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Glossary of Terms Insurance Solutions

Life Insurance

Beneficiary : A person who derives some benefit, whether money or property, from the will of a deceased person or from a trust. Can also be a beneficiary named under a life insurance policy, pension plan or RRSP.

Will : A legal instrument that sets out, in writing, the testator's intention regarding his or her estate and takes effect upon his or her death.

Underwriting : The procedure of evaluating an applicant, in this case for personal insurance. If an individual does not meet certain medical evaluation criteria for his or her age, the policy applied for may not be approved by the insurance company. The case must be approved medically, financially and morally by the life insurance company.

Convertibility : The convertibility option gives the policy owner the right to convert the term insurance to some other form of insurance issued by the same insurance company, usually permanent coverage, for the same or lesser amount of insurance coverage without having to prove evidence of continued insurability for the life insured.

Limited - Pay : A limited - payment policy is a policy with a premium - payment period condensed to a specific number of years or a specific age, such as the policy owner's planned retirement age.

Level - Cost : Level cost premiums are premiums that are the same each year, even though the actual cost of life insurance protection increases from year to year.     

Level - Death Benefits: The amount of death benefits remains constant for the life of the contract.

Cash Surrender Value : The cash surrender value, or non-forfeiture value, of a permanent life insurance
policy is the amount of money that will be paid to a policy owner who surrenders his or her policy at any given point in time.

Disability Insurance

Occupational Class : Applicants for disability insurance are categorized by the insurer into occupational
classes, based primarily upon the nature of the duties of the applicant's job. This is where the relative risk of incurring work-related disabilities comes into play.

Own Occupation : This is the most liberal definition of disability and, as such, is the most expensive
with respect to premiums. Under own occupation the insured is disabled if he or she is unable to perform the duties of his or her ordinary occupation and is under the care of a doctor.

Elimination Period : Also called the waiting period under a disability insurance policy. This is the period
of time that must elapse between the onset of disability and the start of disability benefits under the contract.

Recurrent Disability : This deals with whether or not two successive periods of disability are considered
to be one for the purpose of calculating the waiting and benefit periods. Basically, if someone receives benefits for the same physical condition within the last six months, then it is considered the same illness  and the waiting period is waived.

Future Income Option : This is known as the FIO as well. Many disability insurance policies offer their
policy owners a future purchase option, at an additional premium, allowing them to periodically increase their level of coverage without having to provide medical evidence of insurability.

Partial Disability : When you are not totally disabled but that both of the following apply due to accident or illness, depending on the benefit you have selected.                    

  • You are unable to perform one or more of the major duties of your occupation.
  • You are unable to work more than half the normal required hours per week and you are under the continuous care and treatment of a physician.

Critical Illness Insurance

Second Event : If you have received a critical illness benefit for heart attack, life - threatening cancer or stroke before your 65th birthday, this rider will provide a limited amount of critical illness coverage for a specified second event with no medical evidence required.

Disability Waiver of Premium : If you become totally disabled for a period of 90 consecutive days prior to age 60, the insurer will waive the premium payments under the policy while total disability continues.

Return of Premium at Death : Upon your death from any cause, the owner if living or the owner's estate
will receive a return of premium benefit of 100% of the eligible premium collected since the effective date of this rider to the date of death. Maximum return is $2,000,000. This holds true if the critical illness benefit has
not been paid out due to a claim.

Best Doctors : Best Doctors is one of the world's pre-eminent independent authorities of healthcare, conducting peer-based physician evaluations in more than 40 specialties around the world. Best Doctors
gathers up to 2.5 million evaluations each year through telephone interviews and proprietary polling. Only approximately 5% of doctors in any country are selected as the "best" by their peers.

View all of the definitions of each critical illness from one of the insurance carriers

Long Term Care Insurance

Facility Care : This coverage provides the insured under a Long Term Care contract with the resources
to afford the cost of a Long Term Care Facility.

Home Care : The home care is an optional benefit on most Long Term Care policies. This optional
benefit reimburses the insured's cost of medically necessary home care services.

Activities of Daily Living : Bathing, Dressing, Toileting, Bladder and Bowel continence, Transferring and

Health & Dental Insurance

Preventative Dental Care :

  • Examinations and diagnostic services
  • X-rays
  • Laboratory tests and examinations
  • Preventive services
  • Space maintainers

Basic Dental Care :

  • Removal of erupted teeth (uncomplicated surgery)
  • Restorative services
  • Endodontics
  • Periodontics
  • Removable prosthesis (adjustment, rebasing)
  • Oral surgery
  • Anesthesia
  • Temporary dressing of emergency pain relief
  • Finishing restorations


Money Market : This is a market for short-term debt securities, that is, for instruments that mature within one year.

Margin Account : An investor borrows part of the purchase price from the broker and pays the rest in equity. In exchange for lending the money to the client, the broker keeps the securities as collateral and also charges interest on the loan.

Annuity : Usually when we refer to an annuity, we think of a person who receives a pension cheque
each month. The person is the annuitant.

Immediate Annuity : This is a periodic income generated by a fixed amount. It is a benefit paid at set
periods in exchange for the disposal of a total amount made up of a series of contributions or a lump sum.

Deferred Annuity : Allows for the accumulation of an amount through guaranteed or variable periodic payments at the choice of investor.

Life Annuity : Payments on this type of annuity are guaranteed up to the death of the annuitant.

Annuity Certain : Type of annuity that is paid during a period guaranteed in the contract, whether or not
the annuitant is still living.

Annuitant : The person whose life the annuity is contracted.

RRSP : Registered Retirement Savings Plan. It is a taxation regime that makes possible the accumulation
of savings that are sheltered from tax until the disposal of such savings.

Personal Financial Planning

Trust : A written and formal agreement that enables a person or institution to hold property and manage it for the benefit of identified beneficiaries in accordance with instructions in the trust agreement.

Executor : Person or institution named in a will to carry out its provisions and instructions.

Estate Planning : Orderly arrangement of assets and a plan for conveying them to heirs and other
beneficiaries in a manner normally calculated to minimize taxes, expenses and delays.

Estate Freeze : The process of locking in the amount of capital gain attributable to the current owner of
property and shifting future gain to another tax payer.

Crystallization : Causing a disposition of a capital asset so as to trigger the realization of capital gains
in order to fix the amount of gain that is taxed to the taxpayer at a given point of time.

Family Patrimony : Civil Law Patrimony in Quebec applies to legally married and civil union spouses. It is
subject to division of its value as a result of death or the breakdown of marriage or civil union. The Family Patrimony includes all residences, household furniture, motor vehicles used by the family. Except in case of death it will also include rights accrued in a retirement plan and earnings registered during marriage or civil union from QPP. Family Patrimony will apply regardless of the matrimonial regime.

Life Insurance
Disability / Salary Insurance
Critical Illness Insurance
Long Term Care Insurance
Health & Dental Insurance
Personal Financial Planning