A few posts back we reviewed Manulife’s Synergy, a 3-in-1 solution that encompasses life, critical illness and disability insurance. While it’s a simple product that covers the major risks in life, there isn’t much customization associated with it. Every Synergy policy must be comprised of the three types of insurance, with no way of mixing and matching the type of protection you want, or the amount of insurance for each type. That doesn’t mean there isn’t a product with more customization available. Humania, a company based in Quebec, came up with a solution that satisfies all your customization needs by allowing you to mix and match to your heart’s content. The product is called P.A.G.E., which is short for ‘Protection for the entire family, Affordable rates, Global coverage, Easy application.’ Let’s take a look at some of the features of Humania’s P.A.G.E.
Features of Humania’s P.A.G.E.
Humania’s P.A.G.E. is a product that enables the insured to build a tailor made policy based on his needs. There are 11 different types of coverage to choose from in total, so the combinations are virtually endless. All the options fall under a single policy, which saves the insured on policy fees, much like Synergy does. Each component of the policy has its own premium, and all the premiums of the options chosen are added up along with the policy fee to arrive at the total premium. Here is the complete list of coverage with a brief summary of how they work:
- Life insurance – Permanent coverage with a benefit amount of $5,000-$25,000, which is ideal for final expenses. It has an issue age of 14 days to age 64. An early partial payment of 50% can be made for those who are medically determined to have less than six months to live. Premiums are level and paid until age 100, at which point this portion of the policy is paid-up and no further premiums are necessary to keep the policy in force. It is basically term-to-100 life insurance within the policy.
- Critical illness – All the critical illness insurance options on this policy are renewable term to age 75, meaning the costs increase every 10 or 20 years until this portion of the policy expires at 75. The issue age is 14 days old to 60 years old, with a benefit amount of $25,000-$1,000,000. Premiums at issue and renewal are guaranteed. The insured can choose between coverage for the 4 main illnesses or a more comprehensive list of 25 illnesses. The 4 main illnesses are life-threatening cancer, heart attack, stroke and coronary surgery. These account for over 80% of all critical illness claims. The benefit will be paid if the insured suffers from one of the covered illnesses and survives for 30 days. A benefit of 10% of the chosen coverage amount, up to $10,000, will be payable for diagnosis of a non-life-threatening cancer.
- Critical illness/life insurance – The policy will pay the benefit amount on the earlier of the insured’s death and when he suffers a critical illness.
- Critical illness/return of premium on death – The policy will pay the benefit amount if the insured suffers a critical illness. It will only return the premiums, without interest, if the insured passes away before that happens.
- Total disability as a result of an accident – Although this has a short waiting period and a long benefit period can be chosen, the maximum benefit amount of $3,000 limits its effectiveness for high income earners. Coverage is available from age 15 to 99, although premiums are guaranteed only up to age 71 and benefit amount decreases to 50% thereafter.
- Total disability as a result of a sickness – Coverage is similar to the total disability as a result of an accident, except that coverage ends at age 71.
- Partial disability – The issue age is 15 to 59 years old and the total disability as a result of an accident must be chosen as well. This pays out a benefit when the insured is not totally disabled but cannot perform at least one of his main duties or cannot work at least 50% of the time in his occupation. The benefit is payable for up to six months.
- Hospitalization – A daily benefit is paid when hospitalization occurs due to an accident and/or sickness, for the duration of the hospitalization. The issue age is between 14 days and 79 years old.
- Reimbursement of expenses – Various medical expenses such as dental care as a result of an accident, hearing aids, and out-of-country medical costs are reimbursed.
- Accidental death and dismemberment – Pays out a lump sum payment due to an accidental death or dismemberment or total loss of use of limbs, vision, speech or hearing.
- Fracture – A benefit is paid out if a fracture of a bone occurs. The benefit is based on the bone fractured, with the more vital areas providing a higher benefit.
Because P.A.G.E. provides for so many different types of coverage under a single policy, it would be impossible to list out sample premiums like we have done in previous product reviews. Instead, we can compare each individual type of coverage to other insurance companies in Canada.
A quick comparison of the critical illness portion of P.A.G.E. shows that it is between the lowest and highest prices in Canada. The same can be said for the life insurance portion. On the other hand, disability insurance is somewhat different on many levels. For one, since the probability for disability is highly correlated to the occupation, premiums depend on a classification system of occupations produced by insurance companies. The safer and less risky the occupation, the lower the premium, and vice versa. With P.A.G.E., it does not give you the chance to change occupation class. In this case, your premium doesn’t depend on your occupation, so physicians and lawyers don’t benefit from lower premiums and construction workers aren’t punished with higher premiums. Instead, everybody pays the same. In order to make a profit, Humania will base the premium on a riskier occupation class. It’s similar to how mortgage life insurance is priced. With mortgage life insurance, since the creditor does not know the applicant too well (only a few questions were asked on the application), they will charge a higher premium to make up for the chance that less than healthy people are applying. In order to receive a fair premium, much more information has to be gathered by the insurance company to determine the risk of the applicant. With the disability insurance portion of P.A.G.E., since the occupational information is lacking, Humania will charge a higher premium to make up for the chance that many people in risky occupations may be applying.
Secondly, there are several distinct disability insurance products in Canada which depends on the renewal arrangement. The best products for consumers are the non-cancellable policies. These cannot be cancelled by insurers nor can their premium be increased due to increased disability experience. Because of these benefits, non-cancellable policies are also the most expensive. The other type, known as guaranteed renewable, also cannot be cancelled by insurers, but can have its premium increased. More risk is shifted to the insured, and therefore premiums are less costly. P.A.G.E. features guaranteed renewable disability insurance.
P.A.G.E. features two types of return of premium riders: return of premium at age 65 or after 15 years. If total disability as a result of an accident is chosen, 50-100% of the premium will be refunded at age 65 or after 15 years if no claim has been made. The exact amount depends on the age the policy was issued. For premium refund at age 65 rider, clients 45 and under will receive 100% of the premiums, clients 46-50 will receive 75% and clients 51-55 will receive 50%. For the premium refund after 15 years option, 75% of the premiums will be refund.
Suitability of P.A.G.E.
Humania’s P.A.G.E. fits many needs, and can be considered the ultimate all-in-one policy. The level of customization is unrivaled in the Canadian marketplace. You can adjust the amount of insurance for each type of coverage. Things like hospitalization and fracture benefits are low cost options that should ease your mind when you know that cash flow will be tight when accidents or illnesses occur. Even though premiums depend on the amounts and types of coverage chosen, it’s reassuring to know that pricing for the individual portions of the policies are competitive, especially for critical illness and life insurance.
The product is not without drawbacks, as mentioned in the section about disability insurance above. Also, the life insurance maximum of $25,000 is also a limitation and isn’t enough for income replacement or to pay off the mortgage. If you’re looking for a more comprehensive solution to your disability and life insurance needs, an individual policy would serve you best. For instance, an individual disability insurance policy can be non-cancellable and designed with riders that increase the monthly benefit at the pace of inflation over the course of a long-term disability.
A drawback, which is not the fault of P.A.G.E., is analysis paralysis, which is what happens when one is presented with too many options. If you’re considering P.A.G.E., try to narrow down your focus to the types of coverage that is mandatory to you. If you need help, talk to a professional insurance advisor working in your best interest for a second opinion.
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