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A new life is in your hands. And with that life comes immense love and caring and endless adventure. It’s truly a wonderful experience.
Becoming a parent also brings great responsibility. That’s why so many people purchase life insurance when they have a baby. After all, it’s said the number one reason to choose life insurance is when someone depends on you for financial support. And what can be more important when that “someone” is your own child?
What is your responsibility?
You are responsible for your child’s journey all the way until she or he becomes an adult. Looking at it from the financial side, think of everything that’s involved. Paying for daycare, the house your child’s raised in, food, clothing, vacations, summer camp, post-secondary education – and much more.
Your income, of course, pays for all of that. But to really get a good idea of how important that income is, try this. Multiply your annual salary by the number of years until your child completes college or university. As a parent, that future income is something you must protect.
Protection for your family, peace of mind for you
If you’re like many Canadians, you’re starting a family at a time your savings plan is in the early stages. In other words, you don’t have a vast amount of investments that could support your family into the future. That’s what makes life insurance so important when you have a young child. The tax-free insurance amount would become an instant estate.
Life insurance is also for you. It gives you peace of mind knowing your family is taken care of, no matter what happens. And that security is yours from the payment of the first premium.
Do you have life insurance through your employer?
Having life insurance from a group plan at work is very helpful, but many plans only provide an insurance amount that’s one or two times your salary. And that’s not enough when you have a child to protect.
You might be allowed to purchase more group coverage. But there are many advantages to choosing your own personal life insurance instead. You get advice in person from a qualified professional, excellent value, and your coverage always stays with you – even if you change employers.
Fitting life insurance into your budget
You may think life insurance is a good idea, but you’re worried about cost. Especially with all the other new expenses of raising a child. You’ll be pleased to know that it’s very affordable if you choose term life insurance – which gives you coverage for a specific number of years.
A policy providing 20 years of coverage that would leave your family $500,000 may only cost about the same as a cup of coffee a day. Age, health and gender affect the exact cost, so we’ll give you a personalized quote.
How I can help you
Each person, each family, has their own life insurance needs. I’ll meet with you and find out about your personal situation. Sometimes the spouse with lower income, or no income, should have life insurance too. I’ll put together a life insurance solution designed to meet your family’s unique needs, in a way that also suits your budget.
Protect your business, protect your family
Each business may be unique, but there’s one thing all business owners have in common – the need to protect their business against risk. And protection is important whether you’re starting out or running a well-established business.
One of the greatest risks to your operation is that you, a partner or key employee could pass away unexpectedly or develop a critical illness. That’s why life insurance and critical illness insurance are so vital. Together, they help protect your business and your family’s financial security.
Protecting a sole owner
In the first instance, the life insurance benefit can replace the business income that was supporting your family. In the second instance, your family could use the life insurance proceeds to keep the business going while they find a suitable buyer, perhaps also covering the costs of a professional business broker.
Critical illness insurance plays a slightly different role. You might use the lump-sum benefit to hire a manager to keep the business going while you undergo treatment and recover from cancer, heart attack, stroke or another covered condition.
Insuring a key person
You can manage this risk by purchasing life insurance and critical illness insurance on the key person. The insurance benefit compensates for any lost revenue and covers the cost of recruiting a temporary or permanent replacement.
Do you have a co-owner or partner?
Life insurance can be the ideal funding solution. Say that a business has two owners. Each is the owner and beneficiary of a life insurance policy on the other person’s life. When one owner passes away, the surviving owner receives the insurance amount and uses it to purchase the late owner’s interest. The surviving owner is able to buy the business without borrowing, and the late owner’s family benefits by receiving the value of the business in cash.
Creating an inheritance
The answer can be life insurance. One child takes over the business, the other is beneficiary of a life insurance policy on your life, and both children receive a significant inheritance.
How we can help you
Protecting your family’s future is one of your key responsibilities. For most families, that means choosing life insurance. But life insurance is not something to purchase just any place, where you may end up with a one-size-fits-all product. You need a customized solution designed just for your family.
Your insurance needs are unique
Every family has different life insurance needs, based on a variety of factors. You need to take into consideration your annual income, mortgage, number of children, their ages, education plans, life goals and many other items.
