Working with a life & health insurance agent or company

They must:

• Fulfill their responsibilities to you and follow through on their promises outlined in the insurance contract
• Be licensed by FSRA and comply with the law

 They are required to:

• Be licensed by FSRA to sell life insurance in Ontario
• Comply with the Ontario Insurance Act and regulations
• Disclose to you in writing the names of providers of financial products, services and insurers that they represent
• Disclose to you in writing any conflicts of interest that they may have
• Have purchased errors & omissions insurance (E&O) so that you are protected if they are negligent or make errors selling you an insurance product

In addition to legal requirements, life and health insurance agents and companies should follow industry best practices. They should:

• Provide a letter of engagement that describes the services you can expect from them during and after the sales transaction;
• Provide written information about the products that they are recommending to you
• Ensure that a licensed agent is always available for consultation during business hours
• Provide their contact information, license number, and other information that you request
• Provide a copy of your application form and contract for your own storage
• Explain how your policy will work and recommend options based on your needs before you buy a policy
• Provide a clear statement of the insurance policy, its limitations, exclusions and terms
• Provide a clear indication of which features and benefits are guaranteed and which are not
• Allow you to change your mind and ask for a full refund at least 10 days and in some cases 20 days of receiving your policy (also referred to as a rescission right)
• Review your life situation and circumstances and recommend necessary changes during the life of the policy
• Keep records of your discussions
• Help your beneficiary make a claim when the time comes

This will help you get an idea of your assets, liabilities (debts) and income needs. When you provide accurate information to your insurance agent or company, they can make better recommendations for a policy that will fit your financial needs.

Your life and health insurance agent or company needs to assess the risk that you pose to the insurance company. You will probably have to complete a detailed health questionnaire. Be prepared to answer questions about your age, medical history, family medical history and whether or not you smoke. Non-smokers often get substantially lower premium rates than smokers.

Depending on the type of policy you are applying for, you may have to get a medical exam to provide evidence of insurability. When you sign your application form, you authorize the insurance company to contact your physicians, hospitals and the Medical Information Bureau (MIB). The insurer cannot decline your application based on the MIB report, but they can use it as a basis to request further information or increase your premiums.

Health isn’t the only risk. Your job, financial situation, dangerous activities and other factors are taken into account before your application is approved.

Most applicants receive the coverage they ask for and receive “standard” premium rates. If the company thinks you present a higher risk, they may charge higher premiums or alter the terms of the policy. Be sure to shop around as different insurers have different criteria.

When presenting you with options and product recommendations, your insurance agent or company should provide you with written policy illustrations that help explain how the products they are recommending might perform over time depending on interest rates earned within the policy. It is important to understand that the illustrations are not part of your contract, as not all the features of an insurance policy (e.g., cash value, dividends, premiums, death benefits) may be guaranteed. Insurance companies cannot predict the future any more than you can. They are making an educated guess about how a policy could perform.

Make sure you understand any assumptions that have been made to come up with proposed premiums and benefits. Ask questions to better understand the risks associated with each policy and what happens to the different features if these assumptions change for the worse (e.g., interest rates decrease).

Don’t feel pressured to accept the first policy presented to you. In fact, don’t work with an insurance agent or company that tries to sell you a policy without offering alternatives. Ask at least three insurance agents or companies for different policy options and illustrations on similar products so you can compare and find the one that best suits your needs.

The application asks for your personal information, such as your name, address, age, etc., and describes the type of insurance policy for which you are applying. It will also ask for a beneficiary, your method of payment and a health questionnaire. Make sure all information is accurate before signing the application and ask for a copy of the completed form for your records. Also, remember that failure to provide accurate and complete information can invalidate your policy.

After you sign, the application is sent to the underwriting department, where it is reviewed, the risk you pose is assessed and a decision is made on whether the policy can be issued on the terms you requested.

You should receive your policy within 30 days of your application. The insurance agent will deliver your policy and explain the terms, conditions and risks. If your policy is mailed to you, call your insurance agent when you receive it and ask them to go over the terms, conditions and risks with you. You should also check your personal information and policy information carefully yourself and report any errors. Check that the policy aligns with the information you submitted in your application and your expectations for coverage.

If you paid a portion of the premium with the application, you will usually receive a conditional or temporary insurance agreement that covers you while the company reviews your application. Check with your insurance company or agent for details.

All life insurance policies come with a rescission right, which means after you receive your policy, you have at least 10 days and, in some cases, 20 days to cancel it, and they will return any premiums you already paid. Visit Tips for how to read your insurance policy to learn what to look for when reviewing your policy.

Your agent will provide you with their contact information as well as the insurance company’s information. You should always be able to access a licensed agent for advice during business hours. If you need to alter a policy, change a beneficiary, or make a claim, contact your agent or company.

Life and health insurance agents and companies have obligations and responsibilities to you, the buyer. They are required to:

• Be licensed by FSRA to sell life, health and dental insurance in Ontario
• Comply with the Ontario Insurance Act
• Disclose to you in writing the names of providers of financial products, services and insurers they represent as an agent
• Disclose to you in writing any conflicts of interest they may have as an agent
• Have purchased errors & omissions insurance (E&O) so that you are protected if they are negligent or make errors selling you an insurance product

In addition to legal requirements, life and health insurance agents and companies should follow industry best practices. They should:

• Document their recommendations to you
• Keep records of your discussions
• Ensure that a licensed agent is always available for consultation during business hours
• Provide their contact information, registration number, and other information that you request
• Draw your attention to all relevant information before you buy a policy

The life and health insurance agent or company you select should:

• Discuss your health and dental care needs and make policy recommendations to you
• Answer your questions in language that you can understand
• Arrange the purchase of health and/or dental insurance for you
• Provide post-sale services like policy reviews and updates

When you have selected your life & health insurance agent or company, you should discuss your health and life situation with them, and identify what coverage makes sense for you. Any information you provide is kept confidential. Your insurance agent or company will guide you through the following:

1. Completing a health questionnaire 

You might not need to have a medical exam, but you will probably have to complete a detailed health questionnaire. Be prepared to answer questions about your age, medical history and your family’s medical history.

2. Reviewing insurance options 

The agent or company should present you with options and clearly explain the benefits of each one to you. Don’t feel pressured to accept the first one you hear. In fact, don’t work with an insurance agent or company who tries to sell you a policy without offering alternatives.

3. Submitting the application 

The application asks for your personal information such as your name, address, etc., and describes the type of insurance policy for which you are applying.

The application is sent to the underwriting department, where it is reviewed, the risk you pose is assessed, and a decision is made on whether the policy can be issued on the terms that you requested.

When you sign your application form, you authorize the insurance company to contact your physicians, hospitals and possibly the Medical Information Bureau (MIB). The insurer cannot decline your application based on the MIB report, but they can use it as a basis to set premiums or request further information from you.

It is your responsibility before you sign the form to make sure that all information on it is correct. Providing false or misleading information can invalidate your policy. Ask for a copy of the application form so you have a record.

4. Getting the health and/or dental insurance policy 

When you receive your policy(s), check all information carefully against your application form and report any errors. Tips for how to read your policy.

If your insurance company provides you with an insurance card for claiming purposes, you will likely receive it in the mail within the first month.

5. Post-sale service 

Your agent or company will provide you with contact information as well as the insurance company’s information. You should be able to access a licensed agent for advice during business hours. If you need to alter a policy or need help with making a claim, contact your agent or company.