ALERT: ON OR AFTER MARCH 13, 2020 YOUR TRAVEL EMERGENCY HEALTH PLAN MAY BECOME UNENFORCEABLE DUE TO CANADIAN TRAVEL ADVISORY

With life Insurance Comes Benefits

Thu, 29 Apr 2021 15:22:45 GMT

Living Benefits is a clear winner when purchasing your 1st Life Insurance policy

The most obvious reason to buy life insurance is when you have clear insurable interest and have financial protection against a catastrophic accident or illness. For example, you may have large debt obligations from student loans, credit cards, and housing obligations you do not want to be passed on to someone else.

You might also have a partner and/or child who relies on you for financial support. Family members could depend on the insurance claim to survive in the event something unfortunate was to happen to you.

Auxiliary benefit riders that can accompany a well-thought-out life insurance policy targeting young adults between the age of 18 - 35.

• Guaranteed Insurability gives you the opportunity to buy additional life insurance with no underwriting requirement in the future.

• Accidental Death & Dismemberment (ADD) additional payout in the event of death because of an accident, including dismemberment or become blind.

• Renewable and Convertible policy at the time of renewal automatically renews at a new rate based on your age and the opportunity to convert to a permanent policy at a new level rate.

• Waiver of premium allows you to stop paying premiums in the event you become disabled.

You can purchase other living benefits as a rider or standalone policy. Living benefits create a greater sense of urgency when your decision to purchase is contingent upon a particular purchase such as a mortgage or new automobile.

1. Creditor insurance - is used to secure a line of credit with a bank or to cover the purchase of your first mortgage in the event of death the insurance paid the debt obligation and or with disability included paid the monthly obligation.

2. Critical Illness insurance - provides a lump sum payment to offset the cost of recovery.

3. Accident & Sickness - provides monthly indemnity for being hurt in an accident or recovering from an illness.

The purpose of living benefits is to give you as the policy owner the foresight to react to select unforeseen financial mishaps that may come your way and feel confident in knowing your policy will trigger a positive response to weather whatever storm comes your way.

Here is the thing, Life insurance when designed properly is about giving you the financial ability to live out your life to the best of your ability regardless of the health risks that lie ahead notwithstanding the possibility of death again in choosing to purchase a life insurance policy you have met that challenge as well.

Critical Illness A Life Policy for Today

Thu, 29 Apr 2021 14:59:50 GMT

A Life insurance policy with critical illness coverage provides a lump-sum payment to policyholders who survive one of the critical illnesses listed in the policy.

1 out of 3 Canadians will be diagnosed with some form of critical illness. Critical Illness is a defined disease or illness in a state in which death is possible or imminent.

The initial sign you are experiencing a critical illness is when you get rushed to the hospital and admitted into an intensive care unit and placed on life support because of complications of a severe illness that manifests itself in one or more of the following conditions;

1. Heart attack

2. Stroke

3. Respiratory complications

4. Infectious disease such as a rash

5. pneumonia

The common denominator in all these emergency conditions you are being hospitalized for awhile and if the prognosis worsens your hospital stay will increase and/or you succumb to your critical illness and die.

Critical illness insurance provides for a lump sum payment after a survival period beyond 30 days based upon the confirmed diagnosis of a listed critical illness in the policy a tax free benefits is paid to the survivor to help offset any costs associated with that specific illness during his/her recovery period.

There are up to a maximum of 26 defined illnesses that could be listed depending upon the type of policy you choose

Q: Who decides how much money is to be paid out?

A: The policy owner determines the lump sum tax free benefit that would be paid out.

Q: How is the monthly premium determined?

A: The premium is determined by several factors

• Age

• Gender

• Smoker

• Family history

• State of health

• Amount of lump sum

Q: What type of critical illnesses are covered in a policy in general?

A: The number of critical illnesses listed in a policy depends on the type of policy you purchase. In a comprehensive policy the following 26 illnesses would be covered in Canada;

• Acquired brain injury

• Aortic surgery

• Aplastic anemia

• Benign brain tumor

• Bacterial meningitis

• Blindness

• Cancer

• Coma

• Coronary artery bypass surgery

• Deafness

• Dementia, including Alzheimer's disease

• Heart attack and strokes

• Heart valve replacement or repair

• Kidney failure

• Loss of independent existence (LOIE)

• Loss of limbs

• Loss of speech

• Major organ transplant

• Major organ failure on a waiting list

• Motor neuron disease

• Multiple sclerosis

• Occupational HIV infection

• Paralysis

• Parkinson's disease and specified atypical parkinsonian disorders

• Severe burns

Cancer, Heart Attack and Stroke are the most frequent type of critical illness claims accounting for over 85% of all claims in Canada.