An advisor can also help you determine the type of coverage that’s right for you. Term life insurance covers you for a specific period, like 10 years or 20 years. It’s a cost-effective way to protect your family if you pass away unexpectedly.
Or you may require permanent life insurance, which provides protection as long as it’s needed. Permanent insurance is often used to create an estate or cover such costs as funeral expenses and taxes your estate pays. You might benefit from a blend of both term and permanent life insurance.
I’d be happy to meet with you to explain the life insurance process and show you just how easy it can be.
Have you been putting off writing your will or buying life insurance because you think it’s complicated? You’ll be relieved to know that it doesn’t have to be. In fact, with the right help, you’ll find the process pretty painless:
Your will. You can make a very basic will and add to it later if needed. Simply name a person or trust company to administer your estate, decide who gets what, and name a guardian for any minor children.Life insurance. A life insurance professional can do most of the work for you, figuring out how much you need and what type of coverage is best for you.To learn more about how easy it can be to provide the protection your family deserves, contact me today.
This may be the busiest time of your life – there’s so much to do when you move to a new country. Finding a place to live. Opening a Canadian bank account. Getting a Social Insurance Number and a provincial health insurance card. Registering your kids at school. Getting a new driver’s licence, a car, auto insurance. And everything else. It’s like starting all over again!
Life is busy, but there’s one more very important thing to do: protect your family’s future by getting life insurance.
Financial security for your loved ones
But what if you have a long and healthy life? Life insurance can still be an important part of your financial plan. The tax-free insurance amount can be the inheritance you leave to your loved ones. Or it can cover the taxes that typically arise at death, so your heirs receive what you hoped to give them.
If you own a business, there are even more uses for life insurance. Just ask us how it can help you, your business, and even your staff as well as your family.
Where to buy life insurance
In addition to individual life insurance, some companies provide group life insurance to their employees as part of a group benefits package. Similar coverage may be available through professional associations and unions. If you have group coverage, you may still want to purchase additional individual coverage on your own to protect your family more fully on your own terms.
The benefits of advice
Insurance advisors are trained and licensed through the provincial government and required to stay current with life insurance regulations and practices. There’s no obligation to buy, and no cost to you for a professional consultation – advisors receive commissions from the insurance company.
The end result is a customized plan that meets your family’s current needs. Over the years, as your needs change, we can review and adjust your coverage to help ensure that your family members have the protection you want for them.
If you feel mystified and somewhat confused about the topic of life insurance, you’re not alone. To help take the mystery out of the topic, here are the answers to four essential life insurance questions.
Do I need life insurance?
If a loved one counts on you for financial support, you most likely need life insurance. Even if you have group coverage from your employer, it may not be enough to protect your family and may terminate when you leave the company.
How much do I need?
You want to replace your annual income and cover your family’s living expenses, education savings, your funeral costs and final income taxes.
What kind of insurance should I get?
There are two main types of life insurance – term and permanent. You choose term life insurance for a specific period, such as 10 or 20 years, to protect your family if you pass away unexpectedly. You choose permanent life insurance when you need coverage that lasts your lifetime. Permanent insurance meets a variety of needs, including creating an estate, covering taxes on estate assets, and providing for a child with special needs.
Do I have to provide information about my health?
The 2011 Canadian census revealed nearly half a million blended or “step” families (made up of married or common-law couples with children from previous unions) in Canada.1 If you’re among them, remember to review your protection needs.
By keeping your insurance up-to-date, you can help ensure that you, your new partner, your children and your step-children all have adequate protection. Here are three areas to consider.
1) Your existing coverage.
If your former spouse is listed as the primary beneficiary of your existing life policies, you may want change the designation to your new partner or your children. Remember to update not only policies you hold personally but also any life coverage you may have through an employer’s group benefits program.
2) Protection for minor children.
Depending on your situation, you may be supporting more (or fewer) children. The amount of your coverage may need to be adjusted to ensure you can provide them with the support they need until they reach adulthood.
3) Permanent insurance.
A universal life insurance policy can provide protection for you and your partner that lasts your entire life. In addition, it includes an investment component, where you can save and invest on a tax-deferred basis. The cash value of the policy can be a valuable source of income in retirement or to help see you through a job loss.
Call me today to make an appointment. We can review your existing coverage and recommend solutions that will provide the level of protection you need for your loved ones.
