April 30, 2012
WESTERN CATHOLIC REPORTER
From its beginning in 1882, the primary mission of the Knights of Columbus has been to protect families from financial ruin caused by the death of the breadwinner.
Father Michael McGivney, the order's founder, had many widows and orphans in his parish in New Haven, Conn., and used to pass the hat to help them.
When he started the Knights, he collected a fee of $8 per member. He simply kept the money and, when the first member died, he gave it to the family to help them.
From that humble start, the order has grown into one of the top insurance agencies in North America, having more than $80 billion of insurance in force and a sales force of more than 1,400 general and field agents serving Knight of Columbus members and their families.
"We offer top-rated life insurance, long-term care insurance, disability insurance. And we also offer annuity contracts, including RRSPs, RRIFs and tax-free savings," says Marc Bouchard, general agent for Alberta/NWT.
"And we offer all kinds of life insurance, including term insurance, permanent insurance and single premium life."
There is no obligation for a knight to buy insurance but Bouchard said, "It's the responsible thing to do."
"It's every person's responsibility to protect his family in the event of untimely disability or death."
Kevin Paish, a field agent with the Knights for 20 years, gave an additional reason for buying insurance or investing with the Knights.
"We are non-profit but we are very profitable and the profits from the Knights of Columbus go back to the Church, go back to vocations and go to build things we believe in as Catholics," Paish said.
"Private insurance companies have shareholders whereas our shareholders are our members and, when we have a profit, that profit is shared back with our Catholic faith."
HELPING THE POPE
The Knights contribute yearly to the Vatican's papal fund. "We gave Pope Benedict $1.6 million last fall and that's where those funds come from - from our profits," Paish said.
The long-term care insurance is the only product that a member buys for himself. It can be bought from age 30 to age 80, provided the member qualifies medically, and stays with the member until he requires it or dies.
Premiums for any type of insurance depend on age. "The younger you are, the cheaper the premiums are; that's just a fact of life," Bouchard explained.
"If you buy it younger you pay a lower premium, but you supposedly would pay it over a longer period of time. If you buy it older, you are going to pay a higher premium but you won't pay as long. The biggest problem is can you qualify medically as you get older?"
People generally think life insurance provides a benefit only when a member dies.
"In fact, if a member takes permanent life insurance he also benefits because our dividend payback is high - higher than the industry average," Paish said. "Right now our dividends are 4 1/2 per cent and he can use those dividends in retirement."
Since the Knights' funding, the order has paid more than $3.1 billion in death claims and more than $10.5 million in living benefits.
Disability insurance is a new thing for the Knights. It became available last year. "If you get disabled in a car accident, for example, and you can't work, then we will pay your income," said Paish.
"Most people have disability insurance through their employment. This is really for self-employed people that don't have disability coverage." The cost of disability insurance depends on health and occupation.
But as Paish put it, "We are member-driven not profit-driven so our products are always priced very well."
The Knights offer various other products at very competitive rates. Right now they are offering RRSPs, tax-free savings or just a regular savings account at a rate of 2 1/2 per cent per year, guaranteed for a year.
"At the end of the year we'd adjust the rate based on what's happening in the market. And they have a minimum guarantee of 1 1/2 per cent for life," Bouchard said.
Those planning for retirement can put their money into an annuity - basically a vehicle the Knights offer for members to save money for retirement. At retirement, the member can take this annuity out in the form of a monthly income. That income is guaranteed for as many years as the member wants.
The Knights also offer free accidental death benefits for all knights and their wives. It starts at $1,000 and after four years goes to $2,500.
The Knights of Columbus is like an insurance company or an insurance benefit society with $83 billion of insurance in force in Canada and the United States and more than $18 billion of assets.
"We manage our own money; we don't have anybody that manages our money for us," Bouchard said. "All the products we sell are insurance products and they fall under the Insurance Act of Canada."
$3B OF INSURANCE
In Alberta/NWT the Knights have in excess of $3 billion worth of insurance in force. "We issued last year over $250 million of insurance in Alberta/NWT. That was the most insurance issued by any agency in North America."
According to Bouchard, the Alberta Knights have one of the best agencies in North America.
"In approximately the last 10 years we've led the Knights of Columbus as an agency in issued business, which is putting needed coverage in place for our members and their families. We finished in the top three agencies in North America for the last 11 years."
There are approximately 135 general agencies of the Knights in Canada and the U.S.