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- ABOUT INVESTMENTS AND INSURANCES.
As a new immigrant in
Canada, for sure you will find many new things in this country. As
soon as you are settled and have a phone you will receive frequent
phone calls from people or institutions offering you different
services (financial, banking, insurance, long distance phone calls
plans, etc.) or products of different kind and use. The insurance
offer (of any kind) and financial plans in Canada are one of the
most common and aggressive.
The
first things seen by the immigrants arriving to any town or city a
century ago were the towers or church domes and cathedrals. People
of that time built their most important building to adore God and
have a place to pray and feel protected by the divine power.
Nowadays when you arrive to any city or town in
Canada or USA, the tallest and most beautiful buildings are from
insurance companies and financial institutions. In modern life
especially in USA this kind of companies are those which achieve the
highest incomes thanks to the natural psychological need of the
people of having or feeling some protection for the future of their
family life.
Many
are the reasons why the immigrants have doubts and fears of a not
certain future, lack of family and friends, not having a certain or
permanent job, lacking of language, etc. In other words, the
immigrant is possible to be “afraid of what his future is going to
be”.
Insurance companies, banks and financial institutions know very well
the fear of many immigrants who arrive to Canada. They sell the
product which may take their fear away and give security and trust
in their new life in Canada. On the other hand, these
insurance companies will go on increasing their incomes and image
with the money of many immigrants as you.
Insurance companies employ mostly immigrants as their employees to
train them in the selling of their “products” to the new other
immigrants. One reason is the ability they have to communicate with
those persons who speak the same mother tongue language, and other
reason is the trust deriving from client-seller of the same country
or similar culture. These sellers are ready to meet new immigrants
to increase their sales and they are always asking people for
information to find new immigrants.
For
many trained sellers in this business to sell all kind of insurance
to an immigrant is an easy task. First, sellers will flatter them
because of their courage to come to Canada. Then, they will talk
about how wonderful things are here for you and your family. After
that, (following the techniques of their training) they will tell
you the most terrible tragedies and difficult situations they know
by heart. With some terrible stories they will lead you to feel fear
(maybe sadness) that will make you remember that you are in Canada
without any protection before so many evil and dangerous things that
according to the sellers “are seen every day”, like painful
illnesses, fires, earthquakes, etc. But in order to “rescue”
you of
these “possible” tragedies and give you security in Canada, they will
offer you all kind of insurances, like for example life insurance,
insurance against accidents, tragic illness, fires, robberies, etc.
Besides, some companies will also sell you an insurance to protect
you in case the insurance company you hired does not cover the whole
insured sum. For example, most of the car companies do not recognize
the first $500 (deductible) in case of the claims for a car
accident. If the owner has your car damaged for a low cost, he
should pay the first $500, and this makes some customers do not
inform the insurance companies about small accidents. In order to
include this possibility, some insurance companies will offer you
another insurance including this initial deductible of $500.
The
following items are some examples of insurances that are paid in
Canada:
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HOUSE INSURANCE:
When
you buy a house of a flat, according to the law the real state must
be insured against fire, flooding, hurricanes, earthquakes, etc.
●
CREDIT HOUSE INSURANCE: When you buy a house or a flat
with the credit of the bank, the purchaser must have insurance for
the credit he receives. The cost of this insurance depends on the
cost of the real state with relation to the down payment given by
purchaser. For example, if he buys a house of $200,000 and delivers
only $20,000 of down payment (10% down payment), an insurance must
be paid (3%) for the credit of the remaining $180,000. The sum of
$5,400 (% of 180,000) will sum to the credit, and the debt will be
of $185,400.
This
insurance is to “protect” the money of the banks in case the
purchaser is not able to pay the money of the credit and has to sell
it for a less price (depreciation of the real state). The cost of
this insurance lowers if the money of the down payment increases,
and it is not paid when the purchaser gives 30% or more of the total
cost of the real state.