1 Statistics Canada, 2011 Census
As a business owner, professional, contract worker or any other one of Canada’s 2.7 million self-employed workers,1 you have probably invested many hours and invest significant resources in your enterprise, particularly during its early years of growth. As your successes accumulate, life insurance can help you protect what you’ve gained as well as protect you and your family.
No employer means no employer benefits
Self-employed workers generally don’t have access to the same, sometimes generous, group benefits plans offered by Canadian employers to attract and keep top talent. Yet if you have a spouse, children or other dependents, you will want to provide them with protection in case you case something should happen to you.
Perhaps you’re counting on the equity in your business to provide financial security to your family if something should happen to you. Unfortunately, it may not provide the level of security you want for your loved ones.
In some ways, you are your business
As an entrepreneur, you are likely to be the primary source of your business’s value. Profits could be crippled if harm befell you and the goodwill you built up in the business could quickly evaporate.
Think of yourself as the axle on a wheel, in which every spoke (your suppliers, workers, clients, mentors, and government officials) connects to you, the business owner, but none are connected to each other. If you step out of the picture, no matter how good the individual components are, the entire structure is at risk of collapsing.
Flexible, affordable protection
To protect yourself, your family and your business, consider the following types of insurance.
Term life insurance. Term 10 or Term 20 provides cost-effective protection tool for a pre-determined length of time — for example, while your children are young and you are building your business. Term life insurance may be especially useful if you have taken out loans or have a credit line to acquire fixed assets such as production equipment. In fact, your lender may require it.
Universal life insurance. Universal life offers excellent coverage that includes a savings component, which can help supplement your income in retirement or during a time of disability.* You can also have the best of both worlds by using universal life insurance as your foundation for permanent protection and adding term insurance for specific, shorter-term, targeted needs.
Critical illness insurance. A critical illness rider can be added to your life insurance policy to provide tax-free funds if you are diagnosed with conditions such as a heart attack, stroke or cancer.
We’re here to help
We understand the challenges you face as a self-employed worker. We can work with you to determine the extent of your life insurance needs and recommend strategies that will help to protect your most valuable asset: yourself.
*For further details on what qualifies as a disability, refer to the policy contract.1 Statistics Canada, Labour Force Survey, November 2013The information contained herein has been created for advisors’ general information only.This material is not intended to provide specific financial, tax, investment, legal or accounting advice and should not be relied upon without seeking the advice of a professional. For complete details of the products described in this article, please refer to the respective policy and other disclosure documents. Any legislative or tax related references are current as at the time of circulation.
Whether you run a farm that’s been in your family for generations or have only recently begun to set down roots in the countryside, chances are you appreciate the differences from city living: cleaner air, more space, less crime, less noise. Here’s how insurance can help protect the lifestyle you love and preserve it for your children.
Ensure your family doesn’t have to relocate
You’ve worked hard to provide a home for your spouse and children. But what if your income was no longer there?
With life insurance, your spouse and children would have the funds they need to continue living in your rural home and hire additional hands to continue the farm business. Life insurance provides a tax-free benefit that your spouse could use to:
– Cover any debts outstanding at the time of your death, including any taxes that might arise as a result.– Pay down or pay off the mortgage.– Pay ongoing household bills.– Maintain contributions to Registered Retirement Savings Plans (RRSPs) or Registered Education Savings Plans (RESPs).– Hire additional hands to continue the farm business.
When you purchase permanent insurance, such as universal life, that coverage. does not expire provided premiums are paid. In addition, it has an investment component that enables you to accumulate funds on a tax-deferred basis that can be used as a source of income in retirement.
Protect your kids’ education
Rural and city parents alike recognize the value of a post-secondary education in helping their children achieve their dreams. With life insurance, you can be confident that your children will have the funds they need to cover tuition, textbooks, and living expenses, even if something should happen to you.
Protect your farm business
If your rural property is not just where you live but also where you work, life insurance can help cover any loans or lines of credit you have taken out, perhaps to purchase machinery or expand. In fact, your lender may even require it as a condition of extending credit.
Divide your estate equally
With farmland values having reached record levels in 2013; your property may be worth a substantial sum — and represent a significant percentage of your total assets. If you have more than one beneficiary, this can present estate planning challenges.
