As the economy is still dramatically fluctuating, people are now looking at ways to save money. It has been confirmed that the last three months of 2008 Canada did indeed experience a recession, and continues to do so. However, it is important for Canadians to ensure that short-term savings do not impact long-term financial goals and protection.

Some people may find it tempting to cancel their life insurance coverage in order to save on paying the premiums. This 'solution' however can lead to financial consequences later on. Should your health status change, you may find that in the future premiums will be more expensive, and can potentially cost more than what was initially saved; especially for those who purchased their coverage when they had excellent health status.

Financial protection, especially in regards to the wage-earners in the family are even more essential now. Should an unexpected death occur, it is important to have coverage in order to cover not only the funeral expenses, but to make sure that the family has enough money for living expenses, paying off debt, etc. For families with children, the remaining parent may want to take an extended leave from their employment, as well as have the financial resources to pay for additional expenses such as childcare, nanny, etc.

Health insurance is also a wise financial move at the current time. Sudden expenses, i.e. prescription medications, can quickly add up. This total amount per month can easily exceed your premiums, especially with the high prescription costs in some provinces. This coverage is also contingent on health status as well; should a health problem occur you may not be entitled to the same premiums as you once were should you cancel your existing coverage.

For Canadians who insure their mortgage through the lender, consider using term life insurance instead. Choose a term life policy that is compatible with the amount of time that is owed on your mortgage. Not only is this generally a less costly expense, but it offers added benefits. Most mortgage insurance policies only cover the existing balance that is owed; a term life policy retains its full value throughout the duration. Term life also gives the financial control to the policy owner; mortgage insurance is only used to pay off the mortgage should the mortgagee die. Term life offers the beneficiary full control of the money; this can be used to pay off the mortgage, pay off other debts, etc. Especially at a time of need, this flexibility can be essential. There is term life policies that can be converted into whole life insurance once the term has expired, thereby giving the policy holder continuing protection. Many of these policies do not require a new medical questionnaire to be filled out; therefore the rates will be consistent with the health status provided originally. This can be a great way to not only save money at the present time, but also in the future when the rates will possibly be higher.

Go through your monthly budget carefully when decided when and/or where to economize. Any items that are essential to your financial security and well-being should not be cut from your budget if at all possible; try and find other ways to save money. This can include not spending as much on items such as entertainment, clothing, vacations, etc. which, while possible causing inconvenience, will not impact your long-term goals.

Canadian charities are facing a reduction in charitable donations due to the global financial crisis. An open letter was sent to the Prime Minister as well as the Finance Minister that was published in Canadian newspapers. The letter asked for tax breaks for corporate as well individual donations in order to increase charitable giving for Canadian charities.

Under the current laws, individuals and/or corporations can donate shares of publicly traded companies and do not have to pay the capital gains tax. The open letter asked for this same exemption for donations of private company shares as well as real estate. This would put Canada in the same playing field as the United States, and is expected to dramatically increase charitable donations. Currently a tax receipt is issued for donations of real estate and private shares, but a capital gains tax still must be paid on these types of donations.

Donating to charity is not only a great way to help the community, but also for financial planning due to the tax credits. In order to benefit from the tax credits, donors are required to donate to a registered charity. Currently qualified donees include:

• Registered Canadian charities;
• Registered Canadian amateur athletic associations;
• Prescribed universities outside of Canada;
• Charitable organizations outside of Canada that the Government of Canada has made a donation to in the current or previous tax year;
• The Government of Canada, a province, and/or a territory;
• Tax-exempt Canadian housing corporations that provide only low-cost housing for seniors;
• Municipal and/or public bodies that perform a function of government in Canada;
• The United Nations and its agencies.

Donations made to a registered charity do not have to be claimed in the current year, but can be used on any tax return for any of the next five years. Donations can only be claimed once. Tax credits that are carried forward from a previous year must be used before tax credits for gifts in the current year can be applied. When claiming a donation from a previous year, a note should be attached to the return indicating the year in which the receipt was submitted, as well as the portion of the eligible amount you are claiming for the current year and the amount that will be carried forward. Receipts can also be combined with those of a person's spouse/common-law partner and be claimed together on one tax return that will allow for the highest tax credit rate.

Currently, the first $200 that is donated is eligible for a federal tax credit of 15% of the amount donated. For amounts after the initial $200, the federal tax credit is increased to 29% of the remainder. All or a part of this amount is eligible generally up to 75% of the net income. Provincial tax credits are also available; these will vary among the provinces.

For those Canadians who wish to donate to charity and claim the tax credits, only donations made to a registered charity will be allowed. A list of registered charities can be found at the Canada Revenue Agency website. This also provides information regarding any charity that has had their status revoked, as well as new charities that have been registered within the past year. Life insurance policies can also be used to donate to charity, as well as property/cash gifts. When using a policy to donate the donor can either gift the ownership of an existing policy or allow the charity to take out a policy on the donor's life. In either circumstance the charity becomes the legal owner of the policy. When gifting an existing policy, the cash surrender value minus any outstanding policy loans plus any accumulated dividends and/or interest will be considered the fair market value. This amount will then be eligible for a tax receipt. If the donor pays the premiums for a policy in which the charity is the beneficiary, these payments are considered a charitable donation and can be issued a tax receipt yearly for the premiums paid. For more information regarding this charitable donation option, visit Life-Quotes.ca

Each January brings with it the usual resolutions: more exercise, spending more time with family, etc. However, January is also a good time to look back at your finances and re-evaluate your financial strategy.

Re-evaluate your health and life insurance coverage. If you have successfully quit smoking/ and or lost a significant amount of weight, you may be eligible for cheaper rates. You  may want to apply for disability insurance so you’re protected in the event of illness or injury.

Review all your insurance policies. For instance, if you belong to AAA Auto Club, which includes a towing service, remove the towing service on your auto insurance. For those who have health insurance as well, you may not need the medical insurance that's included in the your auto insurance plan. By removing these unnecessary items, you can reduce your premiums. Know exactly what is covered in your health, life, and auto insurances so that you have the coverage you need, and aren't paying for unnecessary items. Consult with your insurance broker about any new insurance products that have become available and may be beneficial for you.

Review your spending and saving habits. Set a fixed amount that goes directly into a savings account every payday. If you need a debit card for this account, get one that allows you only deposit, not withdraw, to avoid impulse buying.

