To our valued Clients and Prospective Clients:
As a client or potential client of Ideal Benefits, we feel that it is important that you understand how we operate our business.
Agents and brokers in the life insurance industry (including employee benefits) in Canada are compensated by commissions, bonuses and other inducements, from the companies we do business with. From time to time, some companies may offer additional incentives, such as travel rewards, for a limited number of agents /brokers in recognition of sales made over a specified period of time. We have not accepted any such travel incentive in the last decade, but it is important for our clients to understand that this has been an industry wide practice for many years.
As an independent broker, we are bound by the laws governing life insurance agents in Ontario and the Code of Ethics of our professional association, (Independent Financial Brokers of Canada). This means that any insurance product(s) we recommend, will be the ones we deem to be best suited to meet your needs, without regard to the compensation practices of any one company.
When you purchase insurance from us, we will be paid a commission by the Insurance Company and may be eligible for other forms of incentive compensation. Our role as an independent advisor is to work on behalf of our clients as their intermediary and advocate and to resolve any questions our clients may have throughout the time they hold that policy, to ensure their ongoing satisfaction.
The commission rate paid on employee benefits is typically based on the annualized paid premium. The compensation amount can be set as a flat percentage of premium (usually from 4% to 6%) or as a declining scale (often called the Crown scale). This “Crown Scale” pays a decreasing percentage of commission as the annual premium grows and is the most common form of compensation used today.
Ideal Benefits is indirectly compensated by the insurer on a percentage of premium basis according to set schedule. The percentage of commissions we receive varies depending on the premium paid and the size of the group. Unless contracted on a fee for service basis, or fee offset, you will receive no billings or invoices from our firm. The standard commission scale is as follows:
Standard Group Compensation
|Annual Premium||Flat %|
|$750K to $1M||3.0%|
|$500K to $749K||4.0%|
|$250K to $499K||5.0%|
|$125K to $249K||6.0%|
|$75K to $124K||7.0%|
|$0 to $74K||8.0% – 10%|
Life and Health
Standard Retirement Compensation Schedule
|Plan Assets||Cash Flow||Assets||Transfers|
|< 2 Million||2%||0.35%||1%|
|> 2 Million||1%||0.25%||0.5%|
Long Term Disability
All premium 15%