Suppose, for example, that only one of your children is interested in taking over the property. How will you compensate your other child(ren)?
Life insurance can help. You can leave the farm to one child and buy a life insurance policy to provide an equivalent cash death benefit to your other beneficiaries.
These are just a few examples of how insurance can help you protect the people and things that are most important to you. Every situation is unique.
1 RE/MAX®, RE/MAX Market Trends Farm Edition 2013
Keeping a vacation property or business in the family after you pass on has numerous potential benefits. If you leave your vacation property to a child, other family members such as brothers, sisters, nieces and nephews may continue visiting it, which can help maintain and strengthen family bonds.
If you transfer your business to one of your kids, it will often maintain far more intangible goodwill, than if it were sold. It may also provide employment for future generations.
The difficulty is that vacation homes, family businesses, works of art and other valuable assets are not easy to divide, unless you are willing to have them sold. If you want to pass the asset to a child or grandchild, that may not be an option you are willing to consider.
How can you leave the asset to the beneficiary of your choice and still provide for your other beneficiaries?
Life insurance can provide an easy, cost-effective solution. With an effective life insurance strategy, you can leave the asset to one child and leave a monetary gift for other beneficiaries with the proceeds from a policy.
We can help you project what your assets might be worth 10, 20, 30 or more years from now, based on a projected growth rate. If they appreciate more (or less) than expected, your life coverage can be adjusted to keep pace.*
Both term and permanent life insurance can be used as part of an estate-equalization strategy.
*Subject to underwriting requirements and plan minimums.
If you are a parent, you may already be saving for your children’s education, possibly through a Registered Education Savings Plan (RESP). But what if the worst happens and you aren’t there to make the contributions? Life insurance protection helps to ensure that your children’s education costs can be covered, even if something should happen to you or your spouse.
Protecting a child’s prospects
If you are worried about your child’s prospects of getting a good job in an increasingly competitive global environment, you are not alone. More than ever, parents now realize that educated Canadians are more likely to be employed in a full-time job and have higher incomes. For example, one in four (24.1%) of those who held a university degree were in the top 10% in earnings in 2010.1
However, the cost of education continues to rise. For the 2011/2012 school year, the average cost of tuition alone at a Canadian university was $5,366.2 If your child will be entering first-year university in 2031, and education expenses rise by 4% annually, a four-year undergraduate degree could cost almost $43,000 — and that’s just for tuition.
Once you factor in accommodation, books, food, transportation and other costs, the amount is considerably higher. Those totals increase even more if your child plans to enter an advanced program, such as law, medicine or graduate school, or to study outside the country.
Knowing that investments in their children’s education are likely to pay off, more parents are putting away ever larger sums to pay for it. For example, Registered Education Savings Plan (RESPs) contributions rose to $3.7 billion in 2012, compared with $3.44 billion in 2010.3
Simply setting up funding for your child’s education is not enough. You need to make sure that contributions can be fulfilled even if you or your spouse should pass away. That’s where life insurance can help. It’s a convenient, cost-effective way to ensure that your children’s education expenses are covered, even if you are no longer around.
Choosing coverage to meet your needs
There are several different life insurance solutions available to provide the protection you need:
Depending on your child’s age, you could purchase a 10- or 20-year term policy with coverage equal to the projected cost of your child’s education. This coverage would run roughly in parallel to the years in which you save for your child’s education (including contributing to an RESP).
If you need permanent life insurance, an alternate strategy would be to increase your coverage, based on your projected education funding requirements.
How I can help
Whether you are thinking of setting up an RESP for your child, you already have one, or you’re saving outside an RESP, I can help determine the amount and type of coverage needed to protect your child’s future education.
1 Statistics Canada, National Household Survey 2011, Education and occupation of high-income Canadians2 Financial Consumer Agency of Canada, “Budget for student life – How much will your post-secondary education cost?” [http://www.fcac-acfc.gc.ca/Eng/forConsumers/lifeEvents/payingPostSecEd/Pages/Budgetfo-Unbudget.aspx]3 Human Resources and Skills Development Canada, “Canada Education Savings Program — Annual Statistical Review 2012”
You’ve probably read about it yourself. Frightened by the financial crisis, just as they were beginning to prepare for retirement, many Canadians are now paying increasing attention to their savings. But not all are succeeding as well as they would like. Using solutions, such as universal life insurance, increases your chances of funding your post-working years and also gives you the comfort of knowing that you will have something to give to your heirs.