Pay your bills online. You save money on postage and checking costs, and have immediate access to your records and payment history. It's also more environmentally friendly!

Review your credit report annually and try to raise your credit score. Cancel any unused credit cards as well as limit the amount of credit lines that are in your name. Set up loans with automatic payments so you will not be penalized for late payments.

When interest rates are low, add to your mortgage payment to pay down your balance. See if your bank or credit union will allow you to convert your mortgage to biweekly payments that match your pay periods. This method gives you the opportunity to make one extra monthly payment each year, and pays down the principal and saves on interest. Be advised that some institutions may charge a fee to set this payment method up.

Start the new year off with a financial plan in place that realistically reflects your goals. Discuss your goals and other financial concerns with your insurance broker in to make sure that you have the correct coverage.

Chances are, if you have employee benefits, you have some type of life insurance coverage included. While great attention is paid to the details of the health insurance component, many people don't pay attention to the life coverage. It's important to know exactly what your group insurance covers, and to be sufficiently insured.

Group life insurance has it's own advantages and disadvantages. It can be cheaper because the costs are pooled. This means that everyone enrolled in the plan, regardless of gender and/or health habits will pay the same amount. As well, marketing and sales costs may be absorbed by the insurer.

However group life insurance usually has a maximum coverage amount. Most plans will offer coverage around $25,000 and may not go any higher than three times your salary. Depending on your needs, you may require additional insurance coverage. Use the insurance calculator to figure out how much you really need, and purchase additional coverage if needed.

Another important factor is whether or not your group insurance is renewable. Most group life insurance is issued as renewable term, which means the premiums can increase at a steady rate. There is usually no guarantee of renewability and/or the cost of premiums. The master policy may also be revised without consulting the employees, which means you may not consistently have the same coverage and/or rates.

Your group life insurance will usually only cover you for as long as you remain with the same employer. This means that you may find yourself without coverage when changing employers but not having the same optimal health status as when you first started. This could be reflected in higher premiums if you apply for individual life insurance coverage. This is also applicable if your employer changes their insurance carrier. If you retire, you may not be covered anymore, and at a time when life insurance is important.

It is important while you are still in good health, are planning on getting married, buying a home, etc. to know how much coverage you need. If your group benefits does not sufficiently cover you, then you may want to consider buying an additional policy to make sure all your needs are met. This can be done with either a term life or a whole life policy; talk to your broker about which is best for you. If you are planning on retiring and do not have any other life insurance, you can apply for Guaranteed Issue coverage. If you were not sick and/or injured when your group life was terminated, you will eligible to apply for the same amount of FollowMe Life coverage as you originally had. Your spouse can also apply with this program.

Life-Quotes.ca is pleased to announce a new insurance product available for Ontario and Quebec residents. Ontario Blue Cross has released a life insurance policy that can be combined with Long Term Care and Critical Illness Benefits. Until now, life insurance and LTC insurance policies were purchased separately.

Tangible offers the policy holder some very unique options in their insurance planning. With a hybrid policy, you have insurance that reflects your different needs throughout your life. You have life insurance coverage with a level and guaranteed premium. Coverage starts at $5,000 and goes up to $1,000,000 in increments of $1,000, so you can choose the amount that best suits your individual needs. It also gives you payment options such as whole life, 20 years, paid up at 65, and the rates are affordable.

As well as having life insurance coverage, you have the option of combining Long Term Care coverage. By having this hybrid policy, should the need arise; your policy can be converted to suit your changing needs. By having this plan, you can avoid the traditionally more expensive LTC rates, as this plan only converts if and when needed. The rates are leveled and guaranteed, so you can avoid purchasing a separate LTC policy with rates that are subject to being raised. If you suddenly find yourself needing LTC, you can convert either 2 or 5% of the initial amount. Benefits are paid monthly and are tax-free. Critical Illness coverage can also be purchased with this policy, thereby covering every possibility that may occur in your lifetime.

There are some health questions needed in order to be eligible for this type of coverage. If you currently suffer from such conditions as HIV/AIDS, Alzheimer's disease, Angina, have suffered a stroke and/or heart attack, you are not eligible. Be advised as well that for people with a family history of certain genetic hereditary conditions, you may still qualify for these valuable benefits, at an adjusted premium. Please call Life-Quotes.ca for more information, or consult with a broker to see if this coverage is right for you.

As parents get older, circumstances can sometimes be reversed, and the children assume the care of their parent(s). Loss of a spouse, health concerns and/or advanced age are factors that can affect your parent(s) independence. This role reversal can be a difficult transition for both the parent and the child. However, with open communication and patience, this transition period can be made less difficult.

An issue that can be difficult to discuss with your parent(s) is their financial status. However, in case of sudden death or illness, you need to be aware of insurance policies, bank accounts, etc. If you need to talk to your parent(s) about their finances, here are 5 questions you should ask them in order to obtain the information you need.

Ask for a complete and thorough list of all their assets. Besides the obvious assets, such as a home, cottage and/or vehicles, you need to know exactly what their assets are. This includes bank accounts, real estate investments, pensions, RRSP's, etc. Get copies of all their financial documents, and keep them together in a file folder. In case of illness or death, you will need to have access to these documents.

What are your parents total liabilities? You need to be aware of any current debts that they owe. This is also a good time to discuss different finance options, such as debt consolidation. If they have co-signed for another person's debt, make sure you obtain this information as well.

Are your parents going to need financial support in the future? Realistically look at their income from pensions and/or savings. Will this be enough to support them, and for how long? How much income is generated from their investments? If your parent(s) have not managed to adequately save enough, this is the time to talk to your sibling(s) or other family members about financial support. You may want to consult with a financial planner about investment options.

Do your parents have insurance coverage? Ask to see all current insurance policies your parents have. Health insurance is critical at this stage in life, as well as life insurance. This includes any policies that they may have from employee benefits, as well as any that they have purchased. Check to see what kind of coverage they have, and any terms and conditions of the policies. If they have term life coverage, check to see when this expires. If they do not have adequate coverage, this is the time to consult with your insurance broker and obtain the policy that is right for them. You also need to be aware of who is named as the beneficiary, and update this if necessary. Get copies of all insurance policies so you have access to the information if needed.

Discuss Power of Attorney. Although this can be a very sensitive topic, you need to discuss what will happen in case of sudden and/or prolonged illness. Talk to your parents about who they would like to take on this responsibility, as well as their wishes. Talk to them as well about their wishes in regards to a living will.

