Q: Should I pay my life Insurance premiums for life or should I just pay it off in 20 years?
If you calculate the total of all the premiums that you would have paid assuming average life expectancy which currently is 78 for men and 85 for women you will save a lot by paying off your premiums in 20 years. But do keep in mind that the monthly premium for a 20 pay plan is higher than a life pay plan. For younger ages a 20 pay option is a very attractive proposition.
Q: What is a Life Insurance Retirement Income plan?
By investing in a participating whole life Insurance plan your plan generates cash values within the plan every year and this cash value can be used by the policy owner to get a guaranteed lifelong tax free retirement income or it can be used for any financial emergency as and when you need it.
Q: Why is it so important to have critical illness Insurance and disability Insurance as a part of your financial plan?
All our financial goals are based on our current income. If our income suddenly stops due to an injury or an illness our future dreams, retirement plans, our lifestyle, our children's future all of this could be at stake. Our ability to earn an income is the most valuable asset we have so let's protect it the best we can.
Q: How can I get a consistent income from my RRIF?
Once our RRSP is converted into a RRIF we are forced to withdraw a minimum set percentage of our investment every year starting at age 72. When we are 72 we most probably will have our investment in a GIC to avoid the market risk but this results in getting an annual growth of between 1 and 3%. The minimum withdrawal percentage is over 5% so it's obvious that our RRIF investment or our resulting income from that will come down to a zero one day. You can avoid the risk of outliving your income by opening a RRIF which gives you a guaranteed fixed monthly income for as long as you or your spouse lives.
Q: What is the best RESP or children's education plan available in the market?
All plans give a 20% education grant and the learning bond. However there is a plan that also gives a 15% annual bonus on top of the 20% education grant.
Q: What is more important - getting an oil change for your car every 6K km or getting an annual health check up done?
We should give our body the respect it deserves by going for regular health checkups and most importantly following our family doctors advice to a T. Some people after being diagnosed with a health issue stop seeing their doctor and try to become their own doctors. This is not only dangerous for their health but it will also affect their insurability in case they decide to apply for an Insurance policy. Most insurers will get a report from your family doctor if you have a health issue like diabetes or a heart related issue and if the doctor says you are not coming for your regular visits or following the recommended treatment your Insurance application may be denied.
Q: Why is it so important to get key person Insurance?
If you are a business owner you know that the success of your business is dependent on a few key people's efforts like yourself and maybe one or two others. Key person Insurance will protect your business from a financial calamity by giving the business the funds it needs to function normally in case one of the key people is unable to work due to death, an injury or an illness.
Q: Does your corporation pay your life Insurance premiums?
Your Insurance policies should be structured in such a way the premiums should be paid from your corporate account and not your personal account. This will save you a lot of tax dollars that you would have paid if the premiums were being paid from your personal account.
Q: Will my children inherit all my estate or will they have to pay taxes on my estate?
All assets are transferred to our spouse on a tax free basis if we pass away however when the second parent passes away there is a huge taxation element involved before our estate can be inherited by our children. This estate tax cannot be avoided but you can plan for it so that CRA does not become the primary beneficiary of your estate.