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Ethics CH#1 Legal Framework Governing Life Insurance - Coggle Diagram
Ethics CH#1
Legal Framework Governing
Life Insurance
Terms
Agent
After passing LLQP we will be called as agents. we can not be called as financial advisors/planners.
Two types
1️⃣ Captive Agents
Only able to work with 1 company
2️⃣ Independent Agents
Can work with multiple companies
Register license with
MGA
- Managing General Agnets
Basics
Capacity
and
Status
of a person
a person of age >16 can purchase a license for him/herself.
Person should not be Drunk, Drugs, incapable when the contract is made.
Power of Attorney (POA)
Document, which empowers someone else on someone's behalf to take Financial, legal decisions/actions.
1️⃣ POA, can purchase insurance (financial decision) for the person - however,
one condition
is that POA cannot decide the beneficary.
2️⃣ POA can carry out changes in the plans, with the
Condition
that they can not change the beneficiary. Beneficiary can only be changes by the person itself, who has the insurance.
3️⃣ Simple POA is time bounded expires automatically, if the person who gave POA, becomes mentally incapable.
4️⃣ Enduring POA - even if the person who give POA, for a particular time becomes mentally incapable, the POA still has the power.
Insurable interest
When one person is purchasing insurance on another person,
then one has to have emotional/financial loss associated with it.
Marriage and
Common Law spouse
1️⃣Married
Legally married
Needs to be Divorced to end relationships
Can ask for spousal support after divorce
What can spouse ask
when getting divorced?
(Family property is anything purchased after marriage, or anything purchased before marriage but the value of the property has increased after marriage).
Can ask for property
division -
Family Property
Two things which
never gets divided
❌Inheritance never gets divided - any parental property received from husband/wife's parents.
❌ If the
husband/wife
is the beneficiary of someone's death benefits e.g. their parent's death, then their divorced spouse can not claim those benefits along with them.
2️⃣Common law spouse
Been living together for more than 1 year.
Needs to be separated to end relationships.
Can ask for spousal support after divorce
🎯
But Can not ask for property division in this case
⭐️In both cases Married and Common Law - husband/wife can
purchase insurances for each other.
⭐️No automatic changes will be applied to insurance policies if in both cases they get divorced/separated.
Will
What is a will?
document that tell use who will be the beneficiary of someone's Estate :warning:(Estate - what someone own's)
Executor?
Will has a name of Executor - who is incharge of their estate.
Executor pays out all the remaining taxes, liabilities from the estate of the dead person who has made a will. Then whatever is left after paying out the expenses is called WILL.
Testate?
Person makes a Testate - valid will
Also called as person died with a will.
If anyone dies
without a will?
Called as
Intestate
Divided based on the provincial rules of
intestacy.
what is
Probate Fee
?
amount charged by the government - towards finding out the person whom to deliver assets, in case when no will (intestacy) is made. Normally it is 1.5% of the value of the estate.
Federal government plans
1️⃣
Canada Pension Plan
CPP
% money you put
for CPP changes
Currently it is 10.5%, but it is variable
CPP can is for all employees/ self
employed people
Max limit
of
amount you can put
Max limit amount is also variable.
Example:
upto
60,000CAD
- 10.5% of all the income.
60K to 100K
- after 60K don't have to put any CPP.
Employee
Half contribution from their pocket.
Because the employer is putting the other half.
Self employee
Full contribution from their own pocket.
Benefits from CPP
From age 65
not fixed - as it depends on how much money they put,
how many years the person has worked in Canada. etc.
The benefits which they gets are
Taxable.
2️⃣ Old Age Security
OAS
Pension to old people is given without any contribution.
If parents comes from India to Canada, and if they are older - they will receive the OAS. but will not receive CPP as they have not worked in Canada.
What is the condition?
Given at age >65
Person should have lived in Canada
for at least 10 years after age 18
It is variable - or it depends on federal gov. to decide how they will provide OAS.
This is also
Taxable
if the person goes back to
India/outside Canada
will also receive pension from OAS
Should have lived >20 years after age 18
Must be of age >65
3️⃣
Guaranteed Income Supplement (
GIS)
What is the condition?
People who are receiving OAS, but still in Low income index.
with all other conditions meeting OAS - like age>65, been in Canada >10 yrs. after age 18.
It depends on
federal gov. to decide
this supplemental income for old aged people - based on low income index.
If income is lower
than low income index
Gets full GIS
If income is bit higher but still lower
than low income index
Gets lesser GIS
If income is above the low income,
if income is in the high income bracket
will not get any GIS
📌This is
Tax Free
benefit
4️⃣
Employment Insurance
(EI)
It is only for employees, not for self employed
% premium is not fixed
Condition?
EI is paid to the employee,
when they looses their job due to the reason which is not in their control.
E.g Laid off, mortality benefits, disability
this is a
Taxable
benefit
Provincial Plans
examples
Healthcare plans
Workers Compensation benefits plan
WCB
No fault automobile insurance
Like in BC its ICBC
Legislations
1️⃣ The Privacy Act
"Privacy act" is for everyone
PIPEDA
Businesses only
Only asking for relevant information
2️⃣Human Rights Code
to control discrimination
Insurance companies
can do discrimination
Only on reasonable
and bonafide grounds
3️⃣ PCMLTFA
Money Laundering
FINTRAC is the organization
to track Suspicious transactions
showing the ID?
Showing the POA?
Cash >10,000 in 24 hrs.
or depositing
100,000 or more
PEFP form needs to be filled
PEFP is Politically exposed foreign person
4️⃣ DNCL
Do not call list
5️⃣ ASL
Anti spam Legislation
emails
needs to include unsubscribe button
<10 days person shall be removed.