Cancer and Cardiac coverage are frequently combined together as a stand alone policy excluding all other coverages and issued without a medical examination you just have to answer a few yes/no questions. You must answer No to all questions if Yes the application is declined.

Critical illness is not a substitute or replacement for disability, rather a complimentary tax-free benefit that helps supplement a person’s disability income during those first few months of his/her recovery.

Critical illness benefits show up in various employee benefits plans in other instances as a term rider in a Life insurance and/or a stand alone policy.

Critical Illness Insurance and Long-term Care benefits

Critial Illness benefits are used to pay for Long term care facilities and home care assistance as well offering an alternative to Long-term Care insurance.

Very few insurers today provide for Long Term Care insurance which would virtually do the same thing as a critical illness policy whereupon the diagnosis of loss of independent living or dementia the insured would receive a tax-free lump sum payment to go towards the cost of staying at a long-term care facility or provide for home care assistance while remaining in your own home; hospitalization and associated medical expenses could be covered as well.

In the case of Homecare insurance the duration of the monthly benefit payments us dependent upon a deductible and premiums paidassociated with the benefits tied to the Long-term Care policy contract.

Traditional life insurance provider will include a compassionate clause within the policy that

will offer to payout up to 50% of the life insurance coverage if the insured is diagnosed as terminal and is expected to die within the same year.

Whole life policies that have dividend cash value and Universal life fund value policies also include a compassionate clause in additional permit tax-free cash withdrawals to support the life insured during a period of critical illness.

Other optional benefit available on Permanent Critical Illness Policies

• 50% return of premium if after a minimum of 10 years of age 65 whichever the greatest; the policy owner can cancel the policy and request a return of premium

• Policy paid up within 20 years

• Term conversion to a permanent policy

• Increase cover over the life of the policy

How long a critical illness policy lasts depends on the term purchased. It could be for 10, 20, 30, or life. The duration of the policy will have an impact on the premium paid. Also, a note about critical illness can only be purchased up to age 64 where for CAD 100,000 a lump sum benefit will cost a healthy 64-year-old male $4,000 in annual premium.

The risk of developing a chronic critical illness is real amongst all adult age groups. The Canadian Chronic Disease Surveillance Systems (CCDSS) estimates that 2.4 million Canadians aged 20+ will live with a diagnosed heart disease. The Canadian medical association journal reported back in 2015 1in2 Canadians are expected to develop cancer during their lifetime. CMAJ expects 225,000 new cases of cancer in 2020. The insurance industry has reported that 85% of all critical illness claims are shared between cancer and cardiovascular diseases.

Life insurance plays a major role in preparing chronic disease survivors for whatever come next Not only does Life insurance allow you to preserve your standard of living for your loved ones at a time of death by also including critical illness you will be paid directly a living benefit in the form of a tax-free lump sum payment of your choosing to allow yourself the time away from work in the event of a chronic critical illness to recover.

FAQ

Q: Have you heard that many critical illness insurance claims are being rejected, is this true?

A: As an industry, I would indicate that there may have been on occasion a false claim that was not paid however that would be the exception and not the rule. All legitimate claims are paid out in full. If you are uncertain about a particular plan, check with your independent broker before purchasing any form of life insurance policy

Q: Are there any thing I need to be aware of when considering critical illness insurance?

A: Before applying for insurance assess your current health status, your financial ability to withstand a critical illness, and consult with a licensed advisor to help you assess your initial approach to critical illness.

Q: Why should I consider critical illness insurance?

A: The financial burden placed on your family in the event of a critical illness.

Q: What is covered under a critical illness policy?

A: Not all policies carry the full list of critical illnesses, be sure to check before you apply for a particular policy.

Q: What is a good amount of critical illness coverage?

A: Only when you know your financial situation with proper consultation with an advisor you will determine what amount is appropriate.

Q: Does critical illness coverage pay off your mortgage?

A: Critical illness lump sum payment is designed to provide financial assistance while going through a recovery period if making mortgage payment during that period yes.

Q: Which is the best critical illness policy?

A: There is no such thing as the best policy, some policies are specialized and others cover the full list of critical illnesses and not all illnesses are considered critical and would not be covered under a policy.

In the final analysis critical illness insurance financially enables you to face and conquer any catastrophic storm that may or may not come your way and reaffirms the confidence within yourself and family moving on at that point in life.

Canada Education Savings Program

Thu, 29 Apr 2021 14:35:50 GMT

Canada Education Savings Program (CESP)

Canada Education Savings Program (CESP) is an opportunity for parents in Canada to start saving for their child’s post-secondary education from the time the child is born until age 17. The Government of Canada has reported more than $63.0 billion in registered education saving funds at the end of 2019 with $5.0 billion contributed in that same year.

