Disability, Life, and Anti-Money Laundering
Protecting Income: Disability Insurance | 1 |
Assessing Contributions | 5 |
Canada’s Disability Insurance Plan | 7 |
STD and LTD Benefits | 10 |
Disability Impacts the Family | 11 |
Historically Speaking | 12 |
Disability Statutes and Programs | 15 |
Council of Canadians with Disabilities | 15 |
Employment Issues Facing Those with a Disability | 17 |
Disability Costs to Society | 18 |
Disability and Human Costs | 19 |
Disability and Physical Costs | 20 |
Disability and Social Interaction | 21 |
Disability and the Resulting Financial Costs | 21 |
Insuring Disability Through Private Insurance | 23 |
Earned Income is an Asset | 23 |
Defining Disability for Insurance Purposes | 24 |
“Regular Occupation” Definition | 24 |
“Transitional Your Occupation” Definition (TYO) | 26 |
“Modified Own Occupation” Definition | 27 |
“Disability in Any Occupation” Definition | 27 |
Involuntary Unemployment | 27 |
Can the Policy Be Canceled or non-Renewed by the Insurer? | 28 |
Policy Elimination Period | 29 |
Disability Benefit Period | 30 |
Occupational Classification | 30 |
General Description of Occupational Classes (Chart) | 31 |
Benefit Limitations Based on Occupational Classes (Chart) | 32 |
The Uninsurable | 33 |
Partial Disability | 34 |
Medical Underwriting | 36 |
Financial Underwriting | 38 |
Guaranteed Future Insurability | 39 |
Renewability | 39 |
Policy Pricing | 40 |
Group Disability Insurance | 40 |
Disability Insurance and Hobbies | 41 |
Selecting Financially Strong Insurance Companies | 41 |
Insurance Rating System Criteria | 42 |
The Insurance Rating System’s Values | 42 |
Is the Rating Trustworthy? | 43 |
Financial Security Ratings | 44 |
Insurer Risk | 45 |
Ethical Issues Relating to the Financial Industry | 46 |
Suitability | 49 |
Conflicts of Interest | 50 |
Prioritizing the Needs of the Client | 50 |
Canadian Council of Insurance Regulators (CCIR) | 50 |
Face-to-Face Presentations | 50 |
Adequate Communication Skills | 51 |
United Insurance Educators, Inc.
Disability, Life, and Anti-Money Laundering
Finding the Right Products | 52 |
Full Disclosure | 52 |
Recognizing and Addressing a Conflict of Interest | 53 |
Placing the Client’s Interests First | 54 |
CCIR Considers Issues in the U.S. | 56 |
Life Insurance | 57 |
Insurance Agents | 57 |
Life Insurance Contracts (terminology) | 58 |
Life’s a Gamble | 59 |
Defining Risk | 60 |
Comfort Level | 61 |
Insurance Risks, Perils, & Hazards | 62 |
Chance of Loss | 62 |
Morale & Moral Hazards | 63 |
Law of Large Numbers | 63 |
Types of Risk | 64 |
Investment Risk | 65 |
Issuance | 65 |
Insurable Interest in Life Insurance | 67 |
A Fairytale Case Study | 68 |
Stranger-Originated Life Insurance (STOLI) | 69 |
Charitable Use of STOLIs | 72 |
Life and Viatical Settlement Agreements | 74 |
Definitions | 74 |
Understanding the Viatical Product | 76 |
How do Viatical Settlements Work? | 77 |
Purchasing Partial Policies | 77 |
Viatical Participant Confidentiality | 77 |
Paying the Viator | 78 |
Buyer’s Remorse | 78 |
Following Payment for the Life Policy | 78 |
Checking Health Status through Physicians | 79 |
Extra Policy Benefits | 79 |
Other Available Options (Besides Selling the Policy) | 79 |
What Every Policyowner Needs to be Aware Of | 79 |
Viatical Settlement Development | 80 |
Medical Underwriting | 81 |
Insurance Underwriting | 82 |
Consumer’s View | 83 |
Policy Ownership Transfer | 85 |
Policy Premium Payments | 85 |
Outstanding Policy Loans | 88 |
Additional Investment Fees | 88 |
Escrow Trust Accounts | 89 |
Viatical and Life Settlement Disclosures | 90 |
Personal Information Protection & Electronic Documents Act | 91 |
Insurance Policy Effective Dates | 92 |
Material Facts | 92 |
Beneficiary Designations in General | 93 |
Estate Creation | 95 |
Changing Social Times | 96 |
Two Basic Insurance Terms: Premium & Peril | 96 |
Betting Against the Insurance Company | 97 |
United Insurance Educators, Inc.