It is important to discuss these financial issues as soon as possible. By having a complete picture of your parents' financial status, you can make plans accordingly. If you discover that your parents don't have sufficient life insurance coverage, you may want to consider a Guaranteed Issue policy. There is no medical questionnaire and acceptance is guaranteed. This is beneficial for those who have current health issues. There is also Guaranteed Issue Health Insurance, for those who do not have coverage. This also does not require a medical exam. Health insurance is imperative for the elderly, as their risk for developing health problems increases. Talk to your parents and your insurance broker to ensure that they have adequate coverage.

Many Canadians receive group insurance, otherwise known as employee benefits, from their employer. These plans usually include some form of health and/or life insurance coverage. Group insurance comes in different funding formats. Employers can choose from different funding methods to suit their company's needs.

There is a wide range of funding methods. Fully pooled plans are where the insurance company sets the premium and also absorbs all the risk. Self insured plans have the employer bearing the risk, with the insurer paying the eligible claims. Experience rating occurs where all or part of the risk is shared by both parties. The funding method that is best for your company depends on many factors, such as:

• Number and/or type of employees
• Type of risk you wish to cover
• Premium volume
• Prior claims patterns
• Employer’s ability to accept risk

For a business with a smaller number of employees,  a non-refund or non-retention accounting plan is a good option. Benefits which are payable infrequently (i.e. death or long-term disability benefits) are usually pooled so that these claims are combined with those of other groups. Due to the low incident rate of these types of claims, it is better for the insurance company, rather than the sponsor (employer), to determine required premium rates based on analysis for the entire block of business. There is some funding flexibility available for short-term disability benefits. The sponsor can purchase a weekly indemnity benefit, as well as be self-insured through a sick leave and/or salary continuation plan. Additional supplementary health and dental benefits are usually insured, although their cost will often be adjusted to reflect your actual experience. The larger your employee group is, the more likely your plan will be experience rated, with past claims patterns establishing your future premium requirements.

A fully pooled basis plan does not participate and/or share in the financial results generated by the experience of the plan. The insurance company keeps any profits generated if the amount of premiums paid exceeds claims and expenses. However, the insurance company is responsible for absorbing the costs of any losses if claims and expenses exceed the premiums paid.

For a business with a larger amount of employees, there are different options for group insurance. Benefits such as accidental death and dismemberment (AD&D) and business travel accident are typically fully insured due to the fact that these claims are infrequent and usually in high amounts. As a group grows in size, more funding methods become available as the claiming patterns tend to be more predictable.

Prospectively Rated Approach: This is similar to a fully pooled group in all aspects except for the setting and/or renewal rates. However, unlike a pooled group, premium rates for a prospectively rated plan are determined either in whole or part by the group's claims experience. Although future rates are determined by past claims, this plan is similar to the pooled approach in that the insurer assumes the risk of any shortfalls, but also benefits from any surplus.

At the other end of the spectrum are plans for large employers where a large amount of small claims are expected. This plan can be set up on an ASO Basis "Administrative Services Only". With this arrangement the employer bears the expense of the total amount of claims paid each period plus a handling charge to the insurance company. An ASO account can be set up in 2 ways, depending on what works best for you.

Billed In Advance: Rates are established based on prior claims activity. At the end of the policy year, total premium paid is compared to claims paid. The sponsor is fully refunded any surplus, and assumes immediate responsibility to pay the insurer any deficit which may be owed. This plan offers the sponsor the advantage of level plan funding throughout the year.

Monthly Billed In Arrears: A float of approximately 6 weeks of estimated claims is taken. At the end of the month a bill is produced showing actual paid claims plus expenses. At the end of the policy year an accounting is done, with any surplus being refunded to the sponsor, and with any deficit being the responsibility of the sponsor. Under this plan, there should not be a substantial surplus or deficit, as actual claims are being billed on a monthly basis. These benefits can be insured, but their ultimate cost will equal the client's actual expenses, plus the reserve charges, a cancellation risk margin and premium taxes. There is no pooling and as such, the long term cost can be considerably higher than that under an ASO arrangement.

Larger employer's group life insurance and long-term disability typically are insured with some form of experience rating or partial pooling being applied by the insurer. The characteristics of a group and it's premium volume determine the financing method(s) chosen. A partially experience-rated contract is the closest to the fully pooled method, which recognizes the employer's experience, whether it is good or bad. If a surplus is realized at the year's end, a refund could be issued, or the premium rates could be lowered. This arrangement is known as "retention" or refund accounting.

Refund accounting establishes the rates based on prior years claims similar to a regular experienced rate account. However, it differs with regards to the sharing of the risk. At the end of the year, an accounting is performed with total claims paid being compared to the premiums paid after all the expenses and reserves are removed. If a surplus remains a certain percentage is made available to the policyholder either in a rate reduction for the following year, or in a lump sum. Deficits are the sole responsibility of the sponsor and are usually amortized over a 2-3 year period under a deficit recovery component which is built into the future rates. This type of funding arrangement requires a Claims Fluctuation Reserve, which is a specialized buffer as a safeguard against financial deficits. This is a fund established by the insurer with the sole purpose of offsetting any deficits. It is funded from previous plan surpluses. This provides the insurer with protection against shortfalls due to future poor experience, as well as the possibility of the plan terminating in a deficit. Once the CFR is fully funded, and future surplus is available to the sponsor in the form of a refund, and the "risk charge" is usually reduced.

Stop Loss – ASO and Retention: Most plans, whether fully insured, ASO, or somewhere in between have some sort of protection against catastrophic claims. Stop loss protection is a part of the financing methods which places emphasis on the maximum level of claims to be recognized by the insurer in its experience rating claims. Stop Loss is an arrangement whereby claims are either self-insured or experience rated up to a certain dollar value, after which additional claims are pooled by the insurer. The insurance company calculates the probability of absorbing this loss and charges an appropriate stop loss premium.

Stop Loss – Fully Insured Plans: As newer and more expensive drug therapies have become available, many employers experienced severe financial loss due to only a few employees making claims. This is a new addition that is available to sponsors which limits the claim amount used in premium setting to approximately $10,000, after which it is pooled by the insurers.

If you are an employer who wishes to start up a benefits package, or are looking for a new group insurance plan, please contact one of our brokers for assistance.

Parents across Canada will be sending their children off to college or university in a few short weeks. For many, this will be the first time their child is leaving home. When considering what your child needs before they leave home, you may want to consider buying them a life insurance policy if they are not already insured.