Assess to post secondary education is a high priority for most Canadians with more than 7 million children are registered in the CESP where more than 53% of those children are currently receiving benefits to pay for their education.

CESP provides2 separate forms of subsidy a Basic Grant and Additional adjustable Grant

1. CESG Basic Grant – available to all families regardless of income level that provide 20% on each dollar spend for a maximum contribution $50,000 toward a child’s education over a 17 year period and receive $7,200 in grant money from the CESP.

2. CESG additional adjustable Grant - available to families whose yearly income is less than $49K and adjusted for the number of children in the family where that incomenot exceeding $95K can receive an additional 10% or 20%. The maximum CESG benefit combines Basic + Additional adjustable grant per child for a lifetime benefit of $7,200

Registered Education Saving Plan (RESP

In order to qualify for CESG program your child must have a social insurance number and be registered with a RESP provider in Canada. There are a number of providers you can setup your RESP and submit your application to CESG on your behalf

• Not all Insurance companies can setup RESP the 2 insurers recommend Industrial Alliance and Manulife both carriers can also if require provide financial assistance

• Most Banks in Canada will setup a RESP for your and include financial assistance

• Most mutual fund companies connected with banks and insurance companies will provide mutual fund RESPs and in some case provide DIY support

• Group RESP providers such as Heritage Scholarship Plan and CESP

Setting up a RESP you will need to commit the contractual obligations for the duration of the RESP to maturity prior to your child getting registered with a recognized post secondary institution; failing to meet your commitment will result and cancellation fees and withdrawal charges.

FAQ:

Q: Who can setup a a subscription as a contributor to a RESP for my Child?

A: Just about anyone can purchase a subscription and make your child the beneficiary

Q: How much should I pay into a RESP?

A: You can pay what you can afford up to a maximum of $50,000 over a 17 year period for your child.

Q: How much would I receive to pay for my child education after 17 years?

A: That answer would vary depending on where the money was being invested over the 17 years but to give you some idea if you assume: 3% guaranteed rate of return based on the $57,200 (Capital +CESG)

A Estimated net market value $89,905 (Note: this is for illustration purposes only)

Q: What type of investments go into a RESP?

A: That will depend on the RESP provider you choose; (stocks, bonds, CD, segregated funds or mutual funds)

Q: What happens RESP if my child does not go to school?

A: You will have the following options;

a. If you plan has the family option attached the CESG can be forwarded to the child(s) on the plan

b. If a individual plan you can name another child to the plan

c. If your child is 21 years of age and the plan has not been used you can withdrawal the earnings less taxes if not transferred to another RESP the monies withdrawn will be considered taxable income any CESG will be refunded to the government.

Q: How much do I need to pay each month to setup a RESP?

A: Pay what you can afford each month and receive +20% grant to go towards your monthly contributions. You an also do a lump sum contribution.

Q: Who is considered the beneficiary / subscriber of a RESP?

A1: The beneficiary is the child who will benefit in the future by the contributions made

A2: the subscriber / Plan holder is the contributor to the RESP

Q: Are RESP contributions tax-deductible?

A: If you contribute to an RESP you won’t get a tax deduction, but when the student you’re saving for withdraws money from the plan for school, any investment growth in the plan will be taxed as that student’s income rather than yours – which can be a significant tax savings.

Q: Can you transfer RESP to a RRSP if the child does not go to school?

A: If the named beneficiary doesn’t use some or all of the money in the RESP, you can transfer the contributions and earning to a RRSP refunded back to the Government of Canada.

Q: How do you withdraw money from an RESP?

A1: The RESP provider will provide guidance how /when the monies can be withdrawn. You will have to provide proof that the beneficiary is enrolled in a qualifying post-secondary educational program, and you may have to provide receipts for expenses such as books and laptops.

A2: Payments from the interest earned by an RESP, plus CESG are limited to $5,000 during the first consecutive 13 weeks of enrollment; after that you can request any nominal amount.

A3: You can withdraw as much of your own contributions to the plan as you wish at any time.

