Insurance Needs & Income Protection

  • What will happen to the mortgage on your house if you loose your job?
  • How will you finance your daily expenses if you become disabled?
  • Perform disability, life insurance and other insurance need analysis

This section will help you determine the kinds of risks you should protect your family against. MoneyWI$E Financial Inc. can guide you through the insurance maze, showing you how to decide the coverage you need, and how to get it at a competitive price.

Life is unpredictable, and at times, messy. Car accidents occur, homes are broken into or damaged by fire, and people die before their time or find themselves no longer able to work due to a disability. There’s often little we can do protect ourselves against tragedy. But you can prevent them from also becoming financial disasters with the proper insurance.

Home Insurance: The Basics
Insurance on your house, apartment or condominium is not required by law. If you have a mortgage, however, the financial institution providing the mortgage will probably require you to obtain enough insurance to protect their interests.

Home Office Considerations
A lot of people have offices in their homes these days. Your home insurance policy may not provide adequate protection for this. It is important that you read your policy and talk with your advisor to determine whether you are adequately covered.

Home offices can easily have many thousands of dollars tied up in computers (notebooks or desktops), printers, fax machines, cellular phones, and so on. Your insurer may only cover you for a fraction of their total replacement cost. In addition, many policies severely scale back coverage for equipment you take out of your home, and some offer no coverage at all on laptops. In addition, a business may bring with it liability exposure not covered by your home insurance policy.

Accident and Medical Benefits
This coverage will take care of any medical expenses (above and beyond what your provincial health plan covers) if you are injured in an accident. It will also give you a small disability income if you unable to work due to your injuries, plus pay out a small amount in case of death. This coverage is usually mandatory.

Life Insurance: The Basics
Life insurance is one of those things that most of us don’t like to talk about. After all, buying a policy is like gambling against our own lives. Still, life insurance can provide some unique and valuable financial benefits, especially for those with dependents to support. It is the most effective way to guarantee that your loved ones will be financially secure should you die.

Life insurance also has other uses. Businesses buy "key man" life insurance to compensate for the expense of replacing an important executive, or to help fund buy–sell agreements. And life insurance can be useful in preserving your estate for heirs. At its most basic, a life insurance policy is a contract requiring you to pay an annual premium (usually in monthly installments). In the event of your death, the beneficiaries you designate in the policy will receive the face value of the policy.

Life insurance can be valuable in a number of situations, but it is a complex financial product. The breadth of choice currently available lets you tailor your insurance to your exact needs. You may need some skilled advice to pinpoint those needs and find the best solutions.

How Much Do You Need?
Life insurance can be a unique and valuable financial planning tool, especially when it comes to looking after the needs of your loved ones. Nothing else can provide the same degree of financial security for your dependents. But how much insurance do you really need?

The answer depends on your age and your circumstances. Children, for example, have little need of life insurance, although parents sometimes buy policies in their name as a savings vehicle.

Young singles have little need for life insurance either, except perhaps to cover funeral expenses and any debts not insured elsewhere. Mortgages and car loans, for example, can be purchased with their own insurance protection.

If, however, you have dependents — a spouse, children, or others — then life insurance is often the only feasible way to provide financial security in your absence. The question of how much insurance you need depends on your family’s income requirements.

Life Insurance and Estate Planning
Life insurance can be useful in planning your estate. There are no inheritance taxes in Canada, but when you die, your estate executor must file a final tax return. Normally at this time, all accrued gains on assets like stocks and real estate, and the proceeds of all registered plans (RSPs, RRIFs, LIFs, and certain pensions) become taxable all at once. On large estates the result could be a tax bill close to half the total value of the estate.

Various strategies can be used to reduce the impact of this inevitable tax bill, including life insurance. For example, say you own a cottage and want to leave it to your children. Accrued gains on the property may give rise to such a large tax bill that they are forced to sell. Tax–free life insurance proceeds could be used to cover the taxes instead, so your children can keep the cottage.

Or, say you want to divide your estate equally between three children, but it consists of a $200,000 house and a $200,000 RRSP. Rather than selling the house to accommodate a three–way split, life insurance can be used to pay all taxes and provide another $200,000 bequest. Business assets can also be preserved using life insurance.

MoneyWI$E Financial Inc. consulting fees are $150 per hour. However, you will incur no charges if you purchase a policy through us.

[Empire Financial Group]

Call: MoneyWI$E Financial Inc. at (905) 883 - RRSP(7777)
Fax: (905) 883 - 7778
Address: 120 A Lucas Street
Richmond Hill, Ontario
L4C 4P5 Canada

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