Purchasing a policy for a young adult has certain advantages. By purchasing life insurance when you are healthy, you can take advantage of cheaper premiums. If you choose to purchase whole or universal life insurance coverage, you are also starting a solid financial investment for your child. This will give your child a head start on an investment plan for their future. You can also choose term life coverage, which will cover the debts incurred by your child in case of death.

While most government student loans will be forgiven in the event of an unexpected death, students generally have other debts that will not be. The majority of young adults incur debt in the form of credit cards, car loans, etc. that will still be owed. Term life coverage can offset these debts, as well as funeral expenses. Parents can purchase a term life policy which will cover their child during their university/college years until the child is in the workplace and able to afford their own insurance.

Buying whole life insurance for your college-aged child has a lot of advantages. Acquiring coverage while the insured person is in good health means that the premiums will be lower. The premiums for whole life cover can also be spread out over a long period of time. A parent can therefore cover the costs while their child is in school, and then allow the child to take over the payments. This will give your child the advantage of lower premiums because it was bought early on. Whole life policies also have a cash value, so your child will have a head start on financial planning. This can be especially helpful throughout your child's life.

You may also want to consider the benefits of purchasing universal life coverage. This will allow you to obtain coverage for your child which is flexible. Your child can adjust his/her policy as their needs dictate, such as getting married, having children, buying a home, etc. This type of life insurance allows your child the benefits of having a policy that builds up cash value, but is less rigid than whole life.

It is advisable to discuss these options with your child to determine which type of policy fits their needs and your budget. Take advantage of their current good health status, in order to save them money in the future. Consult with one of our representatives who can assist you with any questions or concerns.

Wealth Management Mistakes, And How To Avoid Them

We all dream of that day when we retire, and can finally relax and spend our time pursuing our long-awaited plans. With this is mind, it is important to understand your finances, and avoid making potential mistakes that can impact on your financial future. By taking control early on, you can ensure that your retirement years will be well provided for. This list of ten common financial planning mistakes will help you better prepare for your future.

Do not leave your assets unprotected . Your savings, investments, etc. can easily be wiped out due to illness, death, fire, or accident. As you accumulate assets, you need to ensure that you have adequate insurance that reflects your needs. Death or prolonged illness can quickly deplete your savings, leaving you in a financial crisis. Make sure you re-evaluate your coverage on a regular basis, and make sure that your policies reflect your current needs.

Do not mismanage your cash flow. Realistically devise a budget, and stick to it. It can be easy at times with a steady cash flow to spend more and save less. You need to remember that in the future, you will not be receiving a paycheck, and need to save in accordance. Impulse purchases of large items, such as cars, vacations, etc. can easily deplete your savings, thereby affecting your financial future. It may also be beneficial to consult a financial planner in order to devise your budget and investments. A financial planner can also help you invest your assets in such a manner that will minimize your taxes. During your years of employment, it is also wise to carry disability insurance, thereby protecting your assets in case of an accident.

Do not mismanage your debt. While debt is a normal part of life, too much debt can be financially detrimental. Your debt should not exceed your liquid assets, which is the combined total of your cash accounts, brokerage accounts and the cash surrender value of your life insurance policies. If your debt does exceed your liquid assets, it is advisable to try and consolidate your debt at a lower interest rate. Mortgages offer the advantage of a tax break on the interest, which will also help you.

Do not ignore your finances. Financial mistakes can easily be made simply by neglect. Commit time on a regular basis to review your financial status and investments. By simply paying attention, you can avoid any errors and rectify and mistakes.

Do not misjudge your risk tolerance when investing. The stock market can be highly profitable, but it also carries a higher level of risk. Once capital is generated, it must be protected and preserved. Realistically evaluate how much risk you can safely assume when investing in the stock market. Rebalance your portfolio periodically. If you are not comfortable with your current status of stocks and bonds, you may wish to move into a more secure investment practice. In the event that you do suffer a loss with your stocks, try to minimize the loss when you do your taxes.

Do not spend unexpected windfalls of money foolishly.   If you come into unexpected money, such as an inheritance, lottery winning or stock options, resist the urge to go on a spending spree. Consult with a professional on the taxation issues concerning the money, and plan accordingly in order to maintain as much of the money as possible.

Do not fail to maximize retirement plan benefits. The majority of participants do not put the majority contribution allowable into their company retirement plan. By doing so, you will have further savings for when you retire, as well as the tax benefits. Depending on where you work, you may also be able to take advantage of "nonqualified plans", which allow you to defer paying the taxes until a future date. It is important to remember that if the company you work for goes bankrupt, nonqualified assets are not protected. If you are planning on rolling over your retirement plan to an IRA, make sure you thoroughly understand all the taxation issues, in order to prevent taxation penalties.

Do not neglect to realistically plan for how much you will be spending once you retire.   You need to assess whether your current financial plan will adequately provide for the type of retirement you envision. In order to do this, you need to carefully assess on how much money will be coming in, how much you plan on spending, and whether your assets reflect this. By determining how much you plan on spending early on, you can then make changes if necessary in your financial strategy.

Do not forget to plan your estate. Failure to plan your estate ahead of time can lead to financial problems or tax problems later on. It can also leave your loved ones without financial security. Make sure that your estate includes consideration for potential disability as well as death. Include the name of the person who you wish to have power of attorney. It is wise to make sure that your plan is current, and make the necessary changes, such as beneficiaries, immediately.

Do not leave your heir(s) unprepared. Discuss with your family what your intentions are regarding their inheritance. If you are planning on leaving significant sums of money to your heirs, you may wish to teach them how to be financially responsible. When dealing with children, or young adults, setting up trusts may be a wise decision. You may want to set up trusts in installments, where they will receive certain sums at certain ages. By clearly stating your intentions orally and in writing, you can also avoid family fights later on.

By having a well thought out financial plan, you can avoid having to worry about money when you retire. Remember, the earlier you start planning for retirement, the less of a burden it will be later on. Consult with your insurance broker about your coverage, and whether it is sufficient for your plans and needs.

Life Insurance for Your Children

As we journey through life there's school, post secondary education, marriage, children and numerous other events that satisfy our need for happiness. All of life's events require planning ahead in order to ensure the success. What many people don't plan on, is preparing for negative events that can turn our lives into instant chaos.

