Wealth Management

If you are a grandparent wishing to provide an asset for your grandchildren without compromising your own financial security you may want to consider an estate planning application known as cascading life insurance.

The Cascading Life Insurance Strategy

If you are a grandparent wishing to provide an asset for your grandchildren without compromising your own financial security you may want to consider an estate planning application known as cascading life insurance.

How does the Cascading Life Insurance Strategy work?

•        The grandparent would purchase an insurance policy on his or her grandchild and funds the policy to create significant cash value;

•        The grandparent would own the policy and name their adult child as contingent owner and primary beneficiary;

•        The cost of life insurance is lowest at younger ages, allowing the grandparent to establish a plan that allows the cash value in the policy to grow tax deferred;

•        When the grandparent dies his or her adult child becomes the owner of the policy.

What are the benefits of the Cascading Life Insurance Strategy?

•        Tax deferred or tax free accumulation of wealth;

•        Generational transfer of wealth with no income tax consequences;

•        Avoids probate fees;

•        Protection against claims of creditors;

•        Provides a significant legacy;

•        Access the cash value to pay child’s expenses such as education costs. (Withdrawal of cash value may have tax consequences);

•        It’s a cost effective way for grandparents to provide a significant legacy.

Case Study

Let’s consider an example of the Cascading Life Insurance Strategy.  Grandpa Brian is 65 and has funds put aside for the benefit of his grandson, Ian.  He purchases a participating Whole Life policy on Ian for an annual premium of $5,000 for the next 20 years. Brian’s daughter, Kelly is named as contingent owner in the event of Grandpa Brian’s death and beneficiary in the event of Ian’s death.

If Grandpa Brian were to die at age 85, the policy now passes to Kelly with no tax consequence.  The cash value of the policy (at current dividend scale) at that time is approximately $ 154,000 and the death benefit of the policy is approximately $800,000.

As a result of Grandpa Brian’s legacy planning, Grandchild Ian, now age 31, has a significant insurance estate that will continue to grow with no further premiums!

Please call me if you think your family would benefit from this strategy or use the social sharing buttons below to share this article with a friend or family member you think might find this information of value.

 

 

 

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In today’s family it is not unusual for spouses to enter the marriage with children from previous relationships. Parents work hard at getting these children to functionally blend together to create a happy family environment. Often overlooked is what happens on the death of one of the parents. In most cases special consideration for estate planning is needed to avoid relationship loss and possibly legal action.

Avoid Disinheriting Your Children

In today’s family it is not unusualfor spouses to enter the marriage with children from previous relationships.   Parents work hard at getting these children to functionally blend together to create a happy family environment.  Often overlooked is what happens on the death of one of the parents.In most cases special consideration for estate planning is needed to avoid relationship loss and possibly legal action. 

Typically spouses leave everything to each other and when the surviving spouse dies, the remainder is divided amongst the children.  The problem? Even with the best of intentions, there is no guarantee that the surviving spouse will not remarry and inadvertently disinherit the deceased’s children.

6 Estate Planning Considerations for Blended Families

The Family Home

·         In the situation of the family home being owned by one parent prior to the marriage,the other spouse may consider purchasing an interest in the family home. In this situation, consider owning the home as tenants-in-common to allow for each spouse to manage their interest in the home separately.

·         Provisions can be made in the will for the surviving spouse to remain in the home until the time of their choosing (or death) before passing on the interest to their respective children.

Registered Retirement Savings Plans

·         To take advantage of the tax free rollover from their RRSPs each spouse should consider naming each other as beneficiary.  If there are no additional investments or assets to pass on to the children, consider using life insurance as the least costly way to provide a legacy for the children.

Other Assets and Investments

·         If each parent has other assets or investments that could provide income in the event of death, a qualifying spousal testamentary trust could direct that the surviving spouse receives all the income from the trust with the possibility of making encroachments on the capital for specific needs.  Upon the surviving spouse’s death, the remaining trust assets will be distributed to the appropriate children.