Disability, Life, and Anti-Money Laundering
Good Financial Plans Involve Life Insurance Contracts | 97 |
The Intent | 98 |
Estate Planning: Procedures, Not Products | 99 |
Providing for Others Through Planning | 100 |
Using Discipline to Achieve Security | 100 |
Clarifying Client Objectives | 101 |
The Need for Broader Knowledge | 101 |
Basic Goals of Life Insurance | 102 |
Life Insurance Trusts | 102 |
Trust Beneficiaries | 103 |
Kinds of Life Insurance | 103 |
An Estate Planning Tool | 103 |
Term Insurance: No Money, Just Coverage | 104 |
Whole Life Insurance: the Granddaddy | 104 |
Endowment Insurance: Forced Savings | 105 |
Universal Life: Separating Expenses | 105 |
Variable Universal Life (VUL): Few Guarantees | 106 |
Survivorship Life: Insuring Two or More People | 108 |
Single Premium Whole Life: One Payment | 108 |
Buy-Sell Agreements | 109 |
Annuities | 110 |
Annuity Terminology | 110 |
General Policy Provisions | 114 |
Planning for Increased Life Spans | 115 |
Longevity Risk | 116 |
Variable Annuities (Segregated Funds) | 116 |
Maturity Guarantees / Death Benefit Guarantees | 117 |
Performance of Funds is Not Guaranteed | 118 |
Types of Contracts | 118 |
Registered Retirement Savings Plans (RRSP) Section 146 of the Income Tax Act | 119 |
Non-Registered Annuities | 120 |
Prescribed Treatment / Non-Prescribed Treatment | 121 |
RRSP Types | 123 |
Contributions | 123 |
Spousal RRSP | 124 |
Taxation of Deferred Annuities | 124 |
The Decision to Buy | 124 |
Life Income Funds | 125 |
Immediate Annuities | 126 |
Payout Options | 126 |
Single Life Payout Option | 127 |
Joint-and-Survivor Payout Option | 128 |
Installment Refund Life Payout Option | 128 |
Variable Annuity Payout Option | 129 |
Term Certain Payout Option | 129 |
Other Products | 129 |
Dollar Cost Averaging | 130 |
Annuity Beneficiary Designations | 131 |
Annuity Contingent Beneficiaries | 131 |
The Insurance Contract | 132 |
Deposits | 133 |
Surrender Penalties | 134 |
Retirement Savings Plan (RSP) Endorsements | 134 |
United Insurance Educators, Inc.
Disability, Life, and Anti-Money Laundering
Switches | 135 |
Investment Options | 135 |
Product Suitability | 136 |
Saving Adequately | 136 |
The Reason for the Goal (the Reward) | 137 |
Determining Goals | 140 |
Basic Product Information Requirements | 141 |
Determining Product Suitability | 142 |
Product Replacement | 144 |
Identifying Suitability Issues | 145 |
It is Not a Liquidity Issue, But Rather a Suitability Issue | 146 |
A Comprehensive Financial Plan | 147 |
Suitability in the Retail Sale of Financial Products | 149 |
Determining Suitability According to the Report | 154 |
Annuity Surrender Values and Penalties | 155 |
Financially Sound Insurers | 156 |
Anti-Money Laundering | 157 |
Client Due Diligence | 158 |
Determining Identification in a Face-to-Face Interview | 159 |
Identification of New Business Clients | 160 |
Confirming the Client’s Business | 161 |
Collection of Beneficial Owner & Director Information | 161 |
Not-For-Profit Organizations | 161 |
Exceptions to Requirements for Business Clients | 162 |
Third-Party Determination | 162 |
Politically Exposed Foreign Person (PEP) Requirement | 163 |
Retention of Client Records | 163 |
Suspicious Transactions | 164 |
“Red Flag” Indicators | 164 |
Tipping Off | 164 |
Large Cash Transaction Reporting | 164 |
The Proceeds of Crime and Terrorist Financing Administrative Monetary Penalties Regulations | 165 |
Terrorism Produces Insurer Risk | 165 |
Proceeds of Crime and Terrorist Financing Act | 166 |
Object of the Act | 167 |
Company Objectives | 168 |
Policy Application | 169 |
Restricted Businesses and Entities | 169 |
AML Education | 169 |
A Change in Thinking | 170 |
Product Identification | 171 |
Money Laundering Indicators Not Unique to Insurance Products | 174 |
Characteristics of the Money Launderer | 175 |
Last Page | 177 |
United Insurance Educators, Inc.