Retirement Planning

/in , , , , , , /by

brandableContent

Most of us understand the benefits of sensible retirement planning. Still, it doesn’t feel relatively straightforward when it comes to creating your retirement strategy and putting it into effect. The reality is that, while there are lots of variables to consider, it isn’t as challenging to create an effective plan for retirement as you may think.

Firstly, let’s consider the merits of a retirement plan. Firstly, the plan will aid you in setting clear goals for your retirement, such as the age that you want to finish work and what you want your retirement to look like in terms of lifestyle. Secondly, it will help you establish how much you need to save to have a retirement that meets your objectives. Thirdly, a plan will allow you to choose your investment options wisely.

How you know how much you need to save is a common question. This depends on three factors:

  • Your age. It makes sense that starting to save for retirement when you are younger means that you need to save less money than starting later in life.

  • Benefits available to you. There is a range of federal government benefits that you might be eligible for, such as the Canada Pension Plan or Old Age Security.

  • Your plans for your retirement will inevitably affect how much you need to save to fund it.

If you haven’t started saving for your retirement yet or have less in your retirement savings plan than you would like, take a look at our top tips to accelerate your savings.

  • Make the most of RRSPs and TFSAs to minimize your tax bill and make your money grow faster.

  • Take advantage of any pensions or savings plans that your workplace offers, as your employer’s contributions can add extra value to your fund.

  • Look at your spending habits to identify opportunities to cut back outgoings and save more.

  • Think about putting spare money into your retirement fund.

Taking steps to create an effective retirement plan is a decision that will pay off as you approach later life, allowing you to have the savings for the retirement that you deserve.

Talk to us; we can help.

Permanent versus Term Life Insurance – What are the Differences?

/in , /by

Permanent versus Term Life Insurance – What are the Differences?

You know you need life insurance – but you’re not sure which kind is best for you. We can help you with that decision.

There are two main kinds of life insurance:

  • Permanent, which lasts for your entire life.

  • Term, which is only good for a set amount of time.

No matter which type of life insurance you buy – permanent or term – you can rest easy knowing you’ve provided financial protection for your family.

Permanent life insurance

Permanent life insurance is good for your entire life unless you choose to cancel it. It’s an excellent choice to give you peace of mind that you’ll always be covered, even if you develop major health issues later in life.

There are also benefits to having permanent life insurance beyond guaranteed lifelong coverage:

  • You can use the policy to build up a cash value – making it a good choice for low-risk investing.

  • You may be able to use your permanent life insurance policy as collateral for a loan, making it a good choice for business owners.

The main drawback to permanent life insurance policies is that the premiums are often more expensive than term life insurance premiums. If, however, you’re thinking long-term and can afford the premiums, permanent life insurance is a great way to ensure you’re always protected and can have some guaranteed money for your estate.

Term life insurance

Term life insurance is either valid for a set amount of time (such as five or ten years) or until you reach a set age – for example, 60. You should generally be able to renew your life insurance at the end of each term, but your premiums may go up.

Term life insurance premiums are cheaper than permanent life insurance premiums – at least, you are younger and healthier (as the risk of you dying is lower). Your premiums will increase as you age or develop health issues.

You can’t use term life insurance as collateral for a loan or use the policy to build up a cash value. There are lots of benefits to term life insurance, though – it’s a good choice for you if you want low premiums, easy-to-understand insurance, and only need it for a set amount of time – such as while you have a mortgage or young children.

We can help you decide between permanent and term life insurance

If you’re not sure what kind of life insurance is best for you, we can help. We’re happy to talk to you to get more information about your insurance needs. We can then discuss what each type of insurance will cost you and which type of insurance we feel is best for you.

Give us a call today!

Insurance Planning for Incorporated Professionals

/in , , , , , , , , , /by

For incorporated professionals, making sure your practice is financially protected can be overwhelming. Incorporated professionals face a unique set of challenges when it comes to managing risk. Insurance can play an important role when it comes to reducing the financial impact on your practice in the case of uncontrollable events such as disability, or critical illness. This infographic and article address the importance of corporate insurance.

The 4 areas of insurance a incorporated professional should take care of are: 

  • Health 

  • Disability 

  • Critical Illness 

  • Life

Health: We are fortunate in Canada, where the healthcare system pays for basic healthcare services for Canadian citizens and permanent residents. However, not everything healthcare related is covered, in reality, 30% of our health costs* are paid for out of pocket or through private insurance such as prescription medication, dental, prescription glasses, physiotherapy, etc.

For incorporated professionals, offering employee health benefits make smart business sense because health benefits can form part of a compensation package and can help retain key employees and attract new talent.

