Financial Notes & Tips

Life Insurance Needs:

There are many different types of life insurance—Whole life, term life, and universal life are the most common. Depending on your personal situation, one type may be better for you than another. The best way to make an informed decision about the right type of life insurance for you is to understand your options. This is best accomplished with the help of a trained and trusted advisor, who is working in your best interest. Remember life insurance is primarily about protection.

Life insurance can be creditor protected. 100% of the amount paid out on death can be directed to the beneficiary(ies) that have been named on the policy, usually tax-free. This may take the funds out of the reach of creditors and it should avoid any probate costs.

Key person insurance provides funds upon the death of a key person in your business to cover unexpected expenses that may occur as a result of his or her death. These expenses often include recruiting and training costs, and the need to cover a loss in cash flow due to reduction in sales.

Buy-sell agreements provide for the transfer of ownership of a business under different circumstances – death, disability, retirement or disagreement. Proper funding is necessary to ensure money is available to purchase the shares of a deceased or disabled owner or partner when needed. Life insurance is usually the most efficient option for business owners with these concerns.

Registered Educational Savings Plans "RESP'S":

Saving for education may be one of your goals. But it’s more than just putting money aside for a child’s education. It means deciding how much you can afford to devote to that goal in light of your other plans and financial obligations. Saving for education is different than saving for retirement -- the time you have for saving is much shorter.

An RESP is one of the best options available to give a child a head start to higher education. Income and Capital Gains earned inside the RESP are tax sheltered until they are withdrawn (presumably when the child begins post secondary education, and at a lower tax rate). The principal is not taxed when withdrawn, nor can it be deducted when put into the plan.

One of the best reasons to have a RESP is the Canada Education Savings Grant. The Grant will add 20% of the contributions you make up to a maximum of $400.00 per year providing the child is eligible. To a maximum lifetime amount of $42,000.00.

Guaranteed Investments

Guaranteed Investments can form an intregal part of your portfolio. Regardless of market conditions, the guaranteed portion of your portfolio is always growing, and that reduces overall risk. There are advantages to investing the guaranteed portion of your investments with an insurance company. They include, competitive interest rates, flexibility, and the ability to name a beneficiary on both registered and non-registered plans. This ensures that the value of the plan goes directly to those you name, bypassing the expense and inconvenience of probate at death.