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.
 

Universal life insurance is a hybrid policy that combines certain elements of both term and whole life. Universal life coverage offers the consumer the benefits of a more conventional term life policy, and can build up a cash value more quickly than traditional whole life. It also offers a less rigid structure than whole life coverage.  It's cash value can be linked to shorter-term interest rates, or a combination of other investment options. This offers the potential of a greater rate of return than that of a whole life policy, resulting in faster cash value growth.

It is important to remember that the flexibility of a universal life policy varies depending on the plan type and insurance company. However, one common requirement is that all universal plans must have minimum face values (premiums and death benefit).

With a universal life insurance policy, your premiums as well as your death benefit are flexible (within policy limits) and can be adjusted depending on your current situation. Increases in premium amount and/or death benefit may require medical approval. The savings and investments are segregated from your term policy, and accrue on a tax-deferred basis. Any excess after the premium is paid is applied to an investment account, deposited either monthly or annually. Your investment account can be made up of interest bearing savings accounts, mutual fund type accounts, and or index accounts tied to specific stock market indices. You are free to choose a mix that to best suit your needs. If you have a financial advisor, or are considering getting one, then he/she will be able to help you decide on the most beneficial investment mix for you.

Consult with an insurance broker, and carefully weigh your life insurance options to ensure you choose the policy that is right for you.

Income Trusts: Proposed Taxation Changes

Recently, changes have been proposed regarding the current taxation practices regarding income trusts. Current tax laws have made income trusts a lucrative investment option for many Canadians. However, while the immediate reaction may be to look for other investment options, it is important to remember that these are changes are still in the proposal stages, and would not take effect until 2011.

Income trusts are generally defined as an investment trust that holds income producing assets. Its shares, also known as “trust units” are traded on securities exchanges, in the same manner that stocks are traded. The income is passed on to the investors. These distributions typically yield a higher profit than stock dividends, of up to 10% a year. Income trusts have the ability to generate a constant cash flow, which makes it an attractive option for investors.

Income trusts are structured to avoid the corporate taxes on distributions, thereby paying very little, if any, taxes on its earnings. Traditionally, distributions are taxed on both a corporate level and as dividends. With income trusts however, the trust avoids taxes on its earnings due to the fact that most of the income generated is distributed directly to the unitholders. While these trusts are not infallible, and carry their own brand of risk, the taxation laws have made them a popular choice when Canadians are looking at investment options.

The Tax Fairness Plan has introduced new taxation measures regarding income trusts. A Distribution  Tax will be implemented on all distributions from publicly traded income trusts as well as limited partnerships. For new trusts, this tax applies beginning in the 2007 taxation year. For existing trusts, a 4 year transition period has been proposed, with the new taxation being implemented in the 2011 taxation year. These new taxation laws were announced by the Department Of Finance as a means of curbing the growing trend of Canadian companies avoiding corporate taxes.

If you are currently investing, or are considering investing in income trusts, be aware of these new tax laws. By being informed, you can make the wisest choices in how to obtain your financial goals.

Guaranteed Issue Life Insurance

For many Canadians, purchasing life insurance may appear to be a troublesome prospect. People who have health problems or are advancing in age may assume that they do not qualify for life coverage. Some Canadians unexpectedly find themselves without coverage once they retire, and no longer have group life ibenefits through their employer. Guaranteed life insurance may be the answer for people addressing these specific problems.

Guaranteed life insurance offers coverage regardless of health problems. The only requirements are that you be a Canadian citizen between the ages of 40 to 75. You do not need to fill out a medical questionnaire or submit to a medical examination in order to qualify for a guaranteed life policy. Coverage is available from $5000 to $25,000. Once your guaranteed life policy has been purchased, the premiums do not increase, but remain at the exact same price for the term of your coverage.

Your guaranteed life insurance policy includes a living benefit at no further cost. A living benefit allows the policy holder to receive a cash advance of up to 50% of the benefit in the form of an interest-free loan if the policy holder becomes diagnosed with a terminal illness. The only requirement for this benefit is that the policy must be in force for at least 2 years. The living benefit money can be used in any manner as the policy holder sees fit.

Once your guaranteed life policy has been purchased, it cannot be cancelled. If the policy holder’s health declines, the policy cannot be revoked. Your life insurance coverage can be renewed up to age 95 without having to submit additional medical information. At the age of 95, your insurance will be continued, but you will no longer be required to pay premiums.

All Canadians should have sufficient coverage in order to avoid any possible financial problems. For those Canadians that currently do not have life insurance, but wish to obtain it, ask one of our qualified consultants which life insurance option is the right one for you.