|Insurance Needs & Income Protection|
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
Home Office Considerations
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
Life Insurance: The Basics
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?
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
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.
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