From time to time, Canadian life insurance applicants are unable to obtain a life insurance offer from a Canadian insurer. A possible solution is to approach the U.S. life insurance market for an offer.
The U.S. market is significantly larger and more competitive, and will often make offers when none are forthcoming from the Canadian market.
The process for a Canadian to acquire a life insurance policy from a U.S. insurer is involved and typically requires the creation of a U.S. trust to hire a U.S. broker to help acquire the policy and then distribute it from the trust to the Canadian beneficiary.
Westward’s Performance Optimizer manages life insurance plans for several clients who own life insurance policies issued by U.S. insurers. This Viewpoint summarizes the current financial strength ratings of our clients’ U.S. insurers.
The opinions expressed in this memorandum are strictly those of Westward Advisors Ltd. This memorandum is for information purposes only and is not legal or tax advice.
The above financial strength ratings assess an insurer's ability to meet its obligations to policyholders by three well-known rating agencies. The rating process involves quantitative and qualitative reviews of a company's balance sheet, operating performance and business profile, including comparisons to peers and several other factors. All insurer ratings remained the same over Q2 2018.
A.M. Best: Companies rated from B+ (good) through A++ (superior) are considered to be “secure.” A.M. Best rating definitions.
Moody’s: Companies rated from A (upper medium grade) through Aaa (highest quality) are considered “low credit risk.” A modifier of 1 indicates the higher end of a category, and a 3 indicates the lower end of a category. Moody's rating definitions.
Standard & Poor’s: Companies rated AAA, AA, A, or BBB have respectively “extremely strong,” “very strong,” “strong” or "adequate" capacity to meet financial commitments. A modifier of plus (+) or minus (-) shows the relative standing within the rating categories. Standard & Poor's rating definitions.