September is juvenile strategies month, and in keeping with that theme we are going to review a great policy that evolves to provide more than just a critical illness benefit. Sun Life child CI creates an opportunity for families to guarantee the insurability of their children, provide vital coverage as an adult and transfer wealth. Let’s assume that we are working with 5-year-old Sarah, and we are going to place a T-75 $100,000 Sun Life critical illness policy. Using this example, we will see how Sarah’s Sun Life policy will provide her with a life-long benefit.
We chose Sun Life because it has a unique policy in the market that gives it a competitive advantage at every phase of Sarah’s life. Here are the following phases:
Ages 5 – 18: during this period, Sarah is covered for additional childhood illnesses and if she were to become ill, the family would have the $100,000 to cover expenses, alternative treatments and time off to care for Sarah. At age 18, Sarah’s parents would add the long-term conversion option so that Sarah can convert her CI to LTC at a later age.
Age 25: 75% of eligible premiums are automatically refunded to Sarah’s parents. They use the money to help with a down payment on Sarah’s first home.
Age 40: Sarah can choose to cancel the policy and receive a refund of premium. If she chooses to maintain her benefit, she will receive a refund of all premiums paid up until the date she cancels.
Between ages 60 – 65: Sarah has a couple of options. She can cancel her coverage and receive a full refund of premiums OR she can use the refund of premiums to help pay for her LTC conversion.
Sarah’s CI policy has been a constant benefit throughout her life. Starting with a CI benefit that protects her family. The policy then provided her with help on a down payment for a home. Then continued to protect her for her working years for a critical illness. Fortunately, in our example, she doesn’t claim. However, she then has an LTC benefit that will be vital in her retirement years.
Make sure you speak to your clients about the opportunity to put coverage in place that will provide a life-time benefit to their child. Contact your BD to discuss opportunities!
Ken Poniatowski, CFP
Business Development Specialist
Qualified Financial Services
905.475.6505 x 1318