Choose a Trustee Carefully

With trusts being vital to effective estate planning, careful consideration has to be given as to whom will be a trustee.  For blended families, children of one parent may not be comfortable with the choice of the trustee for their inheritance.  Some situations may call for multiple trustees or perhaps the services of a trust company.

Although effective, using testamentary trusts might result in some children not receiving their inheritance until the death of their step parent.  Life insurance may be the ideal solution.  Proceeds from life insurance will guarantee that the children will be taken care of upon the death of their parent.

Advantages of Life Insurance for Blended Family Planning:

·         Can be an effective way to create a fair division of assets when one spouse enters the marriage with significantly more wealth;

·         Death benefit is tax free and could be creditor and litigation proof;

·         Ability to name contingent owners and beneficiaries (including testamentary trusts);

 

·         Death benefit could be used to create a life estate under a testamentary trust, providing income to a surviving spouse with the capital going to the appropriate children at the surviving spouse’s death;

·         With a named beneficiary proceeds pass outside of the will so cannot be challenged under any wills variation action;

·         Provides for a significant measure of control and certainty as to when and where the proceeds will end up.

The Elephant in the Room

It is important to remember that whatever planning options are used, total and open communication within the family is essential to maintain family harmony and ensure everyone is aware of the state of affairs.  Full discussion will avoid misunderstandings and reduce uncertainty as to what the future may hold for everyone in the family.

Planning for blended families should involve professional advice in creating solutions that satisfy the objectives of both spouses and their respective children.  Call me if you require help in this area or use the social sharing buttons below to share this article with a friend or family member you think might benefit from this information.

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Ownership of individual life insurance at its lowest level in 30 years The Life Insurance and Market Research Association (LIMRA) 2013 study shines a light on a developing problem for Canadian households:

Ownership of individual life insurance at its lowest level in 30 years

The Life Insurance and Market Research Association (LIMRA) 2013 study shines a light on a developing problem for Canadian households:

  • Individual ownership of Life Insurance was at its lowest level in 30 years;
  • 3 in 10 households did not have individual life insurance at all;

Why Group Life Insurance may not be all that you need

If your goal is to replace income for your family for more than 2 years, you may want to add an individual policy to your group insurance coverage.

According to the same LIMRA study, on average, households with only group coverage can replace the household’s income for less than 2 years. While households with both group and personal life coverage can replace income for more than 5 years.

While group life insurance provided by an employer is a valuable benefit, it does have limitations when used as the only source for life insurance protection. Some of the reasons group insurance should not be relied on solely for family life insurance include:

  • Group Insurance is not totally portable: If you leave your job, your group life insurance typically does not go with you. While it is true that some of your group benefits may be converted to an individual plan when you leave, the plans available for conversion for life insurance are often extremely expensive and are quite limited. Given that a recent Financial Post survey reports that only 30% of respondents stayed in their jobs for more than four years, this could be problematic. Having additional personal coverage offers a safety net if you find yourself between jobs.
  • Group Life Insurance coverage is often inadequate: Most employee benefit plans provide group life insurance as a multiple of earnings up to a maximum. A common schedule is two times salary and the maximum may leave you underinsured.
  • Renewal of Group Insurance is not guaranteed: It is important to be aware that the contract to provide employee benefits is one between the employer and the insurance company. The employee has little or no control. The coverage may be cancelled by either the company or the insurer. Another concern is that future premiums may not be guaranteed.
  • Group insurance is not flexible for planning: While group coverage is usually a low cost source of life insurance, it should be looked upon as a top-up to personally held life insurance which provides the necessary protection. Proper Financial Advice will determine how much coverage is required to protect your beneficiaries in the event of your death.

5 reasons why consumers don’t act

The LIMRA study also lists five difficulties that consumers have when making decisions about their family protection options.

