Insurance essentials

• QuestionWhat is "Why insurance: managing risk"?Tap to revealAnswerInsurance transfers risks too big to self-fund — sell from need and dependents, not from a product.
• QuestionIn "Why insurance: managing risk", explain:Tap to revealAnswerInsurance transfers a risk too big to self-insure, for a predictable premium.
• QuestionIn "Why insurance: managing risk", explain:Tap to revealAnswerStart from need and dependents, not from a product.
• QuestionIn "Why insurance: managing risk", explain:Tap to revealAnswerIncome protection (disability) is often overlooked but central.
• QuestionIn "Why insurance: managing risk", explain:Tap to revealAnswerFrame it as protection/continuity, not an investment expected to pay off.
• QuestionWhat is "Life insurance: term vs permanent"?Tap to revealAnswerTerm covers temporary needs cheaply; permanent covers lifelong needs and builds cash value — match the product to the need's duration.
• QuestionIn "Life insurance: term vs permanent", explain:Tap to revealAnswerTerm: covers a set period, low premium, no cash value — for temporary needs.
• QuestionIn "Life insurance: term vs permanent", explain:Tap to revealAnswerPermanent (whole/universal): lifelong cover, builds cash value, higher premium.
• QuestionIn "Life insurance: term vs permanent", explain:Tap to revealAnswerPermanent fits estate/legacy/business needs, not every client.
• QuestionIn "Life insurance: term vs permanent", explain:Tap to revealAnswerMatch product to whether the need is temporary or lifelong.
• QuestionWhat is "Living benefits: disability and critical illness"?Tap to revealAnswerDisability replaces lost income; critical illness pays a lump sum on diagnosis — and the definitions decide whether claims pay.
• QuestionIn "Living benefits: disability and critical illness", explain:Tap to revealAnswerDisability insurance replaces income when the client can't work.
• QuestionIn "Living benefits: disability and critical illness", explain:Tap to revealAnswerWatch the elimination period, benefit period, and disability definition (own vs any occupation).
• QuestionIn "Living benefits: disability and critical illness", explain:Tap to revealAnswerCritical illness pays a tax-free lump sum on diagnosis, regardless of work status.
• QuestionIn "Living benefits: disability and critical illness", explain:Tap to revealAnswerThese complete the protection picture; be precise on definitions and exclusions.
• QuestionWhat is "Annuities and segregated funds"?Tap to revealAnswerAnnuities buy guaranteed income; segregated funds add insurance guarantees to investing — both trade cost or flexibility for certainty.
• QuestionIn "Annuities and segregated funds", explain:Tap to revealAnswerAnnuities turn a lump sum into guaranteed income, addressing longevity risk (less flexibility).
• QuestionIn "Annuities and segregated funds", explain:Tap to revealAnswerSegregated funds wrap an investment portfolio in insurance guarantees.
• QuestionIn "Annuities and segregated funds", explain:Tap to revealAnswerSeg-fund features: maturity/death guarantees, potential creditor protection, probate bypass.
• QuestionIn "Annuities and segregated funds", explain:Tap to revealAnswerThose guarantees cost more (higher MER) — recommend when the protection genuinely matters.

1. 1Diagnose the protection gap before the product

   Analyse~20 min

   For a 32-year-old single income-earner with no dependents but large student debt, list the protection risks in priority order and name which product addresses each — without defaulting to life insurance.

   Done when: Disability/income protection is correctly prioritized, each risk maps to a product, and the rationale is need-first.

   Re-read the source concept

Why this matters. Reading + quizzing prove recall; applying it in a real situation is the only evidence of transfer. Treat at least one of these as non-negotiable before you move on.