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.