Life Insurance in Burnaby: A Home You Own With Other People

What a household here actually owns

In Burnaby the family home is very often a unit in a building rather than a house on its own lot. The city has grown upward around its town centres, and a great many households here hold their entire position in property inside a structure shared with dozens or hundreds of other owners.

That is not a smaller version of owning a house. The household owns its own unit outright and holds a share in the common property along with everybody else, and the roof over that unit, the envelope around it, the elevators, the plumbing risers and the parkade underneath are all held in common.

So the largest number on the family balance sheet describes something the family governs with other people. The number is real. What the household decides about the thing behind the number is narrower than the number makes it look, and almost nothing written about household planning in this country notices the difference.

Who decides about the building, and where the household sits

Decisions about the building are taken collectively, and the household is one voice among many. The common property is held and looked after through a body the owners make up. What binds a particular owner is set out in that building's own strata documents, which a British Columbia lawyer can read with the family.

What the household sees is a vote at a meeting, held under provincial legislation and under the building's own bylaws. Owners fund the operating budget through regular strata fees, and where something larger is required the money is raised from the owners themselves. There is no other source. The building's costs are the owners' costs, arriving through a body they collectively constitute.

A household is therefore not a customer of that body but a part owner of it. That distinction is easy to miss while everything is routine, and it becomes the whole story the moment something expensive is proposed. A customer can decline. A part owner is bound by the vote.

How a special levy arrives

It arrives as an amount and a date, decided at a meeting, by people who are not in your household. The building needs work beyond what the ordinary budget and the reserve can absorb, a resolution is put, the required majority is reached, and the contribution becomes payable by every unit.

It binds the owners who voted against it and the owners who did not attend. This is the feature that surprises careful families most, because every other large obligation they carry was one they agreed to individually. A mortgage was signed. A car loan was signed. This one was voted on, and their vote may have lost.

Nothing about being prudent protects against it. A household with no debts, a healthy budget and a strong credit record receives the same demand, on the same date, as the neighbour who has never planned anything. The only real defence is expecting it, and expecting it means reading two documents that already exist.

The reserve fund and the depreciation report

A strata corporation holds a contingency reserve fund for expenses that do not recur every year. It exists so that large work can be paid for without asking every owner for a cheque at short notice, and its adequacy relative to the building is among the most useful things an owner can know.

A depreciation report studies the building's major components. What they are, what condition they are in, how long each is expected to last, and what replacing them is likely to cost across coming decades. It is a forecast rather than a promise, and a far better one than most owners use, which is none.

Both documents are available to owners and both are usually read for the first time during a crisis. Reading them in a quiet year costs an evening and nothing else. A household that has read them knows roughly when the building is going to become expensive, which converts a shock into a schedule, and a schedule is something a family can plan around.

Equity is not money

Equity is an arithmetic result. It is what the unit would fetch less what is owed against it, and it lives on a page. Money is something a household can hand to somebody on a Tuesday. Those two things are described with the same vocabulary and they behave nothing alike.

Converting the first into the second requires an event. Either a sale, which means the whole unit, a move, an agent, months and a market that agrees with your timing, or a loan, which means a lender agreeing on the day you ask. There is no third route and neither route is fast.

Which is why a household can be well off and short of cash in the same month. There is nothing contradictory in it. The wealth is genuine and parked in a form that does not come apart, and a family that has never tested the difference usually discovers it under pressure rather than at leisure.

An asset that cannot be sold in pieces

A unit is indivisible in the only sense that matters here. A household needing a fraction of what the home is worth cannot sell a fraction of it. The smallest transaction available is the entire thing, and the entire thing is also where the family sleeps.

That property is unusual and most people have never had cause to notice it. A portfolio can be trimmed. A savings account can be drawn down by any amount at all. A home is the one holding on the list where partial access simply is not on offer, and it happens to be the largest.

It also means the ordinary advice to sell an asset if you need money reaches a strange conclusion here. For most households in this city that advice means sell the residence, move, and interrupt everything about the family's life in order to answer a repair contribution. Almost nobody does it, which tells you the advice was never really available.

Borrowing against the home needs an approval

A loan against a home is a decision somebody else makes about you. Not about the property alone: about current income, current employment, current credit and current serviceability, assessed on the day the application is submitted rather than on the day the household was doing well.

The timing of that is exactly backwards for a household under strain. The circumstances that create the need are the circumstances that weaken the application. An income has stopped, or hours have been cut, or a business has had a poor year, and the household walks into the assessment carrying the very facts that will be weighed against it.

A lender also looks at the building, not only at the borrower. A strata with a thin reserve, unresolved repairs or a large upcoming project is not neutral information, and it can affect what is available to an owner who has personally done nothing wrong. Arranging borrowing while comfortable is a different act from applying for it when it is needed. See estate planning for how the written instruments sit around an asset like this one.

Value inside a contract, and how it is reached

Cash value inside a participating whole life contract is reachable by an advance from the insurer against the contract. It is made at the insurer's stated rate, under the terms of the contract itself, with no application to a lender and no credit decision by anybody.

That is the whole of the contrast and it is deliberately narrow. The claim is not that a contract is larger than a home, because it is not, nor that it grows faster, because that is not the point either. The claim is that access to it does not depend on somebody assessing the household at the worst possible moment to be assessed.

It is also reachable in part. A household needing some of the value takes some of it, which is precisely the thing a unit in a building cannot do. An advance reduces what is paid on a claim while it is outstanding, and that is a real cost rather than a footnote. See advances against a contract for what one costs and what it does to the death benefit.

