I had never seen anyone cry like that before.

Streams of salty sadness poured down his face. His body remained completely still, drained of every ounce of its strength. It was as if all energy had left him, but the tears just wouldn’t stop. His eyes anguished, lost and frightened. His heart visibly broken.

My own heart ached. For him. For the life that had ended too soon. And for his young children who would likely only remember their Mom through photos and stories.

I had never seen anyone cry like that before.

As Financial Advisors, we witness firsthand the triumphs and the tragedies of the human experience. We help our clients plan for the future, identify risks and opportunities along the way and prepare them for the unexpected. The true test of whether we have done our job well happens in those moments when we are sitting across from a grieving spouse and we wonder, “Could we have done more?”

People often ask me, “How much life insurance is enough?” I can tell you truthfully that in moments like the one I had that day, no amount would have been enough. The true value of a life is immeasurable. No death benefit has ever or will ever mend a broken heart or bring a loved one back. No amount of money can replace a mother’s hug.

But I also know that life insurance can help the people left behind move forward, however broken they may be and however small the steps they take. It can provide an orphaned child with the continued comfort of their own bedroom and keep a “For Sale” sign off a lawn. It can give a widower the choice to take time off from a stressful career and stay home, until he is ready to face the world again. It can allow a mother to keep her son in hockey camp, even though his Dad is no longer sitting in the bleachers. When designed correctly, I know for certain that life insurance can at least lessen the financial burden that a death can place on a family.

Most people are thinking well into the future when discussing their need for life insurance. However, we have to determine how much coverage is needed, based primarily on what we know today.

All outstanding debts (mortgages, lines of credit, business loans, etc.) should first be listed. Then other expenses – like the cost of a funeral and taxes – should be added up. Usually, any sources of cash already available are then factored in, such as RRSPs, CPP and other savings. This exercise is often a real eye opener for people, painting a very clear picture of the impact their death would have on those left to pick up the pieces.

But addressing lump sum needs is only part of the equation. You must also consider the impact the loss of your future earnings would have, especially when others rely on you and that income. Consider the many families in this Oil & Gas fueled province, whereby one person is the primary income earner and the other the primary caregiver. I would argue that the premature death of either of these spouses could financially wipe out their family pretty fast, not just the death of the income earner. The goal is to have enough of a benefit remaining – once all debts are paid – to invest conservatively and replace at least some of the income that’s been lost.

It’s one thing to have a mortgage-free home. It’s another thing entirely to be able to keep the lights on and the fridge stocked.

A few short months before my client’s wife died, we had met and completed this type of analysis. We “did the math” and figured out how much life insurance would be appropriate for each of them based on what we knew today. But they were busy, working parents. They always planned to get around to it, but there never seemed to be a perfect time.

General George Patton once said, “A good plan vigorously executed right now is far better than a perfect plan executed next week.” Sure. Take the time to do the math. But – more importantly – make the time to get some coverage in place, right now.

Usually the biggest regrets people have are of the things they never did. Choose to live your life – for all its worth – without regrets.

Most will agree that the decision to purchase a home is often an exhilarating, overwhelming and expensive one. And with repayment timelines (aka: amortization periods) lasting longer than most marriages do these days, it is not a commitment to be entered into lightly. It’s also not surprising that most people choose to protect themselves and their asset by purchasing Mortgage Insurance.

Historically, banks and other mortgage lenders focused on providing purely life insurance to the borrower. The concept was and is simple; “Leave your loved ones mortgage free in the event of your untimely passing.” Makes sense.

As competition in the mortgage marketplace heated up, most lenders ramped up their product offerings by adding options to pay the borrower’s monthly mortgage payments for a period of time in the event of a disability. Even newer to the market came an option to pay off your full mortgage balance in the event of being diagnosed with a life threatening or “critical” illness. Personally, I think these enhancements are great and provide more comprehensive coverage to the consumer.

Did you hear the “but” coming?

The primary problem (and there are several) that I have with the insurance products that mortgage lenders market is the way they are underwritten. Underwriting is the industry term for “checking you out.” More specifically, Wikipedia defines underwriting as “the process that a large financial service provider uses to assess the eligibility of a customer to receive their products (equity capital, insurance, mortgage, or credit).” Mortgage insurance sold through a bank or other mortgage lender is considered group insurance. To keep costs under control, these providers access your eligibility to receive their products through asking a series of multi-part, medical questions. If you answer “no” to all questions, you are approved…to pay the premiums.

The real underwriting happens if you have a claim. That is when your medical records are requested and that is when the issues often arise. If there are any discrepancies between the “No’s” on your application and the information contained in your files, the claim will likely be denied.

Don’t get me wrong. If an applicant intentionally withholds information that affects their ability to acquire coverage, their claim absolutely should be refused. But what about the client who did not realize their doctor had noted their cholesterol was high at their last check-up or who had forgotten that routine blood work that had indicated elevated sugars? Should they have answered “No?”

More importantly, should their widow be left owing a mortgage alone?

In my opinion, a better way to ensure you and your family are protected is to apply for stand alone, individually owned insurance. Whether applying for life, disability or critical illness coverage, you have the option to undergo complete, professional medical (and financial, if needed) underwriting to give the insurer all the information they need to make you an offer for coverage. Everyone goes into this contractual arrangement with their eyes open, all their cards on the table and no one has to wonder if the benefits will ever be paid out.

Now that really makes sense.

If you want to ensure your current mortgage insurance approves you for more than just the right to pay premiums, contact us.