For incorporated professionals that are looking to provide alternative health plans in a cost effective manner, you may want to consider a health spending account.

Disability: Most people spend money on protecting their home and car, but many overlook protecting their greatest asset: their ability to earn income. Unfortunately one in three people on average will be disabled for 90 days or more at least once before the age of 65.

Consider the financial impact this would have on your practice if you or a key employee were to suffer from an injury or illness. Disability insurance can provide a monthly income to help keep your practice running.

Business overhead expense insurance can provide monthly reimbursement of expenses during total disability such as rent for commercial space, utilities, employee salaries and benefits, equipment leasing costs, accounting fees, insurance premiums for property and liability, etc.

Key person disability insurance can be used to provide monthly funds for you or key employee while they’re disabled and protect the business from lost revenue while your business finds and trains an appropriate replacement.

Critical Illness: For a lot of us, the idea of experiencing a critical illness such as a heart attack, stroke or cancer can seem unlikely, but almost 3 in 4 (73%) working Canadians know someone who experience a serious illness. Sadly, this can have serious consequences on you, your family and business, with Critical Illness insurance, it provides a lump sum payment so you can focus on your recovery.

Key person critical illness insurance can be used to provide funds to the practice so it can supplement income during time away, cover debt repayment, salary for key employees or fixed overhead expenses.

Buy sell critical illness insurance can provide you with a lump sum payment if your business partner or shareholder were to suffer from a critical illness. These funds can be used to purchase the shares of the partner, fund a buy sell agreement and reassure creditors and suppliers.

Life: For an incorporated professional, not only do your employees depend on you for financial support but your loved ones do too. Life insurance is important because it can protect your practice and also be another form of investment for excess funds.

Key person life insurance can be used to provide a lump sum payment to the practice on death of the insured so it can keep the business going until you an appropriate replacement is found. It can also be used to retain loyal employees by supplying a retirement fund inside the insurance policy.

Loan coverage life insurance can help cover off any outstanding business loans and debts.

Reduce taxes & diversify your portfolio, often life insurance is viewed only as protection, however with permanent life insurance, there is an option to deposit excess funds not needed for operations to provide for tax-free growth (within government limits) to diversify your portfolio and reduce taxes on passive investments.  

Talk to us to make sure you and your practice are protected.

Contact Us

Why Insurance Is So Important If You’re A Single Parent

/in , , , /by

Why Insurance Is So Important If You’re A Single Parent

Your kids mean everything to you – and you want to make sure they’re protected no matter what. As a single parent, you must have the right health and life insurance options in place to make that happen. We recommend you consider all of the following types of insurance:

  • Disability insurance

  • Critical illness insurance

  • Accident insurance

  • Life insurance

Disability insurance

Disability insurance can provide you with an income if you become disabled and cannot work – whether it’s for a short period of time or a long one.

Most workplaces offer disability coverage, but it’s tied to that particular job, so you’ll lose coverage if you leave that job. As well, the coverage from your employer’s plan may not be sufficient to cover your needs if you become disabled.

It’s particularly important for you to look into disability insurance if you work as a contractor or have a job with no benefits.

Critical illness insurance

Critical illness insurance can help you pay for the costs associated with various serious medical issues (such as a heart attack, cancer, or a stroke) that aren’t covered by any other health plans or disability insurance. As a single parent, you may find the payout from a critical illness insurance policy especially helpful for paying for extra childcare or lost income if you cannot work.

Accident insurance

Life is getting busier than ever – and there are more and more of us on the roads. Unfortunately, more people on the roads mean more accidents. If you buy accident insurance for yourself or your children, the payout from the policy can bring in some extra income at a critical time of need if any of you are in an accident. You can use an accident insurance payout to help pay for anything from lost income to private home care.

Life insurance

Life insurance is critical as a single parent as your children are dependent on your income. Generally, we suggest that you get a policy that is worth at least 10 times your annual income, but you may need more if you have a lot of debt or you need the money to last a long time.

Your children should be the beneficiaries of your policy and you can name a trustee (such as a grandparent or other relative) to look after the money on your children’s behalf until they reach a specified age.

We can help!

If you have questions about what kind of insurance is best for you, we’re happy to answer them! We’ll walk you through all your options and put together an insurance package that’s just right for you. Call us today!

Self Owned vs. Bank Owned Mortgage Insurance

/in , , , /by

Before buying insurance from your bank to cover your mortgage, understand the difference between self owned mortgage life insurance and bank owned life insurance. The key differences are ownership, premium, coverage, beneficiaries and portability.

Ownership:

  • Self: You own and control the policy.

  • Bank: The bank owns and controls the policy.