Why the first years are slow

Cash value in the early years is well below the premiums paid. That is not a caveat added at the end of a sales argument. It is the structure of the instrument, it is true of every contract of this kind, and any presentation that treats the early years as unimportant should be closed.

So this does not answer a contribution demanded next spring. A household that needs liquidity within a few years needs liquid savings, and it should build those first and hear that said plainly on the first call rather than the fourth.

What it answers is the same problem arriving in the twelfth year. The building will still be standing, it will be older, and its components will be closer to the end of the lives the depreciation report set out. This is a decade-scale answer to a decade-scale risk, which is a smaller claim than most of what is written on the subject and a more honest one.

Probate in British Columbia is a fee, not a tax

British Columbia charges a probate fee under the Probate Fee Act. There is no fee where the value of the estate does not exceed twenty five thousand dollars. Above that the Act charges six dollars for every one thousand dollars or part of one thousand dollars by which the value exceeds twenty five thousand but is not more than fifty thousand, and fourteen dollars for every one thousand dollars or part of one thousand dollars by which the value exceeds fifty thousand.

For a household whose estate is essentially one unit in a building, that charge is calculated on a large number that cannot be turned into money quickly. The fee is payable in the administration. The asset it is calculated on is the least liquid thing the family owns, and the two facts have to meet somewhere.

Proceeds paid to a named beneficiary pass outside the estate. They are paid by the insurer under the contract rather than by an executor out of an administration, which is why a beneficiary designation is worth checking before it is needed rather than after.

Wills variation, where it touches a jointly governed home

British Columbia allows a will to be varied by a court. Under section 60 of the Wills, Estates and Succession Act, where a will does not in the court's opinion make adequate provision for the proper maintenance and support of the will-maker's spouse or children, the court may order the provision it thinks adequate, just and equitable.

Section 61 sets the window. A proceeding must be started within one hundred and eighty days from the date the representation grant is issued in British Columbia. Whether any particular will is at risk is a question for a British Columbia lawyer and never for a page like this one.

What matters for this page is the shape of the asset rather than the law. An estate made up of one unit in a building cannot be divided to satisfy anybody without selling the unit, so a disagreement among survivors turns immediately into a question about whether the home is sold. The Vancouver page carries this subject at length. It is mentioned here only because a jointly governed and indivisible asset makes it sharper.

What naming a beneficiary changes about timing

Proceeds payable to a named beneficiary are paid by the insurer under the contract. They do not wait for a grant, an executor or an accounting, and they generally arrive within weeks of a completed claim.

Timing is the whole point when the rest of the estate is a building. An administration takes months at a minimum, and the ordinary costs of a household do not pause while it runs. Strata fees continue. A mortgage continues. A contribution voted on before the death is still payable after it, and it is payable by whoever now owns the unit.

A designation in British Columbia is revocable unless it is made irrevocable. That is the common law default and it is the reverse of what applies to a married or civil union spouse in Quebec. It means an out of date name stays in force until somebody changes it, which is the most common thing found wrong on a contract that has been in place for years.

What to check this month, none of which costs anything

The depreciation report and the current state of the reserve fund. Both are available to owners. Read them together, because a report describing expensive work ahead and a reserve that cannot fund it is the combination worth knowing about years in advance.

The minutes of the last few general meetings. They record what has been proposed, what has been deferred and what is being argued about. Deferred work is not cancelled work, and a deferral is often the clearest signal available.

Who is named on every contract you already hold. Primary and contingent, on individual coverage and on any group plan. One call to each insurer. It is free and it is the item most often out of date.

Whether there is a will, and whether it still says what you believe it says. If the estate is one home in a building, the will is deciding the future of the place your family lives, which is a heavier job than most wills are asked to do.

The order that costs a household least

An employer match comes first, always. It is a return that costs the household nothing, it needs no product and no meeting, and it is taken before anything on this site becomes relevant.

Expensive debt comes second. A household carrying a balance at a real rate of interest is not a candidate for a funding commitment measured in decades, and saying so costs this practice work and remains the right answer.

Only then is there a surplus question at all. What is discussed here begins after the match and after the expensive debt, with money that would otherwise sit uncommitted for a very long time. A proposal that reverses that order has told you what it is for before it has told you anything else. See the order that costs least for the same argument written without a product in it.

Who this page is not for

A household without durable surplus. Early cash value is well below the premiums paid, the funding commitment is real, and a household that would struggle to maintain it should not begin. That is the most common reason the answer here is no.

A household expecting to move within a few years. If the plan is to sell the unit and leave, the problem this page describes solves itself, and paying for a decades-long instrument to address a risk you are about to walk away from is poor arithmetic.

A household looking for a return. This is insurance, it is regulated as insurance, and its primary purpose is the death benefit. Anybody presenting it as a competitor to a portfolio has misdescribed it. See who this does not suit for the case written against the method rather than for it.

What this page will not tell you

It will not tell you that owning in a strata was a mistake. It is how this city houses people, it is frequently the sensible choice, and the argument here would apply to any household whose net worth sits inside one indivisible thing.

It will not tell you a contract is right for you. That depends on surplus that lasts, a horizon in decades and a purpose that is not a tax saving. Where those are missing the answer is no, and hearing it early costs nothing.

It will not price anything. A design depends on age, health, cash flow and what the contract is for, and none of those four things is on a web page.