It has been stated by many life insurance companies that the main purpose of life insurance is to replace lost income so that your family can maintain their lifestyle and pay off debt. There are some websites that advise because children are not economic contributors to the household and don't have debt, it's not critical that they have their own policies. Unless your family has a hefty savings account or investments that can be quickly cashed in, having some life insurance on your child is crucial.

The loss of a child is the worst possible event that can happen in life. Imagine losing your child, you have no savings or investments to draw from to cover the funeral, burial or cremation. That leaves you with a debt anywhere on average from $5,000 to $20,000.

Before you rush out and purchase policies for your dependants, there are several considerations to keep in mind:

• Do you want insurance that will cover the basic cost of a funeral and burial (or cremation)?
• Do you want a policy that has an option for your child to buy additional insurance when he or she comes of age?
• If you do not want insurance, are you disciplined enough to regularly put money aside into an investment or savings account to cover a funeral in the event of death?

We all hope that our children survive us parents. Everyone's needs are different and doing what is right is an individual choice.

For more information written by this guest author, go to http://healthfieldmedicare.suite101.com/article.cfm/health_insurance.

Reviewing Your Retirement Plan

One of the biggest financial challenges is planning for your retirement. What you save for retirement will ultimately decide the quality of life once you stop working, and also determine when you stop working. Once you have a retirement plan, it is very important that you review your plan every few years to determine whether or not it is still reflective of your plans and needs. When reviewing your retirement plan, ask yourself these questions to determine whether you need to amend your original plan.

Are you still planning on retiring at the age you first decided on? Many circumstances, such as illness in the family, getting married, etc. can alter the original plan. Financial setbacks, such as unemployment, a loss in the stock market, supporting a loved one or whether or not your investments are growing at rate on which you accounted for can cause a significant change in your savings, thereby changing your original goal of when to stop working. Determine whether you need to re-evaluate this, and if applicable, decide on when retirement will be feasible.

Are your spending habits still consistent with your original retirement plan? Marriage, divorce, having children can significantly change your bank balance. Big purchases, such as a home or vacation home, new vehicles, etc. can also take a bite out of your savings. Also consider whether or not you have incurred new expenses, such as your children's education, etc. that you didn’t have when you first planned for retirement. It is important to evaluate your current financial obligations, and determine whether or not it is consistent with your retirement plan. You may want to consider cutting expenses where you can in order to save for your retirement.

Is your investment portfolio growing as originally expected? You need to evaluate whether your original investments are still relevant to your needs. Reassess whether or not your original portfolio is growing with your retirement goals. Factor in your age and retirement goal and decide whether or not you need to make changes in order to accomplish that goal. Depending on your target retirement age, and how close you are to that target, you may need to make changes in order to accomplish your goals.

How much can you expect from your government retirement plan? Get a statement of earnings so you know exactly how much money you can expect when you retire. By doing this beforehand, you can also determine whether your account information is correct, and deal with any mistakes before you need this income. Having an accurate dollar amount of what you are entitled to will greatly aid you in determining your retirement budget, and exactly how much savings you will need.

How about your company pension plan? You need to be fully aware of what type of plan it is, whether or not your employers offer matching funds, and whether or not you are contributing as much as you can. You need to research whether or not you can choose the investments and track how well they are doing, as well as what you are entitled to if you choose to leave your employment early. It is important to know how much your plan is worth, and how much it will grow between now and your retirement date.
What happens to your health and life insurance benefits? Determine whether or not your benefits are available after your retirement. Most benefits end upon termination of employment, just when life and health coverage is most needed. For those who are concerned about getting coverage with existing health problems, we offer a Guaranteed Issue Life Insurance plan that is affordable and requires no medical exam. We also offer FollowMe Life Insurance, specifically designed for those who lose their employee benefits. There is no medical examination required, providing you apply for coverage within 60 days of your employment termination. You can choose the amount of coverage you want, and it is guaranteed renewable up to the age of 80, regardless of health conditions. This coverage also provides a Living Benefit, at no additional cost. We also provide Guaranteed Issue Health Insurance; for more information please visit our website HealthQuotes.ca

The closer you get to retirement, the more often you should review all these criteria to ensure that your plan is still meeting all your requirements. Consult a financial planner if you are unsure whether or not you are maximizing all your options. If you are concerned about getting insurance coverage after you retire, please contact us for assistance.

In the past 50 years, the role of women in Canadian society has greatly changed. As well as continuing to be wives and/or mothers, women are now playing a vital role in the Canadian business sector.  It is now not uncommon for women to play a major role in the earning of the family finances, with either being the sole wage earner, or at least contributing a significant portion of the income.

Life insurance has traditionally focused on the family "breadwinner", to ensure that if something should happen, the family would be adequately provided for. As women are now assuming greater financial responsibility for their families, it is vitally important for them to examine their insurance coverage. Women need to adequately assess their financial role in their family, and insure themselves accordingly.

As either a sole wage earner, or as a contributor to the family finances, women need to assess not only the loss of income that would occur in case of death, but also what financial goals they wish to accomplish. Life insurance coverage should reflect the ever-growing role that women play in the workplace and the financial success of their families.

Life Insurance Needs For Older Parents

In the past 25 years, there has been a growing trend to postpone parenthood until later in life. Many Canadians are choosing to focus on career, financial security, and other pursuits, before starting to raise a family.

For those who wait until later in life to start a family, certain financial considerations must be made.  The time a couple may wish to retire may also coincide with major expenses such as higher education, weddings, etc. Careful consideration must be given in order to ensure that not only the needs of the child(ren) are met, but also reflect the parents' retirement plans. It is therefore important to review your life insurance policy with these goals in mind.

Parents who have children later in life also need to consider the fact that health concerns may change as they get older. As well as sufficient health insurance coverage, older parents may wish to purchase disability insurance in order to provide for their family in case of prolonged illness. Disability insurance provides protection against serious illness or accident, and provides a monthly benefit when you are unable to work.

Having children later in life does not necessarily mean putting off retirement. With careful financial planning, both goals can be realized. With permanent life insurance you can achieve your retirement goals via the estate planning and wealth transfer options.
We recommend that you consult with your insurance broker to see if your current life insurance policy reflects your goals, and is adequate to provide for these needs.
 

Employee Benefits and Life Insurance

Along with group health insurance, group life insurance is a common benefit that you may receive from your employer. However, it is important to thoroughly investigate whether this coverage is going to be sufficient for your life insurance needs.  If the coverage that is being offered is based only on your salary, it probably will not be enough to provide complete financial protection for your beneficiaries.