However implementing a successful budget and savings plan is difficult.
If you have life insurance needs, one good away to improve your savings is to combine your need for protection with automatic monthly, quarterly or annual contributions to a universal life insurance policy. Universal life insurance can be set up with one or more investment options to suit your needs.
This strategy has other benefits, too:
I can help you determine how much you can realistically afford to set aside to “pay yourself first” and then structure a plan that fits your requirements to provide the level of protection you need for your family.
1 Statistics Canada, CANSIM Table 380-0072, “Current and capital accounts – Households”2 Statistics Canada, CANSIM Table 378-0123, “National balance sheet accounts, financial indicators, household and non-profit institutions serving households”
If you have children, you need life insurance. That applies whether you earn income or stay at home to raise the kids. But many Canadians with families don’t have life insurance – or have minimal coverage from their group plan at work.
Why the disconnect? In many cases, people don’t have life insurance because they think it’s expensive. Nothing could be further from the truth.
Half a million dollars is a lot of money. So a $500,000 life insurance policy must be expensive, right? Wrong.
A healthy 35-year-old might get a $500,000 term life insurance policy lasting 20 years for about the cost of a cup of coffee a day. Age, health and gender all affect the cost, so the exact premium varies from person to person, but no matter which way you look at it, it’s an economical way to protect your family’s financial security should something happen to you. Your spouse and children would be able to stay in the family home and enjoy the same standard of living they enjoy now and your kids would have the funds needed to go to college or university.
Not only are the premiums for life insurance very affordable, but there are several ways you can reduce the cost even further.
Stay — or get — healthy. Life insurance is priced according to your health status. Different premiums apply to different health classes — for example, a non-smoker will pay less than a person who smokes. Even if you don’t qualify for lower rates when you purchase, you can apply for discounted rates in the future if your health status changes.
Pay annually. You have the option of paying your premium each year, which usually costs less than the sum of the monthly payments.
Start now to pay less. The younger you are, the lower your premium, which is locked in for the life of your policy. So if you need insurance, it makes sense to start now, not when you’re older.
You can also reduce costs by decreasing the amount of coverage over time. This approach makes sense where your need for insurance decreases over time. For example, as you pay down your mortgage and your kids become independent, you may need less coverage.
I’ll work with you to identify your needs and design a life insurance program that will provide security for you and your family now and in the future. With a customized solution from a qualified advisor, you may be pleasantly surprised just how affordable it can be to protect your family.
You’re completing mortgage papers or renewing your mortgage with your bank or other lending institution. The mortgage representative offers you life insurance on the mortgage. Should you say yes?
It depends. Mortgage life insurance pays off the mortgage in the event of your death, enabling your family to keep the home, mortgage-free. But there’s another way to protect your family that you might prefer. Here’s why.
You don’t control the policy. When you purchase mortgage life insurance from your lender, you do not own the mortgage life insurance policy and you don’t get to name the beneficiary – in fact, the beneficiary is the financial institution.
The death benefit decreases. The death benefit gets smaller with each mortgage payment you make. Your insurance premium, however, stays the same.
Coverage ends if you switch lenders. If you renew your mortgage with a different bank, you’ll need to go through the insurance application process again.
An alternative is simply to purchase personal life insurance through an independent life agent and choose an amount that covers your mortgage. This approach offers a number of benefits:
Talk to us. We’ll look at your unique needs and help you find the best coverage for you and your family.
While the world of financial planning may seem complex, the path to success often lies in just four key areas.
As a member of Generation X, you were born between 1965 and 1980. It was a great time to be young. Perhaps you had a garage band or maybe you flash danced your way through every weekend at clubs. But that was then. You’ve since traded in your grunge gear for a designer suit…or at least clothes without holes and pins. Now you have a respectable job and a family and with both of these comes responsibility.
Year in, year out, your family depends on you to make ends meet. How would they cope financially if you passed away unexpectedly? Where would the money come from? Unless you have a large amount of savings that your spouse could access immediately, your family could face serious hardship.
We can help you determine how much life insurance you require and whether you need it for 10 years, 20 years, 30 years or your lifetime.