Retirement Planning

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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.

Different types of life insurance explained

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Different types of life insurance explained

You may already have or are interested in life insurance because it can provide significant financial protection for you and your family. To get the best coverage that suits your needs and lifestyle, it is essential to be familiar with the four most common types of life insurance available:

  1. Term life insurance
  2. Permanent life insurance
  3. Participating life insurance
  4. Universal life insurance

1) Term life insurance

Term life insurance provides coverage for a specific period, such as five, ten, or even fifteen or twenty years. Once that term is up, you can choose to renew your policy – but your premiums may go up.

If you die while your term life insurance policy is in effect, your beneficiaries will receive a tax-free death benefit equal to the amount of coverage you selected. Your beneficiaries can then use that benefit to pay for whatever they choose, such as debts, a mortgage, tuition, and everyday living expenses.

2) Permanent life insurance

With permanent life insurance, you will have coverage for your whole life. In addition, the cost of insurance can be structured so that the cost does not increase as you age, even if your health worsens. However, the level cost for life means that permanent life insurance may be more expensive than term insurance premiums in the early years but potentially less costly than term insurance premiums as you age.

As with term life insurance, your beneficiaries will be entitled to a tax-free death benefit after you die. Permanent life insurance also offers a cash value feature. You can use this cash value as collateral for a loan or withdraw the value – but this will reduce your death benefit.

3) Participating life insurance

Participating life insurance is a type of permanent life insurance – which offers the added bonus of letting you earn dividends. With these earned dividends, you can either reinvest them to help reduce the cost of your premiums or withdraw them as cash.

As with all life insurance policies, upon your death, your beneficiaries will receive a tax-free death benefit to spend as they deem fit.

4) Universal life insurance

Universal life insurance is also another form of permanent life insurance. Along with a tax-free death benefit, Universal Life also lets you invest extra money (if you choose) that can grow in a tax-advantaged account! With universal life insurance, you can provide for your beneficiaries upon death while saving extra cash for yourself or your business.

We can help!

If you are unsure what kind of life insurance is best for you, give us a call today! We can answer any questions about these different kinds of life insurance and what features and benefits are best for you.

Group Insurance vs Individual Life Insurance

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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

Self Owned vs. Bank Owned Mortgage Insurance

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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.

Permanent versus Term Life Insurance – What are the Differences?

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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!

Why Should I Review My Life Insurance?

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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?

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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!

Paying for Education

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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, we outline 7 sources of funds for paying for post-secondary education: 

  • Registered Education Savings Plan

  • Tax Free Savings Account

  • Life Insurance

  • Scholarships, grants, bursaries

  • Personal Loans, Lines of Credit

  • Government Student Loan

  • Personal Savings 

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

Accessing Corporate Earnings

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One of the financial planning issues that business owners face is how to access their corporate earnings in a tax efficient way.

There are 5 standard methods:

  • Salary

  • Dividend

  • Shareholder Loans

  • Transfer Personal Assets

  • Income Splitting

There are also unique ways utilizing life insurance and critical illness insurance to access your retained earnings. Please contact us to learn how we can get more money in your pocket than in the government’s.