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Learn more about Underwriting ExpertsTM to understand how we are able to make a difference for your clients, by securing them the underwriting they are unable to obtain elsewhere.
Question: Who is Underwriting Experts?
Answer: Underwriting Experts was established as a division of Oliver Financial to manage the administrative process associated with underwriting Life Insurance difficult cases. Our team of experts, working directly with the life insurance companies, oversees the entire underwriting process from initial application to final negotiation and settlement. On your behalf, we work to obtain an offer for your client that you wouldn't be able to get elsewhere.
Question: How Does The Process Work?
Answer: As your corporate partner, we will work with you to review the initial application from your client and provide you with preliminary underwriting advice for any possible candidates. Once we have determined viability, at your request, we will then proceed to negotiate the offer with any number of insurance companies who will entertain the application. Once we receive an offer, we will then provide you with details for presentation to your client.
Question: Is there a cost to the service?
Answer: Yes and no. As we initially require the client's medical records to proceed with the application, and the physicians charge for their time and courier costs, there is an initial cost for this amount upfront. This cost is the responsibility of the agent or the client.
Question: Who owns the client?
Answer: Technically, the agent who refers the case still "owns" the client, as he/she handles the client throughout the process and afterward. We do not deal with the client directly under any circumstances unless requested by the referring agent. Once we place the case, however, it must be understood that the referring agent will not be the agent of record on the policy as he/she will probably not be contracted with the preferred carrier and not have the legal licenses to to business in different jurisdictions.
Question: What is the compensation?
Answer: The total compensation on a specific case will be shared between UE and the sourcing agent. However, the portion paid to the sourcing agent will increase with the size of the premium for the life insurance policy.
Question: Are premiums due in US funds?
Answer: Yes. Let's not forget that the owner or beneficiary will also benefit from values or death benefits also denominated in US currency. Therefore, from this standpoint, we are matching "apples with apples".
Question: Do we need to open a trust account when coverage amounts are substantial?
Answer: Not necessarily. We will certainly advise you when a Trust account would be highly desirable to hold the policy. For example, if your client gets a great offer from a US carrier, as opposed to some Europeans carriers we deal with, and the Insurance coverage exceeds a certain threshold, a portion of the insurance proceed may be subject to US estate tax. There is a tax exemption amount before an estate tax kicks in. In these instances, setting up a trust may be more tax efficient. The trust would be owner, beneficiary and premium payor of the policy and its benefits will far outweigh the cost to set up the trust. The owner of the trust would be decided by the insured or a related party. The beneficiary of the trust would normally be the spouse or business partner of the life insured. When a death occurs, the death benefit proceeds would be payable to the trust first. Then the trustee would pay the death benefit directly to the beneficiary of the trust; that is your client's spouse or business partner.
Question: Is this legal? Can a Canadian resident buy insurance from a US Insurance Company?
Answer: Yes. The US and international market is open to any Canadian who is interested in purchasing Insurance through a licensed and contracted insurance broker from that jurisdiction. There are, however, some Insurance Companies which do not want to issue policies to Canadian residents. As such, we do not deal with those companies when we are looking for offers for a Canadian client. In addition, certain products are not available to Canadians for legal and tax purposes and, subsequently, we will not assist you in purchasing these products fro your Canadian clients.
Question: I noticed that some of the insurance companies you deal with do business in Canada while others are US divisions owned by Canadian Insurance Companis. Why would you consider a case differently if it were already rated sub-standard in Canada?
Answer: Although some companies are affiliated, they actually operate as totally different entities with respect to underwriting. In addition, with regards to the process, because there are more competitive pressures in the US, the underwriting is generally more liberal. With regards to the underwriters themselves, those in the US tend to be more sophisticated and work with the entire medical file, as opposed to their Canadian counterparts who begin their review with an APS. In addition, the reinsurance contracts, pricing assumptions, products and many other factors also have an impact on how underwriters deal with the applications submitted to them.
Question: Why is the premium normally cheaper with an American insurer?
Answer: The premium is normally cheaper for many reasons including a more competitive landscape, cheaper Reinsurance terms, product pricing considerations, economy of scale, the total compensation level, regulatory environment including the amount of reserve and surplus contribution required for each policy, just to name a few.
Question: As an American policy, is the death benefit taxable?
Answer: Setting aside the issue of estate tax in the U.S. for the moment, the proceeds are normally paid tax free to a Canadian beneficiary just as it is the case with a death benefit paid by a Canadian Insurance company.
Question: When a CCPC is beneficiary of the insurance policy, upon death of the insured, is the Proceed eligible for CDA favorable treatment?
Answer: Absolutely. The total insurance proceed minus the ACB (adjusted cost basis) of the policy will go the Capital Dividend Account of any Canadian Controlled Private Corporation that are eligible for the favorable treatment.
Question: With the strength of the American economy questionable, how do you know that the companies you deal with are financially stable? What, if any, due diligence have you done to determine their financial strength and investment portfolio?
Answer: Like many other companies operating in the financial sector during this recession, Underwriting Experts has done their due diligence to determine that our corporate partners are credible and financially stable. Our team regularly studies and analyzes interim financial statements and investment portfolios of each carrier we deal with. In addition, we religiously subscribe to rating agencies services and also receive updates from many regulatory goverment entities at the state level.
Do you have other questions? If so, please feel free to contact us, now!
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Learn about new underwriting programs designed to cover individuals who were previously uninsurable... We explain everything in terms you can understand.
Consultations are FREE... contact us, today!
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