  • Difficulty in understanding policy details;
  • Are unfamiliar with life insurance;
  • Difficulty in deciding how much to buy;
  • Uncertain about what type of life insurance to buy;
  • Worried about making the wrong decision.

Contact me if you are one of the many Canadians who would benefit from a review of your options to determine if you have an adequate mix in your insurance portfolio. As always, please feel free to use the sharing buttons below to forward this information to anyone you may think would find this of interest.

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Family Business Planning Strategies

If you are an owner in a family enterprise, the chances of your business transitioning successfully to the next generations is not very good. This has not changed over the years. Statistics show a failure rate of:

67% are at Risk of Succession Failure 

If you are an owner in a family enterprise, the likelihood of your business successfully transitioning to the next generations is not very good.  This has not changed over the years. Statistics show a failure rate of:

  • 67% of businesses fail to succeed into the second generation
  • 90% fail by the third generation

With 80% to 90% of all enterprises in North America being family owned, it is important to address the reasons why transition is difficult.

Why does this happen and what can you do to prevent it?

Communicate

Family enterprises are often put at risk by family dynamics.  This can be especially true if the family has not had any meaningful dialogue on the succession of the business. And, while we are throwing around statistics, it has been estimated that 65% of families have not had any meaningful discussion about business succession.

  • Family issues can often hijack or delay the planning process. Sibling rivalries, family disputes, health issues and other concerns certainly present challenges that need to be dealt with in order for the succession plan to move forward.
  • Many times a founder of a family business looks to rely on the business to provide him or her with a comfortable retirement while the children view the shares of the company as their inheritance.
  • Sometimes an appropriate family successor is not readily identifiable or not available at all.

Decide

  • In these times a decision needs to be made as to whether or not ownership needs to be separated from management, at least until the second generation is willing or capable to assume the reigns of management.
  • If the founder needs to receive value or future income from the business a proper decision as to who is running the company is vital. If this is not forthcoming, then there may be no other alternative but to sell the company.

Plan

Tax Planning

When planning for the succession of the business an important objective is to reduce income tax on the disposition (sale or inheritance). One of the methods is to implement an estate freeze which transfers the future taxable growth to the next generation.  The corporate and trust structure utilized in this strategy may also create multiple Small Business Gains Exemptions which can reduce or eliminate the income tax on capital gains. Just as it is important for a business owner to plan to reduce taxes during his or her lifetime, it is also important to maximize the value of the estate by planning to reduce taxes at death.

Minimize Management and Shareholder Disputes

This can be accomplished with the implementation of a Shareholders’ Agreement.   Often there are multiple parties that should be subject to the terms of the agreement, including any Holding Companies or Trusts that may be created to deal with the tax planning issues.  The Shareholders’ Agreement will include the procedures to deal with any shareholder disputes as well as confer rights and restrictions on the shareholders.

The agreement should also define the exit strategy that the business owners may wish to employ.

Estate Equalization

Often the family business represents the bulk of the family fortune.  There are times that one or more children may be involved in the company while the other siblings are not.  Proper planning is necessary to ensure that the children are treated fairly in the succession plan for the business when the founder dies. One method often employed in this regard is for the children active in the business to receive the shares as per the will or shareholders’ agreement while the non-business children receive other assets or the proceeds of a life insurance policy.

Founder’s Retirement Plan

It is problematic that often a business owner’s wealth may be represented by up to 80% of his or her company’s worth.  It is important that the founder develop a retirement plan independent of the business so that his or retirement is not unduly affected by any business setback.

Protecting the Company’s Share Value

Risk management should be employed to provide for any unforeseen circumstances that would have the effect of reducing share value.  As previously mentioned, if the bulk of a family’s wealth is represented by the shares the family holds in the business, a significant reduction in that share value could prove catastrophic to the family.  These unforeseen circumstances include the death, disability or serious health issues of those vital to the success of the business, especially the founder.  Proper risk management will help to ensure that the business will survive for the benefit of future generations and continue to provide for the security of the founder and/or his or her spouse.

