Life Insurance in Canada

After last year collapse, American International Group (AIG) shares are on the bottom (value decline from $55 to $1.2 in one year). What does it mean for clients of AIG Life of Canada? Are there serious reasons to concern about their policy safety?

Nothing special, for three reasons:

1. AIG Life of Canada was recently bought by Bank of Montreal for $375 million in cash. This bank with its $416 billion in assets represent solid and respectable partner, who guarantees you security.

2. AIG Life of Canada wasn’t financially connected to AIG. Both companies were doing independent business, with own assets, on different markets. AIG suffered large loss related to housing market collapse in the US. AIG Life of Canada hasn’t experienced such problems, due to different investment structure.

3.Insurance policies in Canada are backed by Assuris, which protects Canadian policyholders (100% up to $200000, then 85% of the original face amount or $200,000). This protection covers not only life insurance policies, but also disability insurance policies and other. Assuris proved its function three times in Canadian history.

Everybody should be careful and protective, when talking about personal finance. On the other hand, cancelling your existing AIG life insurance policy may cause you lot of expenses, which should be deeply considered!

If you are not sure to decide whether leave your AIG policy or not, ask independent broker, who is not bounded to any company and has the best motivation to help YOU!

I don’t have to remind you, how dangerous times for investment we are living in these months. Stock markets collapsed and buried eight years of growth. Real estate prices are falling down.

More, interest rate after the recent cut by Bank of Canada down to 50-years low value of 1.5% means your money in banks are making less than the inflation rate takes, because inflation in Canada is around 2%.

And we can expect $4 billion spending soon, due to government’s commitment to participate on the North America car industry bailout. This can get the inflation rate even higher, due to bigger government spending. Interest rate can hardly go higher in upcoming months, because FED cut the interest rate even lower - near the 0% value and the Bank of Canada is usually following FED’s steps.

So is there any risk free solution with guaranteed growth over the inflation rate? Yes, there is. Some Canada life insurance universal policies offer 4% guaranteed growth. How is this possible? Easily, these products offer festure you can find anywhere else. It’s name is tax shelter, which is not influenced by the financial market!