Premium:

  • Self: Your premiums are guaranteed at policy issue and discounts are available based on your health.

  • Bank: Premiums are not guaranteed and there are no discounts available based on your health.

Coverage:

  • Self: The coverage that you apply for remains the same.

  • Bank: The coverage is tied to your mortgage balance therefore it decreases as you pay down your mortgage but the premium stays the same.

Beneficiary:

  • Self: You choose who your beneficiary is and they can choose how they want to use the insurance benefit.

  • Bank: The bank is beneficiary and only pays off your mortgage.

Portability:

  • Self: Your policy stays with you regardless of your lender.

  • Bank: Your policy is tied to your lender and if you change, you may need to reapply for insurance.

We’ve created an infographic about the difference between personally owned life insurance vs. bank owned life insurance.

Talk to us, we can help.

Contact US

Why Should I Review My Life Insurance?

/in , /by

Why Should I Review My Life Insurance?

It’s great that you’ve taken the critical step of buying life insurance. But have you reviewed it recently to make sure that your policy is still suitable for you? It’s important to review your life insurance policy annually to check that your policy is up-to-date and see if you require any additional coverage.

There are several reasons you may need to change your life insurance policy. We’ve listed them below.

You’ve gone through a significant life event

You may have gone through a significant life event – such as getting married or divorced or having a child – in the past year. In this case, it’s important to consider changing your beneficiaries to make sure that your life insurance proceeds are distributed appropriately.

If you don’t update your beneficiaries, a previously named beneficiary could still be legally entitled to the money you want other people to receive.

You’ve changed jobs

Congratulations – you’ve got a new job or even started your own business! If you’ve started a new job, you may need more life insurance to account for extra income your family will be accustomed to or to account for a change in your employer-based life insurance policy.

If you’ve started a new business, you’ll likely need additional life insurance to help cover debts you may have taken on to start your new business. Plus, since you’re self-employed, you won’t have any employer-based life insurance anymore.

You’ve taken on some debt

If you’ve recently taken on some debt – such as a credit consolidation loan or a home equity loan – more life insurance may be a good idea. Additional life insurance can provide your loved ones with some much-needed extra income to help pay off debt or even pay for basic living expenses if you die.

You’re supporting family members

If your parents have moved in with you or have moved into assisted living, they may require financial support. Additional life insurance can help pay for this increased financial load.

If you have children ready for college or university, they’ll still need financial support from you. You can help secure their financial future with a life insurance policy that will help cover tuition costs.

You’ve bought a new home

You don’t want to leave your spouse or partner the burden of paying off a mortgage alone. Additional life insurance coverage can ensure they’ll have the funds they need after you pass and won’t be forced to sell at a stressful time.

A loved one has a change in health

If a loved one has recently had a change in their health or a significant medical diagnosis, then it’s essential to review your life insurance coverage. Your loved one may need expensive medical treatment or in-home support – which life insurance can help cover if you die.

If you have any questions about your life insurance coverage or want to make any changes, give us a call!

When should I buy life insurance?

/in , /by

When should I buy life insurance?

Life insurance can benefit you no matter what stage of life you’re at. It’s never too soon or too late to buy life insurance. Not only will it give you peace of mind, but it will also provide your loved ones with financial support after you die.

Types of life insurance

There are two main types of life insurance:

  1. Term life provides temporary coverage for a set amount of time (for example, 10, 15, or 20 years).

  2. Permanent coverage is life insurance that never expires.

Term life is generally cheaper as it is only good for a set amount of time. Permanent insurance will cost you more in the short run but may work out less expensive in the long run as your premiums do not tend to increase as you age.

Life insurance in your 20s

In your 20s, you may feel like you’re immortal and have lots of other things you want to spend your money on. But you also likely have responsibilities – such as student loans your parents may have co-signed for or a mortgage with your partner. If something happened to you, your loved ones would be left alone to pay for that debt. Life insurance could help fill this financial gap.

Also, another great reason to get life insurance in your 20s is that it’s very affordable! You will have a low insurance premium because you are considered low risk.

Life insurance in your 30s

By the time you’re in your 30s, you may have several financial responsibilities – including a mortgage and children. If you’ve only had term insurance up to this point, you may want to consider converting it to permanent to help give yourself lifelong protection.

Even if you have life insurance through your workplace, you may want to buy additional life insurance. Separate life insurance can help cover you if you lose your job or lock-in rates while you are relatively young and healthy.

Life insurance in your 40s, 50s, 60s and beyond

At this stage in your life, you may still have a mortgage or dependent children. You may have even bought a cottage or a vacation property. No matter your financial responsibilities, if your estate doesn’t have enough cash to cover them, it’s essential to have life insurance still.