Act

Since the dynamics of family businesses differ between non-family firms, particular attention is required in the planning for the management and succession of these enterprises.  This planning should not be left until it is too late – it is never too soon to begin.

Please feel free to use the social sharing buttons below to forward this article to someone that you think might find it of interest.  

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The new rules governing CPP were introduced in 2012 and they take full effect in 2016. The earliest you can take your CPP Pension is age 60, the latest is 70. The standard question regarding CPP remains the same – should I take it early or wait?

The new rules governing CPP were introduced in 2012 and they take full effect in 2016.  The earliest you can take your CPP Pension is age 60, the latest is 70. The standard question regarding CPP remains the same – should I take it early or wait?

While you can elect to start receiving CPP at age 60, the discount rate under the new rules has increased.  Starting in 2016, your CPP income will be reduced by 0.6% each month you receive your benefit prior to age 65.  In other words, electing to take your CPP at age 60 will provide an income of 36% less than if you waited until age 65.

CPP benefits may also be delayed until age 70 so conversely, as of 2016, delaying your CPP benefits after age 65 will result in an increased income of 0.7% for each month of deferral.  At age 70, the retiree would have additional monthly income of 42% over that what he or she would have had at 65 and approximately 120% more than taking the benefit at age 60.  The question now becomes, “how long do you think you will live?”

Assuming that an individual has $10,000 of CPP pension at age 65, and ignoring inflation (CPP income benefits are indexed according to the Consumer Price Index), the following table compares the total base income with that if benefits are taken early or late:

                                        CPP Benefit Commencement

Total benefit received       Age 60       Age 65       Age 70

One year                           $ 6,400      $10,000     $ 14,200   

Five years                         $32,000     $ 50,000    $ 71,000

Ten Years                          $64,000     $100,000   $142,000

 

The question of life expectancy can be a factor in determining whether or not to take your CPP early.  For example, according to the above table if you take your pension at age 60, by the time you reach age 65; you would already have received $32,000 in benefits.  With $10,000 in pension income commencing at age 65 the crossover point would be age 73 (the point at which thetotal income commencing at age 60 equals the total income commencing at age 65). If you were to die prior to age 73, you would have been better off taking the earlier option. 

If your choice is to delay taking the pension until age 70 instead of 65, the crossover would not be reached until age 85.

Some individuals may wish to elect to take the pension early and invest it hoping that the income from age 60 combined with the investment growth will exceed the total income that would be received by starting at 65.

Remember, if you elect to take your pension before 65 and you are still working, you must continue to contribute to CPP.  After age 65, continuing contributions while working are voluntary.  On the plus side, these extra contributions will increase your pension under the Post-Retirement Benefit (PRB).

Reasons to take your CPP before age 65

·         You need the money – number crunching aside, if your circumstances are such that you need the income then you probably should exercise your option to take it early;

·         You are in poor health –  if your health is such that your life expectancy may be shortened, consider taking the pension at 60;

·         If you are confident of investing profitably – if you are reasonably certain that you can invest profitably enough to offset the higher income obtained from delaying your start date then taking it early may make sense. If you are still continuing to work, you could use the CPP pension as a contribution to your RSP or your TFSA.

Reasons to delay taking your CPP to age 70

·         You don’t need the money – If you have substantial taxable income in retirement you may want to defer the CPP until the last possible date especially if you don’t require the income to live or support your lifestyle;

·         If you are confident of living to a ripe old age – if you have been blessed with great genes and your health is good you may wish to consider delaying your CPP until age 70. Using the earlier example and ignoring indexing, if your base CPP was $10,000 at 65 then the pension, if delayed until age 70, would be $14,200.  If you took the higher income at 70, you would reach the crossover point over the age 65 benefit at age 84 and after that would be farther ahead.  