●
HEALTH AND DENTISTRY INSURANCES:
The Canadian health system covers medical and hospital service of
the whole population. However, other services like dentistry,
ophthalmologist, medicines, etc., are not covered by the system. In
order to protect from these eventualities, the insurance companies
offer extra protection in these fields.
NOTE: The new residents in Canada are NOT protected by the Canadian
health system during the first months. It is advisable (not
compulsory) that you buy a private insurance for the members of the
family during that period of time, especially if you arrive in
winter. Fallings in winter are one of the main “not natural death”
causes among Canadian inhabitants.
●
LIFE INSURANCE:
This is one of the most popular insurances among new immigrants in
Canada. Maybe many people have never thought or not even have this
insurance in their country of origin. In Canada , immigrants and
newcomers will be sure candidates (due to psychological conditions) for the
sellers to offer (successfully) this insurance.
● CAR
INSURANCE:
In Canada you must have an insurance of liability against damages to
other persons or properties to be able to drive any motor vehicle.
However, having a car insurance against other issues like for
example robbery, damages, etc., is not compulsory
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IMPORTANT:
The cost of the insurance for people
without driving experience in USA or
Canada
is very expensive. A new driver in Ontario who has
passed the exam successfully and obtained license G-1,
and after that has passed the road exam and obtained
license G-2, will be in conditions of buying his own
vehicle and the corresponding insurance. The cost per
month for insuring your first vehicle can be of $350 and
$450, depending on the type of vehicle, brand, model and
place where you live in. The cost of the insurance also
varies according to the insurance companies, year of the
vehicle, age and experience of the driver, number of
doors, capacity or size of the motor and many other
factors.
However, although its high cost, it is
not easy to find an insurance company which insures new
drivers. For example, some insurance companies (State
Farm Insurance, Grey Power, etc.) prefer to sell
insurances only to persons who have more than 5 years of
experience driving in Canada and who did not have any
accident or claim. |
●
ON CREDIT MERCHANDISE. If you buy some merchandise on credit
(electrical appliances, clothes, cars, ct.) is usual to pay with its
price (and the commercial interest that the shop charges you) the
purchase of an insurance for the sum debt of the merchandise. In
this way the insurance (which is compulsory to have the credit) will
pay the money to the shop in the case you do not pay whatever the
reason. Another insurance that the shops will offer you is against
“lose of job”. If you purchase it, you will pay the monthly fees of
those months in which you would be without any job in the future due
to the lose of the current job. Remember that when you purchase on
credit you have few possibilities (maybe none) to negotiate the
conditions and you will have to sign accepting the imposed
conditions (very small letters) by the seller.
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RECOMMENDATION
In order to attract customers many chain
stores (where you can find electrical appliances,
computers, cars, etc.) promote merchandise with the
advantage of having “1 year without paying or without
any interest”. But most people do not know that when
they make you the bill of the merchandise, apart from
charging the normal taxes (which are never included
in the prices shown), they usually charge you from
8% to 10% approximately of the total of the credit for
the so called “administration fee”, which they will
include in the credit.
Be careful to pay the total of the credit
before the given limit, because if you do not pay the
corresponding day, they will charge you very high
interests of 28% or higher over the credit you still
owe.
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● GUARANTEES.
When you purchase an electrical appliance, vehicle or expensive
article, you will generally be offered to buy extra insurances
(guarantees) to protect your investment. Like for example, if you
purchase a remote control for your TV set for $20 (example), apart
from the usual guarantee of the store (6 months), they will offer
you an additional insurance ($5 to $10) for 1 or 2 years more, just
in case it has a damage which is not covered by the original
guarantee. You decide if it is worth paying more to be sure or “run
the risk” (¿? ) that some something wrong may happen and lose your
investment.
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RECOMMENDATION
As an immigrant you should know it in
advance and be ready to skip these matters. To know
could mean an economical advantage in your monthly
family expenses, especially if you avoid buying
(sometimes under psychological pressure) intangible
products or services that could not be really
compulsory, important or necessary for you.
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