the CF as medically unfit.


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