What's going on in Individual Insurance and Investment

In this issue:

• Critical illness insurance | New documents to enhance your service offer
• Critical Illness Insurance | A friendly letter to remind clients
• Updated illustrations | For clients with a Protector product
• Third-party contribution | RRSP and TFSA
• E‑application: Best practices for wisely use of the Special instructions box!

CRITICAL ILLNESS INSURANCE | NEW DOCUMENTS TO ENHANCE YOUR SERVICE OFFER

You now have access to new documents that are written in simple language and offer concrete examples. They're a valuable resource to help you and your clients understand our critical illness product lineup.

3 new documents

We want clients to be well informed about the coverage you offer. That's why we're providing you with these 3 new documents:

• Health priorities guide – 23134E
• Health priorities guide for children – 23135E
• Life with Critical illness guide – 23136E 

Written in simple language, these documents offer detailed explanations on things like illnesses for which there will be a partial or total payment when there's a claim, benefits and additional coverage options, and the different periods associated with a claim (moratorium, survival and qualification).

We've added a warning to our brochures about critical illness diagnoses that don't entitle clients to a claim:

Note: Being diagnosed with a critical illness by your doctor doesn't automatically entitle you to a benefit payment. According to the contract definitions of some illnesses, only severe cases may be covered. The benefits will be paid if your diagnosis corresponds to the contract definitions.

These documents are important to help you understand the product better. We encourage you to give them to your clients when offering critical illness insurance.

Questions?

Contact your Desjardins Insurance regional sales director.

CRITICAL ILLNESS INSURANCE | A FRIENDLY LETTER TO REMIND CLIENTS

We want our clients to get the most out of their insurance. We want to do more to support our clients, so we're implementing best practices to remind them of the critical illness coverage they have—and in some cases, they've had the coverage for several years.

Since July 10, 2023, a new letter is sent out periodically to all policyowners who have taken out critical illness insurance. In addition to reminding them of their insurance, this letter will tell them about the benefits they'll be able to get in a timely manner, when they need them.

Because your clients' needs are constantly changing, we encourage them to review their coverage from time to time, if needed.

As a financial security advisor, you're the trusted contact person. This means you might get a call about this letter. Here's some useful information to help you answer your clients' questions.

Letter sent every 5 years

We'll send this new letter to your clients every 5 years—on their 5th, 10th and 15th policy anniversaries, and so on. For example, a policyowner who has had critical illness coverage since 2003 will receive their first letter this year, on their 20th policy anniversary.

This letter will be sent out 60 days before the policy anniversary.

Content and overview of the letter

The letter will be personalized based on coverage held and eligibility for options, which change over time. Where applicable, the letter will summarize information about:

• Return of premiums on cancellation or expiration
• Return of premiums upon death
• Conversion option
• Exchange option

See our sample letter with all the options available. 

A copy of the personalized letter will be available in Client Documents on Webi. The content is general in nature, so you're not required to contact the policyowner after the letter is sent. To reduce paper consumption, you won't receive a copy of the letter.

Questions?

Call our Client Relations Centre: 1‑800‑278‑0669

UPDATED ILLUSTRATIONS | FOR CLIENTS WITH A PROTECTOR PRODUCT

Last April, we announced some changes to the dividend scale for participating life insurance policies. These changes will raise dividends for policies that came into force before 2017.

Protector products are the most popular policies in our participating life insurance portfolio, and the changes to the dividend scale have a positive impact on most clients. We want to make sure you have everything you need to present your clients with projections that reflect these changes.

That's why we're providing you with updated illustrations so you don't have to ask for them one‑by‑one. New illustrations for Protector policies will be available in Client Documents during the week of July 17, 2023.

Exclusion

Unfortunately, we were unable to automate some illustrations, most of which were for policies with a policy loan.

If you can't find the illustration you're looking for in Client Documents, or if you need something for a different scenario, email Expertise_Portefeuille_Backbook@dsf.ca.

Questions?

Call our Client Relations Centre: 1‑800‑278‑0669

THIRD-PARTY CONTRIBUTION | RRSP AND TFSA

Contributions allowed in an RRSP or a TFSA are overseen by the Canada Revenue Agency (CRA), and according to their rules, only the owner can contribute.

Indeed, the CRA does not allow other types of transaction as it is against the conditions of a RRSP and a TFSA as described in the Income Tax Act, and it also exposes clients to tax risk.

The only exception allowed is a contribution made by the owner’s employer.

What are the tax risks for the clients?

• Rejection of the tax deduction that is linked to the RRSP contribution
• Taxation applied to the contributor’s income instead of the annuitant’s for the RRSP redemption, according to contribution rules
• Requalification of the plan from individual RRSP to Spousal RRSP
• Deregistration of the RRSP or the TFSA

The Third‑party contribution form was updated and should now be used in the following situations:

• Contributions by the owner’s employer
• Contributions come from a bank account belonging to someone other than the owner for their non-registered plan

If a contributor wants to contribute to an owner’s RRSP or TFSA, the money should be transferred to the owner’s bank account for them to invest in the RRSP or the TFSA.

Questions?

Call our Client Relations Centre: 1‑877‑647‑5435
Annuities: savings@dfs.ca
GIF: gifclientservice@dfs.ca

E-APPLICATION: BEST PRACTICES FOR WISELY USE OF THE SPECIAL INSTRUCTIONS BOX!

Here are some best practices for using the Special instructions field in the Payment and premium section of the e‑application wisely, which will optimize your work and your clients' experience.

 Find out now and save time!

Learn more