Since the group coverage offered through your employer is free, it makes sense to accept it. However, it is important to calculate how much coverage you will need to have in order to sufficiently pay your existing debts and provide for your family. Group life insurance is usually calculated based on your annual salary, usually around 1.5 percent. Read through your policy to fully understand just what your coverage will be. If this amount is not enough, you will need to purchase additional coverage.

Additional coverage can be purchased either in the form of term life insurance or whole life insurance. Term life insurance, while usually cheaper, expires at the end of a certain time frame, and has no cash value. This is a good policy to buy if you need insurance for a specific debt, such as a mortgage. Whole life insurance does not have a time frame, and as long as the premiums are paid, will never expire. Whole life insurance also has a cash value, which can be useful in planning your finances.

Talk to your agent about your group life insurance policy, and whether or not it is providing enough coverage for your needs. You can always purchase additional coverage to top up the group policy, and thereby ensure that your family and loved ones will be provided for. If you are unsure about the amount of life insurance you require, use our calculator to determine your needs.

Financial Planning And Re-Marriage

Financial planning for your family can be difficult. However, when one or both spouses are entering their second marriage, finances can be a sensitive subject, especially when there are children from the first marriage involved. Decisions need to be made about what finances are to be held separately by each partner, what will be owned jointly by the couple, and what provisions are made for each partner's child(ren) from the first marriage.

One of the differences between first and second marriages is the accumulation of assets. When couples are young and just starting out, it is usually beneficial to pool financial resources. However, people getting re-married may have more assets, and therefore may need to make arrangements in order to determine who is entitled to those assets.

Wills also become a topic of concern. Partners may want to leave certain assets to their children from the first marriage, and not to the second spouse. Also, the beneficiaries of life insurance policies should also be addressed. You may want to purchase another policy for your spouse, while leaving the original policy for your children.

Although this can be a tricky topic, honest communication with both partners and the children (providing they are old enough to take part) is the key. Financial obligations from the first marriage may precipitate the new couple keeping some money separate. For instance, alimony and/or child support payments may not necessarily have to be a joint financial obligation. Another issue that needs to be addressed is any and all outstanding debt incurred before the second marriage. The partners in the second marriage need to be honest about what financial obligations of their new partner they are willing to assume.

Assets are another factor in the financial planning process. If the home is owned by one partner, but being used as the family home, decisions need to be made about who will be left the family home in the event of the owner’s death. If the family home is to be left to the owner's children, then plans and funds must be made available for the remaining spouse to be able to relocate. If both people own homes, and use one as the family residence, then plans must be made for the proceeds of the sale of the second home.

There is no set formula for these issues. Individuals entering into their second marriage must resolve these issues in the format best suited for their needs. It is important to realize that these issues need to be addressed, and to make sure that all parties involved come to an understanding of their new financial obligations, as well as making sure everyone is adequately provided for.

The old rural Canadian adage,  "If you leave your farm to your son, what of equal value can you leave for your daughter?" is taking on a whole new set of complications. The solution can still be very much the same: purchase life insurance.
 

Life Insurance For "Non-Working" Spouses

Generally, when people think of life insurance, they think of insuring the potential income that will be lost when that individual passes away. However, serious consideration must be given to not only to lost income, but the amount of money it will cost to maintain the household when one member dies.

A stay at home parent can be overlooked in terms of financial planning. While technically there is no loss of income, there will be a significant increase in expenses if the caregiver should suddenly die. Therefore, we highly recommend that both parents carry life insurance, not only to protect the family assets, but also to ensure that it is financially possible for the surviving parent to provide quality care for the children.

In planning for the amount of insurance for the stay at home parent, ask yourself (and your spouse) these questions:

• How long would I plan to take a leave of absence from work in order to make the transition smoother for my children?
   
• What kind of care would be best for my children? A nanny, housekeeper, daycare? Remember that these needs will change as your children get older, so this issue needs to be revisited every few years.
   
• Have we made the appropriate arrangements to ensure quality education for our children?

Talk to your spouse about how best to care for your children in the event of the death of the stay at home parent. Your insurance agent is a great resource in helping determine the amount of life insurance you will need in order to meet your projected needs. It is a good idea to remember that as the cost of living goes up, you should re-evaluate your needs every few years to make sure that you will be insured in the amount necessary to allow for the best care possible. Consider using our online insurance calculator to see how much term life insurance is required to cover your needs.

NOTE: Blue Vision from Ontario Blue Cross offers disability insurance to stay-at-home spouses. Contact us for more information.
  
    

Buying life insurance is the first step in preparing for the future. However, it is very important to ensure that your life insurance policy is distributed in the manner in which you intend. This can only be accomplished by a legal will. Proper will planning can not only ensure the preservation and protection of your assets during your life time, but also an effective transfer of assets in a tax-effective manner and the continued preservation of property.

Be aware that the laws differ depending on the province in which you reside. Before you start to plan your will, check with your province’s current legislation regarding wills. Remember that legislation does change, so make sure you are using the most current information available. Consulting with a lawyer is always recommended.

Your will serves several different purposes:

• It designates who will administer your estate.
• Sets out the manner in which you intend your estate to be distributed, and controls the time and manner in which your assets are to be distributed.
• Designate the age when a minor is eligible to inherit.
• Make provisions for a disabled minor.
• Specify which outstanding debts which are owed to you are either forgiven or still outstanding.

Once your will is written, it is important to remember that it is not irrevocable. At any time, you can amend your will as circumstances change. A codicil can be added stating minor adjustments to your will. Remember to check your province's legislation regarding marriage; as marriage can revoke your existing will, unless specific provisions in contemplation of marriage are already stated. Also check your province’s definition of spouse to whether it includes common-law or same-sex spouses.

Division of your estate is a key consideration. It's a wise decision to have a consultation with a lawyer. A lawyer will help you determine the status of your assets and liabilities, and advise you on the distribution of your estate.

The value of your estate (residue of the estate) is the balance left over after expenses associated with burial, taxes, etc. have been paid. This is the amount that will be left to your beneficiary/beneficiaries. Depending on your province of residence, different legislation will determine the rights of your beneficiary/beneficiaries. Your lawyer will have the necessary statutes to advise you of the best way of dividing your estate. 

