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A client called me earlier this year with a strange question.

He wanted to know if donating an organ or a piece of an organ would affect his ability to purchase life insurance in the future. At the time, it seemed like an academic question and the client didn’t offer any explanations.

But we approached several underwriters to get the answer. We found that as long as there were no complications, and if the recovery was smooth, then an organ donor would not be discriminated against later in life when applying for life insurance. I told the client, made note of the conversation in the file and forgot about it until recently, when he came in for a review.

He finally explained why he’d asked the question. Earlier that year, he donated a piece of his liver to someone who would’ve otherwise died, leaving a wife and young family behind.

As advisors, we’re often in positions to help clients do something remarkable.

The small part I played brought a smile to my face. And it reminded me of a time when I was in need.

I received a kidney transplant in 1979. The donor was a seven-year-old boy who’d been killed in a car accident. During a period of intense grief, his parents saw fit to donate his kidneys to two other people.

Conversation starter

Did you know ontario and B.C. have online organ donor registries?

As a result of their selflessness, I was given a new life, including the ability to have children of my own and help others through my career and volunteering.

So if a client is considering organ donation, let him know his future insurability won’t be affected by an act of kindness.

However, he should protect himself by having the appropriate life insurance in place before the procedure, just in case it goes poorly. Details of the procedure must be disclosed at the time he buys the policy, and some companies may decide not to insure until after the surgery.

And help him review the terms of his disability policy to see if complications from organ donation are excluded from coverage.

Also, although the client is acting nobly, he won’t get a break when it comes time to raise rates. (If insurers were this generous to all charitable clients, it would affect everyone’s rates.)

Still, the benefits outweigh the challenges. And if you think your client may be interested in organ donation after death—she’s mentioned her religion doesn’t prohibit it, or spoken highly of people who’ve donated organs—you can bring up the topic as part of estate planning.

Check the opt-in procedures of your province and share that information with clients. Ontario and B.C. have online organ donor registries, while in Alberta, Quebec, Nova Scotia and P.E.I., the opt-in’s shown on the health card.

3 insurance tips

If you’re discussing life insurance with clients, make sure you cover your bases. Here’s how.

  1. When determining coverage, factor in customary issues like age, health and income.

  2. Include how much the client wants to invest.

  3. Ensure coverage is sufficient to shelter those deposits tax-free (as well as provide protection).

Liked this article? You may also like the Client friendly version. Read it here.

David Wm. Brown, CFP, CLU, Ch.F.C., RHU, TEP, is a member of the MDRT, and a partner at Al G. Brown and Associates in Toronto.

Originally published in Advisor's Edge

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