Now is an excellent time to lock in permanent insurance. However, if you find the premiums too high or know you only need life insurance for a set amount of time, term life may still work for you.

Your next steps

Now you know about the two main types of life insurance and why it’s crucial to have it, no matter what age you are. If you’re not sure where to go from here, contact your insurance advisor or us – we can help you figure out your next steps!

Saving for Education

/in , , , /by

Post-secondary education can be expensive, however, having the opportunity to plan for it helps with making sure that you’re capable to meet the costs of education. In addition, when you have a plan, it’s easier to make financial decisions that align with your goals and provide peace of mind. In the infographic checklist, we outline 6 factors to consider when paying for education: 

For parents:

  • How much to save and when will your child start school?

  • Registered Education Savings Plan – have you set up a family RESP plan and received the Canadian Education Savings Grant? If your income is low enough, you could qualify for the Canada Learning Bond.

  • Savings- are you saving separately for your child’s education? Cash Value Life Insurance- have you considered using this as a savings vehicle for your child’s education. What happens if your child decides not to go to school? These alternative savings vehicles provide flexibility so that you can use the funds for something else such as a down payment for a future home.

For children:

  • Will the child be working part-time and have their own savings for school?

  • Can the child apply for scholarships, bursaries or grants?

  • Will they need to apply for government student loan, personal loan or personal line of credit?

If you need help planning to save for your child’s post-secondary education, contact us!

Life Insurance after 60- is it necessary?

/in , , /by

You may have had life insurance for as long as you can remember. You wanted to make sure that your family would be taken care of and be able to pay their bills if anything happened to you.

But now that you’re older and your children are grown – and hopefully your mortgage is paid off – you may not feel you still need life insurance. This could be a valid assumption; however, there are some circumstances under which it may still make sense for you to have life insurance. They are:

  • You still have substantial debt.

  • You have dependent children or grandchildren.

  • You want to leave a financial legacy.

You still have substantial debt

No one likes the thought of leaving their loved ones to pay their debts if they die. If, however, someone has co-signed a loan with you – for example, for a mortgage or a car – and you die, then they will be on the hook for the entire amount.

If you have life insurance and name your co-signer as the beneficiary, this will help relieve any financial burden your death could cause them.

You have dependent children or grandchildren

If you have children who are still dependent on you because they have a mental or physical disability, life insurance can be an excellent way to ensure they will still have access to funds after you die.  Lifelong care can be expensive, and a life insurance benefit will go a long way to helping fund it.

You may have grandchildren you are caring for or that you are not responsible for but want to leave money they can use towards higher
education.  A life insurance payout can be a great way to help a grandchild get a good start in life without having to go into debt.

You want to leave a financial legacy

You may not have dependent children or grandchildren but still want to leave them something when you die. Life insurance can be a great way to do this without cutting back on your spending during your lifetime.

Life insurance can also help make sure that you have something to leave everyone in your will. If you have a family cottage, it can
be complicated to leave it to more than one person or family. Life insurance gives you the option to leave one person or family the cottage and another person or family the cash equivalent.

We can help you!

If you’re unsure whether or not it still makes sense to have life insurance after the age of 60, we’d be happy to sit down with you and talk through your options. Give us a call or email us today!

Group Insurance vs Individual Life Insurance

/in , , /by

Group Insurance vs Individual Life Insurance

“I already have life insurance from work, so why do I need to get it personally?” or “Work has got me covered, I don’t need it.”

While it’s great to have group coverage from your employer or association, in most cases, people don’t understand that there are important differences when it comes to group life insurance vs. self owned life insurance.

Before counting on insurance from your group benefits plan, please take the time to understand the difference between group owned life insurance and personally owned life insurance. The key differences are ownership, premium, coverage, beneficiary and portability.

Ownership:

  • Self: You own and control the policy.

  • Group: The group owns and controls the policy.

Premium:

  • Self: Your premiums are guaranteed at policy issue and discounts are available based on your health.

  • Group: Premiums are not guaranteed and there are no discounts available based on your health. The rates provided are blended depending on your group.

Coverage:

  • Self: You choose based on your needs.

  • Group: In a group plan, the coverage is typically a multiple of your salary. If your coverage is through an association, then it’s usually a flat basic amount.

Beneficiary:

  • Self: You choose who your beneficiary is and they can choose how they want to use the insurance benefit.

  • Group: You choose who your beneficiary is and they can choose how they want to use the insurance benefit.

Portability:

  • Self: Your policy stays with you.

  • Group: Your policy is tied to your group and if you leave your employer or your association, you may need to reapply for insurance.

Talk to us, we can help you figure out what’s best for your situation.

Contact US