This information should help you make a more informed choice about when to commence your CPP benefits.  Even if retirement is years away it is never too early to start planning for this final chapter in your life.  Call me if would like to discuss your retirement planning.

As always please feel free to pass on this article to friends, family and colleagues using the share buttons below.

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If you require permanent life insurance coverage for family, estate planning, business, or tax planning purposes or you just wish to accumulate money in your life insurance program it may be time to look at a permanent, level cost solution.

If you require permanent life insurance coverage for family, estate planning, business, or tax planning purposes or you just wish to accumulate money in your life insurance program it may be time to look at a permanent, level cost solution.

Many of us purchase large amounts of low cost term insurance to cover our needs while we are raising our families or growing our businesses.  However, as the saying goes, “there is no free lunch”.  Eventually this low cost term insurance starts to become expensive and other options should be considered.

If your health has changed and you are no longer able to qualify for a new permanent insurance policy don’t worry, your safety net is the conversion option in your existing policy.

4 reasons to convert your coverage:

  • A change in your health – you are no longer able to qualify for life insurance or you have received a sub-standard rating.
  • A change in your residency – after you obtained your policy you relocated to another country. Most insurers in Canada will not offer new coverage if you are living abroad. Since the conversion feature in your policy is contractual converting to a permanent plan is allowed no matter where you reside.
  • A change in occupation – health is not the only reason an insurer may rate (apply substandard rates) or deny your application for new coverage. If you have changed occupations and now are employed in a more dangerous job, conversion allows you to obtain permanent coverage at standard rates.
  • Convenience – Once you have decided that permanent insurance is required converting your existing term insurance is the easiest way of getting it. Usually just your signature on a conversion form is all that is required.

When is the best time to convert?

  • Sooner rather than later – The low interest rate environment has resulted in the insurance companies regularly raising their long term insurance premiums. In this case, age is more than just  a state of mind. As you age your premiums increase significantly so it is always best to convert as  early as possible. And to add insult to injury, insurance age changes 6 months prior to your birthday!
  • Before your term insurance renews – If you are unable to replace your term insurance at renewal because of health, residency or occupation, your premium to renew will be substantially higher than what you are paying now. Converting to a permanent plan usually makes sense plus the converted premium is locked in and guaranteed for the rest of your life.
  • Before the Conversion Option expires – Conversion options vary but usually policies are convertible  up until age 65, 70, or 75. Waiting to convert will cost you more, increasing the risk of it becoming unaffordable when you may need it most. It is important not to let your option pass without full consideration.
  • Prior to January 1, 2017 – The government is making changes as to how the cash value growth of a life insurance policy will be taxed. Generally, policies issued on or after January 1, 2017 will not perform quite as well as ones issued before that date. If you are planning on obtaining a cash value life policy (Universal or Whole Life), you should do so before that date.

The Conversion Option contained in your term insurance policy is a very valuable feature that varies from company to company.  It may be appropriate to schedule a review to determine if you have a permanent need for insurance.

Please call me if you think you would benefit from a review of your current insurance.  As always, feel free to use the social sharing buttons below to share this article with a friend or family member you think might find this information of value.

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If you have a mortgage it makes good sense to insure it. Owning a debt free home is an objective of any sound financial plan. In addition, making sure your mortgage is paid off in the event of your death will benefit your family greatly.

If you have a mortgage it makes good sense to insure it. Owning a debt free home is an objective of any sound financial plan. In addition, making sure your mortgage is paid off in the event of your death will benefit your family greatly.

The question is should you purchase this coverage through your lending institution or from a life insurance company? A good rule of thumb to follow when searching for advice? Ask an expert! So, while it might be convenient when completing the paper work for your new mortgage to just sign one more form, be aware that it might be a costly decision.

8 reasons to purchase your mortgage coverage from a life insurance advisor

Cost Term life insurance available from a competitive life insurance company is usually cheaper than mortgage life insurance provided through the lender. This is especially true if you qualify for non-smoker rates.

