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.

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One of the most painful experiences we encounter in life is the death of a loved one. The grief can be overwhelming, leaving the survivor(s) in shock and disbelief. By pre-planning your funeral, you can help alleviate some of the stress. By discussing your final wishes with your spouse/family, and having a plan in effect, the survivors do not have to worry about making the final arrangements, especially when grief may hinder making good decisions.

Although this is a difficult subject to discuss with your loved one(s), planning ahead will help them when they need it the most. It also ensures that your wishes will be carried out. Issues such as organ donation should be discussed so that your family is aware of what you wish to have happen. The more that you plan beforehand means less that your loved ones have to deal with in the event of your death.

When planning your arrangements, you must first decide on how much money you can afford and are willing to spend. If you decide to pre-pay for your arrangements, ask whether or not interest will be paid on the money, and if so, whether the funeral home or your estate receives the interest. Compare the rates at various funeral homes before making your decision. It is also important to make sure that you are dealing with a reputable funeral home, that will in all likelihood be in business for years to come. Consider all aspects of your service, such as whether or not you will be using the funeral home's chapel or your own church, and whether their chapel will be suitable for your plans. Before signing the contract, make sure that all goods and services are specifically stated, in order to preclude further costs at the time of the funeral.

Clearly state your intentions of what you wish to have happen to your remains. If you wish to become an organ donor and/or donate your body to science, it is important that your next of kin is aware of this request. Make sure that your wishes are in writing, either by filling out the donor card on your driver’s license, or simply by stating these wishes in writing and signing the document. As well, discuss your "living will" with your next of kin in the event of an accident. This will allow your loved ones to carry out your intentions in the event that you are not capable of doing so, i.e. coma.

If you decide to be buried, you may want to consider purchasing your burial plot beforehand. If you choose to buy your plot in advance, you need to talk to your loved one(s) about their wishes. You may decide that buying adjoining plots will best suit your needs. Before you make your purchase however, ascertain whether or not you will be able to sell or transfer ownership of the plot(s) in the event that you change your mind for whatever reason.

Once you have discussed your plans with your loved one(s), make sure that it is documented. Make sure that all your papers, i.e. current will, insurance policies, etc. are together, and that your next of kin is aware of where these are stored. Make sure you include your insurance broker's name and number, as well as any other phone numbers that your next of kin may require at the time of death. This will enable your loved one to easily access the needed information.

Talk with your loved one(s) about your wishes, and also discuss what policy or policies you currently have. By providing your next of kin with all the information they will need to access, you will be providing them with the peace of mind they will need in their time of grief.

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.

Choosing The Right Charity

Many Canadians choose to donate to charities in an effort to make life better for those less fortunate. Charities play an important part of Canadian society, raising money for programs that would not otherwise be able to financially survive. Before donating, it is important to make sure it is a legitimate recognized charity, and that your donation is being spent properly.

Unfortunately, there are some unscrupulous people posing as charities in order to illegally profit from donations. With so many different charities to choose from, potential donors need to exercise some caution before committing to donating their money. A simple way to verify if a charity is legitimate is to see if they are registered under the Income Tax Act. The Canada Revenue Agency registers qualifying organizations as charities, and handles auditing and compliance issues. All registered charities are required by law to file an annual tax return, which is available to the public. They must meet government requirements regarding their expenditures and activities. If a charity is registered, they are entitled to issue official receipts for donations, which can be used by the donor to reduce their payable income tax. If you would like to verify whether a charity is registered, you can call 1-888-892-5667 or visit the Charities Direcorate webpage.

It is advisable to do some homework on the charity that you are interested in. A reputable charity will offer information if asked, such as budget information, annual reports, etc. It is important as well to ask exactly how your money will be spent, i.e. how much goes to operating costs vs. directly going to the intended cause. Never give out your personal information to someone over the phone or internet. Beware of solicitors who pressure you into giving a donation immediately, without allowing you the opportunity to investigate the charity first. This may be an indication that they are not a charity at all, but rather a "scam" that relies on high pressure tactics to dupe unsuspecting citizens. These scams may also use "sound alike" names of reputable charities, trying to trick a potential donor believe that they are legitimate, when in fact they are not.

Once you have decided on a reputable charity, you may want to consider donating a life insurance policy. This can be done by either gifting ownership of an existing policy to the charity, or by having the charity take out a policy on the donor’s life. With either of these options, the charity becomes the owner of the policy. Choose carefully which option will suit your taxation purposes, as they carry very different results.

