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									                                                                                             Strategies for advisors from advisors

                                         By Bruce Cumming

                                        FINAL DECISIONS
                                        A new insurance-funded solution lets advisors ensure
                                        their clients’ final wishes are carried out.

                                When completing insurance appli-
                                cations for clients, it’s often necessary to
                                address touchy subjects—sometimes hitting
                                on potentially embarrassing issues such as
                                clients’ spending habits, their medical his-
                                tories and even the quality of their mar-
                                riages. But it’s a process that’s critical if we
                                are to help people effectively plan for their
                                financial futures.
                                   Which raises the question: Are there any
                                topics you should never discuss with your
                                clients? Back when I started my practice, one
                                subject I swore I’d never broach was funeral
                                planning. Talking shop about wills and pow-
                                ers of attorney, including dying-with-
                                dignity provisions, was never a problem.
                                However, I drew the line when it came
                                to discussing types of caskets desired or
                                preferred musical selections.                                     removing some of our potential pangs of embarrassment.
                                   But I soon reached the conclusion that these subjects should   Everest Canada (www.everestfuneral.ca) is offering a com-
                                be talked about because it’s during these emotional family        prehensive funeral planning service that is available in all
                                times that a lot of purchasing power is revealed. Aside from      provinces except Quebec, Newfoundland and Prince Edward
                                the regulars—tax and estate planning, family planning, and        Island. Everest isn’t an insurance company or financial serv-
                                business succession planning—I’ve come to the opinion that        ices provider, but rather an independent consumer advocate
                                funeral planning should be the final subject discussed under      that provides the planning services through advisor firms. All
                                the Estate Planning banner in a client’s binder.                  client contacts are handled by telephone.
                                   When people pass away, their families are confronted with         With this service, after discussing how the client’s wills and
                                a myriad of decisions that must be made quickly and often         powers of attorney should be designed, I can then confidently
                                irrevocably. It’s said a wedding requires people to make 100      bring up the subject of funeral planning as the natural con-
Illustration by Sandy Nichols

                                decisions, but they’re spaced out over the course of a year or    clusion to the “end-of-life issues” topic. I stress to the client
                                longer. When someone dies, a similar number of decisions          that although this is a deeply personal subject, it’s also fraught
                                must be made but the time frame is compressed into a few          with problems for the family members if left unplanned.
                                days, or at most, a week.                                         Many personal development coaches ask people to think
                                   Fortunately, there’s a new service emerging that can           about what their obituaries would look like if written today.
                                help advisors address this very issue, while at the same time                                                        Continued on page 10

                                www.advisor.ca                                                                                      ADVISOR’S EDGE   |   APRIL 2006    9
Continued from page 9                         such as cemeteries and monument or           cremation over traditional burial. Those
I take it a step further by turning the       memorial suppliers.                          intending a more elaborate funeral
question around and asking clients,              Everest’s payment policy and services     would be able to purchase a policy with
“What would your funeral look like?           are rather unique. The client buys a per-    a larger face value. The actual cost of
Who would be invited? What hymns              manent life insurance policy, under-         the policy obviously depends upon the
would be sung? Would there be a               written by Winnipeg-based Western            age and smoking status of the client. If
cremation or a burial?”                       Life, for an amount ranging between          one of the spouses is uninsurable or
   Everest’s process is simple. Clients       $5,000 and $10,000. The premium can          older than 81, then he or she can pay a
complete and submit a form to the             be paid monthly or in a single lump          one-time fee of $995 in lieu of pur-
company and an Everest advisor con-           sum. The underwriting requirements are       chasing the policy. However, the other
tacts them directly and welcomes them         simple: You need to have had good            spouse has to be insurable and enrolled
to the program. Clients are sent a pack-      health for the previous five years and       in the Everest plan.
age, including a planning guide which         not have been declined for insurance            A colleague once told me a story
details key decisions to be reviewed and      during that period.                          about a family member diligently can-
completed. This can be done by the               The clients also must not have had        vassing several funeral homes to get
clients themselves or with the help of        any alcohol or drug problems or have         quotes for an elaborate burial. He gave
an Everest advisor over the phone. Dur-       been hospitalized for more than four         exact details, right down to the casket
ing this process, all the funeral decisions   weeks during the past three years. That’s    model number, yet stunningly, the
and details are arranged—right down           the extent of it, but the underwriter        quotes ranged from $10,000 to
to the casket selection and the music.        does place a heavy reliance on the two-      $16,000. This does not appear to be an
The client’s instructions are recorded in     year contestability period.                  isolated case. The U.S.-based Funeral
a “My Wishes” plan, a copy of which              By buying the coverage, the client        Consumers Alliance recently launched
is mailed to the client to distribute to      receives both the services of Everest, as    an antitrust lawsuit against several com-
the family member who will take care          well as the tax-free death benefit to pay    panies, including the Canadian-based
of the funeral. Changes can be made as        for the funeral. The insurance premi-        Alderwoods (formerly Loewen Group),
often as necessary and at no charge.          ums are much higher than term-to-100         that alleges “consumers of funeral
   The second part of the service takes       prices but given the services you receive,   products and services, who are under
place when the client dies. Since the         and the potential savings from having        severe emotional distress and time pres-
Everest documents are kept with the           Everest shop for the best deal, pricing      sure at the time of purchase, have been
will, the executor or other family mem-       shouldn’t be the issue. This is not a        easily and routinely preyed upon.”
ber calls the company, any time of day        reimbursement product and we’re not             That’s certainly not to say all funeral
or night, using a toll-free number, and       trying to augment the client’s other         homes are crooked, but these types of
a representative goes over the same “My       insurance coverage. The deal with Ever-      stories do build the case for having
Wishes” portion with the family. The          est and Western Life simply works out        clients express their final preparation
representative would then provide a           to pay for the funeral. A client, for        wishes, and then have an unbiased third-
spreadsheet of local funeral homes so         example, is going to put about $3,500        party step in and handle the financial
the family can find the best price. If        into premiums to get $5,000 out. That’s      negotiations on behalf of the grieving
requested, they’ll even help negotiate the    not the traditional insurance win, but it    family. It’s a useful tool for advisors who
pricing with the selected funeral home.       does allow the client to essentially pre-    want to help clients plan for the last
   Once the family makes a selection,         pay for his or her funeral and solidify      step.
Everest communicates the client’s             the arrangements beforehand.
wishes directly and continues to serve           The average cost of a Canadian            Bruce Cumming, CFP, R.F.P., CIM, CLU,
as an advocate to ensure each element         funeral is trending down to approxi-         Ch.F.C., RHU, TEP, is the founder of
of the plan is understood and respected.      mately $6,000, according to the              Cumming & Cumming Wealth
They will also help the family to select      National Obituary Service, because           Management Inc. in Oakville, Ont.
other service and product providers,          more and more people are choosing            advisorsedge@rmpublishing.com

10    ADVISOR’S EDGE    |   APRIL 2006                                                                                 www.advisor.ca

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