Affording a decent living in towards world seems like a luxurious statement. Financial preparedness in terms of life insurance is yet to be taken seriously by many of the working class families. With inflation and interest rates steadily increasing, it has become imperative that nuclear families re-examine their life insurance policy options.
The Canadian digital life insurance policy firm PolicyMe estimates that life is fragile in the modern world and earning members of the family must invest in economic security. Accidents and deaths do not come with forewarning and hence it is important to protect the interests and future financial goals of the loved ones. Co-founder and CEO Andrew Ostro further affirms these views by stating that, “Most of the families in Canada still rely on work benefits rather than a solid life insurance plan. This however is not sufficient for the present conditions and standard of living.” “There is already enough pressure on the sole provider of any household when it comes to increasing food and energy costs. And when a family loses its only earning member, things start to look bleak.” This is where people don’t understand life insurance and feel it will be a misjudged decision. ‘
PolicyMe continued to investigate this phenomenon and found staggering figures that highlight the disparity between the working class when it comes to life insurance policy measures. It has estimated that employees aged between 30-50 do have additional covering. More than 70% of them have six months or fewer saving in their bank accounts to fall back on in case of any financial emergency. And among them one in three have only a month’s savings to suffice their lifestyle expenses.
How Does Housing Costs Effects Life Insurance Decisions?
Co-founder and CEO Andrew Ostro further states that, “The millennial parents ascertain that investing in a life insurance policy is relatively expensive. On the other hand it is financially independent to be spending less than a dollar per day to keep one’s family secure from future calamities. ” “Individuals who are burdened by loan repayments and working on a tight budget, especially need to reconsider their financial goals.”
It will take quite a lot of convincing on digital insurance firms like PolicyMe to persuade homeowners into investing in a feasible life insurance. It has been noted that parents without children are getting down their cost of living. According to a survey published by 2022 Canadians and Money survey, almost thirds of homeowners are burdened with rising interest rates and higher mortgage.
In the end, as the interest rates soar Canadian homeowners and working class have to make a choice about investing in the right life insurance policy to enjoy a stress free living.
The SGI has Announced a $100 Rebate on Registered Vehicles
The Saskatchewan Government Insurance has introduced a welcoming gesture of a $100 rebate for registered vehicles from the 9th of March, 2022. This decision has been applied to all classes of registered motorcycles, private, commercial and agricultural based auto vehicles. However, it excludes the owners of trailers and snowmobiles. The rebate of $100 will be offered from the auto fund, this has been the second year since the SGI has issued rebate cheques. It has been noted that in the year 2021 registered auto vehicle owners received a total of $ 285 per vehicle as a rebate.
SGI minister Don Morgan has claimed, “The rebate has been possible due to high investment returns in rate stabilization reserves and lower injury claims being reported.” He further stated that, “The rate stabilization reserves acts like a rainy day fund for customers who might experience a sudden inflation in insurance. Since the vehicle owners are already facing high fuel costs it is imperative that they benefit equally, no matter what kind of vehicle they own or premium they pay.”
SGI estimates the total cost of rebate this year to a round figure of $95 million. During the coming weeks it will disburse more than 700,000 rebate cheques to its customers. All the vehicle owners are set to receive one cheque for their total registered vehicles.
Are Homeowners Hiding their Tenant Information from Insurance Companies?
The industry talk according to RatesDotCa and BNN Bloomberg has been that current homeowners in Canada have been hiding the fact they have rented a part of their home to tenants. Survey estimates have revealed that nearly 42% of the 1,511 Canadian homeowners interviewed haven’t informed their insurance companies about renting out an entire floor or parts of their home to tenants. Another 11% state that they do not know the procedure or simply refused to answer the question. Only 47% of the homeowners have made it mandatory to include their insurance companies when it comes to renting out their place.
John Shmuel, the managing director of RatesDotCa informed the press that there could be serious consequences when home owners skip this procedure. “It is great to rent out your place in order to ease out financial burdens. Especially when the interest rates and mortgage rates are getting costlier by the minute. This could also mean extra income for many of the families that are struggling to hold onto their budget strings. But it comes with grim results like paying for damages that are unforeseeable.”
The IBC (Insurance Bureau of Canada) states that any homeowners renting out a private space, a floor, a room or series of rooms to a tenant come with a premium increase in the liability portion of the insurance policy. This, however depends on the various insurance companies and their terms, it is best advisable for the homeowners to request their tenants to apply for their own policy during such circumstances.
It has been noted that 24% of Canadian homeowners are ignorant when it comes to reporting this matter to their insurance agents or companies. About one-quarter of them are not even aware that they need to inform their tenants to register their own insurance policy while boarding a space for a limited time period.
Since the beginning of the global pandemic, fewer owners have invested in leasing their premises. Only 6% of all home owners in Canada are interested in having a tenant in their personal space, compared to 5% prior to the pandemic. Most of them have listed their properties on commercial sites like Airbnb to add extra income benefits from international travelers. This however, includes a separate policy of additional insurance on their standard homeowner insurance policy.
IBC has conducted a survey which has estimated that insurance claims against property have increased to an all time high of 33.9% from the year 2010 to 2020. RatesDotCa has backed these figures by conducting their own market survey with Canadian homeowners.
IBC further warns, “A home insurance policy covers only the property, personal responsibilities and contents of the lawful owner. It also covers family members of landlords, but is not responsible for damage caused to tenants. In case of an accident or fire that destroys the tenant’s personal belongings or causes injury, the landlord will be held liable for compensation.”
Therefore, it is wise to come clean about homeownership while investing in a home insurance policy.