If you donate an existing policy, or have the charity take out a policy on your life,  a tax receipt can be issued for the fair market value. This is calculated by the cash surrender value of the policy minus any outstanding loans plus any accumulated interest. Premiums paid on the policy by the donor, either directly (by you to the insurer) or indirectly (funds paid to the charity that are specifically earmarked for payment of premiums) are considered charitable donations. The charity can issue an annual receipt in regards to these premiums. The beneficiary designation does not need to be irrevocable in order to obtain this charitable tax credit. The donor may also be entitled to a tax deduction for the value of the donated policy. Upon death however, the estate will not be entitled to any further tax benefits.

The other option is to purchase a policy and name your estate as beneficiary. You can then directly specify that the benefits go to your charity or charities. This option does not entitle the donor to a tax receipt for the premiums, but instead entitles the individual for a charitable donation tax credit on the proceeds on their terminal return. However, it is important to remember that there is no "carry-over" for gifts made in the year of death. If the full amount of the tax credit cannot be used, there is a provision in the tax laws to carry back any unused donation one year. The donation limit for the year of death and the preceding year is limited to 100% of the net income.

Donating a life insurance policy can be beneficial to both the donor and the charity. Discuss with your family your intentions of donating a life insurance policy to charity. It is also advisable to seek help from a qualified insurance broker in order to ensure that you understand your options, and can select the method which best suits your taxation requirements.

Tips On How To Successfully Purchase Your New Home

With interest rates among the lowest in decades, and the availability of many different housing options, purchasing a home in Canada may be cheaper than renting. The current real estate market is very favorable to buyers, and financing options are available to accommodate those who are self-employed or who do not have perfect credit. A mortgage may actually cost less than monthly rent payments, and, unlike rent, is an investment that provides the owner with equity.

Whether you're a first time home buyer or not, purchasing real estate is a big decision. Many things need to be considered, from which neighborhood you wish to buy your new home, to which financing options suit your needs best. However, with an organized house buying plan, your real estate experience need not be as complicated as you might think.

Here are some steps to help you in your real estate purchase.

1. Before looking at houses, you should first get your financing in place and determine how much you can afford to spend. It is important to evaluate your current expenses and debt, and decide how much of your budget you can comfortably spend without leaving you financially over burdened. Getting pre-approved for a mortgage will allow you to know beforehand how much a lender is willing to approve you for. This will allow you to have a clear price range of what you can afford to buy, and save you time.

2. Determine what your requirements are for your new home.. It is important to remember that your new home must not only fit your present needs, but also future ones, i.e. whether you are going to be starting a family or having more children. You also need to choose what area(s) are suitable and also meet your financing. These decisions will help you narrow down your search, and eliminate looking at homes that don’t suit your needs.

3. Decide on whether or not you plan on using a realtor. If you do decide to use a real estate agent, ensure that it is someone who you are comfortable with and who understands your needs. Many realtors have their own websites with current listings, so you can browse the internet to find available properties, as well as researching your agent.

4. Use a scorecard when comparing the homes you have looked at. This will help you to remember each homes features, for later comparison.

5. Familiarize yourself with the home inspection process. By learning about home inspection, you can quickly determine which homes are unacceptable, and thus not waste time looking at unsuitable properties.

Banks and financial lending institutions will most often require some type of mortgage insurance before they approve your mortgage application. While many banks offer creditor insurance, term life insurance is also an option for obtaining coverage. Term life insurance actually has many advantages compared to bank insurance. With term life coverage, you choose the beneficiary of the policy, and are the owner of the policy, instead of the lending institution. This allows your beneficiary to use the proceeds of your policy as best suited, either paying all, part or none of the mortgage. This financial flexibility allows the beneficiary more financial options. Bank mortgage insurance names the bank as the beneficiary, with the proceeds going directly to the lending institution.

Most term life policies can be converted to permanent life insurance once the term has been completed. Renewable and convertible plans can be converted without any further medical questions. A term life policy will usually require a medical questionnaire to be completed by your doctor, prior to approval of your coverage. Your bank may require you to provide additional medical questionnaires in order to re-qualify with new rates.

Bank mortgage insurance only covers the amount of your outstanding loan. As the amount of your mortgage decreases, so does your benefit. Term life coverage remains the same throughout the duration of your term. Most policies will allow you to purchase additional coverage, which provides you with more options as your needs change. It is important to realize that with bank mortgage insurance, your coverage will be terminated when the mortgage is paid off. A term life policy covers you for the entire term, regardless of status of the mortgage.

When applying for a mortgage, research all your insurance options. Consider not only insuring the amount of your mortgage, but all your other life insurance needs. It may be cheaper and easier just to purchase one term life policy, which can later on be converted to a permanent policy, which will provide you with estate planning and taxation options as well.