If you are planning on naming a minor as a beneficiary, it is usually advisable to set up a trust. Unless otherwise stated in your will, the minor will receive their bequest at the age of majority (ages differ according to province). In this case, you will need to appoint someone you trust as the trustee of the minor's trust. You can specify in your will the circumstances (education expenses, etc) in which the Trustee may use trust funds in order to provide for the minor.

If you are a parent, you must consider the guardianship and custodianship in the event that you (and your partner, if applicable) die at the same time. Consult with your lawyer about the laws in your province concerning custody and guardianship. It is important to remember that the trustee of your child's trust does not have to be the same person you designate as the custodian of your child. Choosing a guardian for your child/children is a very important decision, and requires careful consideration and planning. Discuss your thoughts and concerns with your lawyer, who can advise you of the best course of action.

Planning a will does not have to be a confusing experience. Even if you do not want a lawyer to draw up your will, and choose to do it yourself, we strongly advise consulting with a lawyer. A lawyer can help you through the legalities of your will, and also ensure that your wishes are carried out.

Please note that LifeQuotes.ca is NOT engaged in rendering legal or accounting advice.
 

Health And Wellness Programs

Life insurance is more than just a policy to cover you in times of death. Your insurance carrier wants you to be healthy, happy and productive. This is why most carriers are offering health and wellness programs, aimed at educating and supporting their clients in maintaining healthy lifestyles.

Health and wellness programs are designed to educate both employers and employees. Studies show that employers who take an active interest in their employees health and well-being have reduced employee absenteeism by a significant number. Employers who implement programs to promote healthy lifestyles and stress reduction have happier employees with less "burn out" rates and increased productivity.

Standard Life offers a useful health calculator, as well as tips for a healthier lifestyle and diet. The calculator can help you determine whether you are eating a balanced diet, getting enough exercise, and offers help to prevent major health problems. It offers links to other websites that are helpful in education of such health issues as cancer, diabetes and heart disease, as well as mental health concerns.

Talk to your employer about health wellness programs, and ask what programs are available for you and your co-workers. Remember, your health is important not only to you but to your employer and your insurance carrier. Take advantage of these programs to ensure your health for years to come.

The Benefits of Donating a Life Insurance Policy to Charity

Life insurance policies cannot only be left to an individual beneficiary, but can be donated to charity. Along with the satisfaction of knowing that you are leaving money to a worthy cause, donating your policy will also have certain tax benefits.

Donating your life insurance policy can be accomplished in 2 ways. The donor will either gift ownership of an existing policy to a charity, or the charity will take out a policy on the donor’s life. In both scenarios the charity is the owner of the policy.

If an existing policy is donated, the cash surrender value of the policy minus any policy loans outstanding plus any accumulated dividends or interest is treated as the fair market value of that policy.  This is the amount for which a tax receipt can be issued.  Payment of the premiums due on the policy by the donor, which is owned by the charity are considered charitable donations.  The charity can issue an annual tax receipt for these payments, whether they are paid by the donor directly or paid to the charity with instructions that the money is used to pay the premiums.

Where the premiums are paid by the charity, or by a donor on behalf of the charity, these payments are not considered to be a charitable expense and do not count towards meeting its disbursement quota.  Investment income is not counted as part of income for disbursement quota purposes and therefore becomes very valuable to the charity.

If a donor takes out a policy and names his/her estate as beneficiary the donor can then direct the death benefits to go to one or more charities of his/her choice.  While there is no tax relief for the payment of premiums, the individual will be eligible for a charitable donation tax credit on the proceeds distributed to the charity on their terminal return.  If a donor takes out a policy and names the charity as the beneficiary, the donor does not qualify for a charitable donation tax credit for premiums paid.  The individual may, however, claim a charitable donation tax credit on their terminal return for the death benefit paid to the charity.

Finally, use permanent life insurance, and not term life. Term life is temporary insurance, and as such is not well suited for charitable gifting.
 

No, You're Not Too Young

Life insurance is not a topic that people want to think about. Everyone would ideally like to put off this issue for "another year", "when I’m older and need it", or "when I get around to it."

However, purthe ideal time to purchase coverage is when you are young and healthy. Rates will be higher if you purchase your policy after health issues arise.  Policy rates tend to get more expensive with age, so purchasing life coverage at a younger age can be financially beneficial. Remember, you can't buy life insurance with money only, you buy it with your health!

Life insurance is an essential consideration when purchasing a home or borrowing money for business ventures. 

By purchasing your coverage at a younger age, you also have the benefit of choosing benefits that are best suited to you. Different types of insurance offer differing advantages and disadvantages. Take your time evaluating your needs, and projected needs for your future and then select the option that fits your life.

Whole life insurance policies are a viable option for people who are young and in good health. With a whole life policy the premiums are stretched out over a long period of time, minimizing the increasing cost. These premiums can either be spread out over your lifetime, or until a set-upon certain age. The earnings from a whole life insurance policy are tax-deferred, and the death benefit never decreases. These policies  have a cash value and can be used for wealth management and estate planning.

Universal life policies provide the purchaser with the option of being able to reduce or increase the death benefit amount. A great advantage to this type of policy is that the cash value tends to increase in a non-linear fashion, depending on how the purchaser invests his/her money.

Term life insurance is a temporary form of insurance, which covers the purchaser for a limited time span, usually 10 or 20 years, and may be renewable up until a certain age.

Term life insurance can be an attractive option when the insurer wants coverage for a specific debt for a specific time frame (i.e. mortgage). Although there is no cash value, the premiums are lower than for whole life insurance. Some policies allow for the option of converting a term life policy into a whole life policy. Premiums for term life policies will increase at 5, 10, or 20 year intervals with the age of the insured person. 

Just remember that the earlier life insurance is purchased, the more options are available to the consumer. Life insurance does not only provide death benefits, but also help you arrange for your long term financial needs and goals.
     

New Smoke-Free Ontario Act

The Smoke-Free Ontario Act came into effect on May 31, 2006. The new law now bans smoking in all enclosed public places and work places, including Designated Smoking Rooms.  Tobacco use is the province's number one preventable cause of death and/or disease. The Ministry of Health estimates that roughly 16,000 Ontarians die each year from tobacco related causes.

The new legislation is designed not only to protect non-smokers from second hand smoke, but to encourage current tobacco users to finally kick the habit. By limiting where smoking is permitted, the government hopes that current smokers will finally get the message that it's time for the province to quit smoking.