Availability

If you have some health issues, the lenders mortgage insurance may not be available to you. This may not be the case with term life insurance where competitive underwriting and substandard insurance are more readily attainable.

Declining coverage

Be aware that the death benefit of creditor/mortgage insurance declines as the mortgage is paid down. Meanwhile, the premium paid or cost of the coverage remains the same. With term life insurance the death benefit does not decline. You decide how much coverage you want to have. This gives you the flexibility to reduce the amount of coverage and premium when the time is right for you. Or keep it should another need arise or in the event you become uninsurable in the future.

Portability

Term Life insurance is not tied to the mortgage giving you flexibility to shift it from one property to the next without having to requalify and possibly pay higher rates.

Flexibility

Unlike creditor/mortgage insurance term life insurance can be for a higher amount than just the mortgage balance so you can protect family income needs and other obligations but pay only one cost-effective premium. When you pay off your mortgage you will no longer be protected by creditor/mortgage insurance but term life insurance may continue.  Also, unlike mortgage insurance you are able to convert your term life insurance into permanent coverage without a medical.

The beneficiary controls the death benefit

With creditor/mortgage insurance there is no choice in what happens to the money when you die. The proceeds simply retire the balance owing on your mortgage and the policy cancels. With term life insurance your beneficiary decides how to use the insurance proceeds. For example, if the mortgage carries a very low interest rate compared to available fixed income yields, it might be preferable to invest the insurance proceeds rather than to immediately pay off the mortgage.

Can your claim be denied?

Often creditor/mortgage insurance coverage is reviewed when a death claim is submitted. Creditor/mortgage insurance allows for the denial of the claim in certain situations even after the coverage has been in effect beyond that 2 year period. Term life insurance is incontestable after two years except in the event of fraud.

Advice

Your bank or mortgage broker can advise you on the best arrangement to fund your mortgage but advice on the most appropriate way to arrange your life insurance is best obtained from a qualified insurance advisor who can implement your life insurance coverage according to your overall requirements. 

Your mortgage will probably represent the single largest debt (and asset) you will acquire. Making sure your mortgage doesn’t outlive you is the most prudent thing you can do for your family.

Contact me if you think it is time to review your current insurance protection or please feel free to use the sharing icons below to forward this to someone you think may benefit from this information.  

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Critical Illness insurance was invented by Dr. Marius Barnard. Marius assisted his brother Dr. Christiaan Barnard in performing the first successful heart transplant in 1967 in South Africa. Through his years of dealing with cardiac patients, Marius observed that those patients that were better able to deal with the financial stress of their illness recovered more often and at much faster rate than those for whom money was an issue. He came to the conclusion that he, as a physician, could heal people, but only insurance companies could provide the necessary funds to create the environment that best promoted healing. As a result, he worked with South African insurance companies to issue the first critical illness policy in 1983.

Why a Doctor Invented Critical Illness Insurance

Critical Illness insurance was invented by Dr. Marius Barnard.   Marius assisted his brother Dr. Christiaan Barnard in performing the first successful heart transplant in 1967 in South Africa. Through his years of dealing with cardiac patients, Marius observed that those patients that were better able to deal with the financial stress of their illness recovered more often and at much faster rate than those for whom money was an issue.  He came to the conclusion that he, as a physician, could heal people, but only insurance companies could provide the necessary funds to create the environment that best promoted healing.  As a result, he worked with South African insurance companies to issue the first critical illness policy in 1983.

Medical practitioners today will confirm what Dr. Barnard observed – the lower your stress levels the better the chances for your recovery.  When one is ill with a serious illness, having one less thing to deal with, such as financial worry, can only be beneficial.

Your Life Could Change in a Minute!