For those who are trying to quit, here a few tips to consider:

• Set a quit date.
• Change your environment where you may be triggered to light up.
• Ask family and friends for support and encouragement.
• Drink a lot of water and other fluids to help flush toxins.
• Talk to your family doctor about effective smoking cessation medications and products.
• Remember that withdrawal symptoms are temporary, don't give up!

For more help in kicking the habit, these resources have been made available:

• 1-800-QUIT-NOW
• 1-888-513-5333
• http://www.smokershelpline.ca

Along with the health benefits of becoming a non-smoker, quitting can also affect your life insurance premiums (especially term life). Depending on the carrier, upon 12 months of quitting smoking, you can apply for an amendment that will give you preferred non-smoking rates. Not only will you save your health by quitting smoking, you'll also save money!

For those people who aren't ready yet to quit smoking, HealthQuotes.ca offers guaranteed issue health insurance. Guaranteed issue health insurance does not require that a medical questionnaire be filled out, since acceptance is not dependent on your current state of health. The following individual health insurance plans are guaranteed issue:

• FlexCare ComboPlus Starter Plan.
• FlexCare DentalPlus Basic and Enhanced Plans.
• Basic Blue Choice (for Ontario residents only).
• FollowMe (employee benefits conversion insurance).

It is a good idea to evaluate your life insurange coverage once a year.

Changes in your lifestyle, family, and income can affect the coverage you need.

Once a year, re-read your policy to determine whether your current coverage is adequate to meet all your needs. You should consult your insurance agent if any of the following have occurred or will be occurring:

1. Change in marital status.
2. The birth or expected birth of a child.
3. Significant increase or decrease in income.
4. Employment status.
5. If you plan on becoming self-employed.
6. Any move outside your current province or country.

Please call our toll free number 1-866-369-4474 to discuss your insurance needs with one of our qualified representatives.

This article specifically discusses wealth management from the perspective of cottage owners, especially those who want to keep a cottage in the family.

When you pass away assets transferred to your children can result in a capital gains tax, which has to be paid before your children can get the inherited property.

In particular there is a major difference between a cottage and a principal residence, in that the principal residence can be sold tax-free, while the transfer of a family cottage is not tax exempt. Also, if the estate owes money (e.g. tax) then the cottage may need to be sold to pay the money owing.

You should strongly consider selling the cottage to your children while you have the chance. This sets a limit on the tax liability, and the cottage does not have to be sold upon your passing (if the estate owes money). In addition this will avoid probate fees.

NOTE: do not attempt to decrease the capital gain by selling the cottage for a very cheap price. The CCRA calculates the capital gain based on a fair market value.

Consider spreading out the payments for at least 5 years if you take the mortgage back from your kids. Also, you can make the mortgage interest-free, and forgive the left-over balance in your will so that when you pass away your children will own the cottage without owing any debt.

Another thing to consider is using permanent life insurance to help manage your wealth and estate (obviously this would include any cottages). Creditor protection and tax benefits are just a couple of advantages to permanent life insurance!

Most Canadian life insurance companies use a 5-level health classification system, with the least expensive at the top and more expensive with each level drop in classification.

These classifications are generally as follows:

1. Class # 1: non-smokers, only 5% of the general population qualifies for this rating. To qualify for this life insurance rate you have to be in fantastic shape and health.
    
2. Class # 2: non smokers, about 20% of the general population qualifies. To qualify for this rate you have to be in above average shape and health.
     
3. Class #3: 50% of non smokers qualify for this rate. The majority of the population qualifies.
     
4. Class #4: Smokers (non-tobacco and non-marijuana users) may qualify for this rating.
    
5. Class # 5: Cigarette smokers qualify for this rate.

Note:

• Most life insurance companies will not accept marijuana users even if usage is for medically approved reasons.
   
• If you quit smoking for one year , you can re-apply to most insurance companies and be granted a non-smoker rating.
  

Often times people buying their first home are not made aware that mortgage insurance does not have to be purchased from the lending institution (usually a bank).

In fact, term life insurance is almost always a better alternative to bank mortgage insurance. There are many reasons for this, including the following:

• With term life the beneficiary is the person you name (e.g. husband or wife), as opposed to the bank.
• The payable benefits remain the same for term life, as opposed to the bank insurance that only pays the remaining amount owing on the mortgage.
• Term life policies can be renewed at a later time and converted to permanent life insurance. Bank mortgage insurance is not renewable or convertible.

Time and time again we have situations where people we talk to end up saving a lot of money by switching their bank mortgage insurance to term life (one reason for this is the low current term life rates).

The following relates the experiences of one of our clients:

"I recently purchased my first home 6 months ago. Like most first-time home buyers I was elated at the prospect of finally owning my own home and naturally financed my mortgage through my local bank. As the time of closing neared, the bank informed me that I would have to insure my mortgage which was for $350,000. I asked them how to go about this, and they told me that they would take care of the details and prepare the paperwork for me. Being somewhat busy with all of the other things that had to be done such as packing, getting ready to move, etc., I was more than a little relieved as it was one less thing to
worry about, and I signed the paperwork.

About 6 months later I was online at your life insurance web site looking to find out about web insurance. I contacted your company and was asked if I had any other insurance in place. I told him about the mortgage insurance and he informed me that the bank's mortgage insurance usually had three factors that needed to be looked at:

1. The lending institution name themselves as the beneficiaries.
2. The rates tend to be high.
3. When a bank pays benefits it is only the remaining principal on the mortgage that is paid out.

I was informed that I could get term insurance to protect my mortgage instead, and that the rates would be much lower and that I could be the named beneficiary.

I applied for the term life, and I am now paying $78/month instead of the $142/month I was paying for my bank mortgage insurance (I cancelled that policy after my term life went into effect on the advice of your broker). I named my husband my beneficiary, and if something happens to me he will get the entire proceeds of my policy ($ 350,000 instead of the remaining mortgage principal)."

Ann Ritchie,
Toronto, Ont.

Life-Quotes.ca is happy to announce the launch of our life insurance blog.

We will be posting life insurance related topics that we feel will be useful to the public.

We encourage comments, and would enjoy your feedback, as well as any suggested content or new articles you would like to see.

We've categorized into Term Life, Whole Life and Mortgage Insurance. Although we recommend term life for mortgage insurance we felt that this should have its own section, and topics particular to mortage insurance.

Cheers!
Life-Quotes.ca