Case Study A – Lawyer, Male 55

Tom was a successful lawyer with a thriving litigation practice.  He had recently started his own firm and was recruiting associates to build the practice.  He was a single father assisting his two adult children in their post-secondary education.  Tom had always enjoyed good health, ate well, exercised regularly and was a competitive highly ranked (senior class) tennis player.

In 2006, at age 55, he was diagnosed with prostate cancer.  In addition to the emotional angst and anger at receiving this diagnosis he also was concerned about the financial impact this illness could have on both his practice and his support of his children. Fortunately, five years earlier at the urging of his financial advisor he had purchased a critical illness policy.

Within weeks of his diagnosis Tom received a tax free benefit cheque for $250,000.  He immediately called his advisor to tell him how elated he was that the advisor had overcome his initial objectives to purchasing the policy 5 years earlier.  He went on to say that with having the financial stress alleviated he was certain he would be able to tackle the treatment and concentrate on recovery in a positive manner.

Today, Tom is cancer free, his practice is thriving, and his children are successfully working in professional practices.

Case Study B – Retired Business Owner, Female 52

Christina at age 52 was enjoying a good life that came partially from the sale of her business a few years before.   Her investments were thriving and everything looked rosy.  Then 2008 came along.  As if the stock market crash was not enough, in December of 2008, Christina suffered a stroke.  Fortunately, it was not a severe stroke.  At first the doctors thought that it was actually a TIA as many of her symptons were minor.  The next morning the MRI results confirmed that it was indeed a stroke and it had caused some minor brain damage.

Christina made a remarkable recovery and within a few short months was almost back to where she was before the stroke.  If you didn’t know Christina you wouldn’t have any idea that she had even had one.

As a successful business owner and mother, Christina had always been a big believer in the advantages of owning critical illness insurance.  At first, she had some concern that because her stroke was not that serious and she had recovered so quickly, that her claim might not qualify for payment.  These fears turned out to be unfounded as days after the stroke she received claim cheques for $400,000.

During her recovery period, Christina was fearful of having another stroke which caused her some stress however, she is certain that not having any financial worries during this time aided in her almost total recovery.

These two case studies, although quite different in circumstances illustrate some key points about Critical Illness insurance:

  • A life threatening illness or condition can strike anyone regardless of age or health;
  • Financial security reduces stress which can assist in the recovery process;
  • You do not have to be disabled to be eligible for a Critical Illness benefit;
  • Although you need to be diagnosed with a life threatening illness, you do not have to be at “death’s door” in order to have your claim paid;
  • The benefits are paid tax free to the insured

Call me to see if critical illness is right for you or use the social sharing buttons below to share this article with a friend or family member you think might benefit from this information.

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The Honourable Bill Morneau, Minister of Finance, recently announced the federal budget for Canada for 2016. We've put together an infographic to outline the highlights of the federal budget and what it means for families, retirees and business owners.

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If you have a mortgage on your home, chances are good you also have mortgage insurance. The idea is that if you should become seriously ill or die before paying off the mortgage, the coverage will kick in and pay it off for you. It's meant to offer peace of mind and to reassure you that your family will be able to stay in your home if anything should happen to you.

If you have a mortgage on your home, chances are good you also have mortgage insurance. The idea is that if you should become seriously ill or die before paying off the mortgage, the coverage will kick in and pay it off for you. It’s meant to offer peace of mind and to reassure you that your family will be able to stay in your home if anything should happen to you.

The reality falls a little short of that. In this week’s Marketplace investigation, we meet two families who bought the coverage and thought they were protected, only to have their claims denied when they became sick or died. In each case, the insurer said the applicant person had lied on their initial application form.

It turns out a routine test at the doctor could be reason to deny your claim, if you don’t mention it. Had a cuff inflated on your bicep? That counts as being tested for high blood pressure.

As Erica Johnson reports, the bank staffers selling mortgage insurance are unlicenced and rarely trained to explain the details and legalities of those insurance products. The result is people who pay premiums and think they are covered, only to realize later that they are not.

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