Permanent Life Insurance Considered an Asset Class Equivalent Investment

Thu, 29 Apr 2021 14:27:40 GMT

Permanent life is preferable to term insurance by 2:1 high- net-worth Canadians taken in an Ipsos poll study in 2016 by Sun Life

High-net-worth Canadians prefer permanent life insurance to term insurance-worth taken in an Ipsos poll study in 2016 by Sun Life

1. Why would a high-net-worth individual want to purchase life insurance?

Response: high-net-worth (HNW) earners see Permanent life insurance as an investment; to guarantee a stream of tax-free income upon death to support their loved, ones who depend on the paternal income for continued financial support and to allow for generational transfer of continual capital growth of net worth without interruption to be managed as part of the overall family estate

2. Okay, but why Permanent and not Term?

Response: Term insurance is preferable to permanent if purchased for a specified need and time, as with a 25 year amortization period mortgage; unless you die within that time frame, the insurance will end. Whereas you purchase Permanent insurance at a level premium for life, along with the cash value and dividends accumulation, you own the policy. The permanent policy only ends when the policy owner dies or surrenders the policy for its surrender cash value.

3. Weigh in on the pros and cons of paying a higher premium for Permanent insurance?

Response: Advantages of Permanent Life option:

a. Premiums are level

b. You can pay premiums to allow the policy to be paid up over a set period

c. Owning permanent life insurance; you generate tax-free earnings within the policy to cover unforeseen health concerns such as critical illness and long-term care

d. Tax-free investment vehicle; choice of investment portfolio and earned dividends from participating life policy

e. Ability to allow your whole life policy to be a spousal /dependent testamentary trust

f. Under Canadian succession laws, a life policy bypasses rebate fees provided the policy did not list the estate as the beneficiary.

g. Under Canadian law, you can set up an Insurance testamentary trust and have a Trustee manage the trust for a limited period on behalf of the dependents before disbursements.

h. A permanent policy can provide for term riders geared to specific needs over a set period, then end.

i. Ability to leverage the cash value within the policy for a personal loan

Response: Disadvantage of Permanent Life: exercising an option to cash in on the surrender of the policy and allow it to lapse in doing so several factors will affect the early surrender value of the policy;

a. How long the policy has been in force and the total amount of premiums paid to date

b. The amount of interest, dividends, and capital gains that the cash value has earned in the policy

c. The amount of cash surrender fees the insurance company will need to assess to liquidate the policy

d. The portion of the cash surrender that is the actual premium paid is not taxable, but that portion of the surrender value classified as dividends, interest, and capital gain is taxable earnings.

All the factors taken together by the surrender cash value of the policy will be less than the actual cash value if taken out too soon. It is best advised to exercise other options to avoid an early surrender of the policy, such as a policy loan already mentioned under the advantages.

CORVID-19 Insurance related coverage will be triggered if you become sick with a coronavirus respiratory illness while travelling abroad

Fri, 03 Apr 2020 17:41:53 GMT

2 insurance policies are triggered due to COVID - 19

There are 2 coverage components of your Travel Insurance Plan you need to read closely which will have a direct impact while travelling outside of your province prior to March 13, 2020 when the Canadian Government placed travel restrictions on Canadian looking to travel abroad.

1. Travel Insurance Plan:

Medical emergency - in most policies all related expenses related to emergency medical costs as well as emergency evacuation if need be will be covered .
Trip cancellation/interruption - if you planned a trip scheduled after March 14, 2020 and had to be cancel due to COVID-19 you will be refunded 100% and if you were aboard prior to March 14, 2020 and instructed by Canadian government to return, you can expect a prorated refund for early return.

The other insurance policy has to to with income replacement Short Term Disability Plan a private income replacement plan and / or Employment Insurance (E I) which is mandatory coverage by the Canadian government paid as a payroll deduction by you if you are an employee.

2. Short Term Disability Plan:

if you test positive and become ill with the COVID 19 you can receive as much as 75% of your weekly earnings to a maximum amount depending on the type of short term coverage listed in your policy. Payment will continue upon until you recover or a maximum period of 8 weeks

if you are expected to remain in your home to recover you can expect the same benefits

If you become critically ill and not able to return to work after 8 week period you may be eligible for Long Term disability (LTD) depending on the severity of your illness and the type LTD arrangement you have with your employer or self-employed a private plan. In all cases contact your employer and check your employee benefits package for details for your specific situation. If you are self-employed check your disability policy and/or contact your advisor.

To make a Short-Term Disability Claim due to COVID – 19 pay close attention to this recent notice regarding claims to your employers

Making a Short-Term Disability Claim due to COVID – 19

Due to the extraordinary circumstances surrounding the Coronavirus pandemic the Canadian Life and Health Insurance Association (CLHIA) have worked through a coordinated effort in cooperation with all employee health benefits carriers have designed a distributed a Plan Confirmation of Illness Form see attached that can be used to submit a Short Term Disability (STD) claim provided by you the employee (plan member) to apply to your company's employee group benefits plan is due to Coronavirus disease. It is important to note that all insurers in Canada will accept this form in order to initiate a claim in connection with the COVID – 19

The current COVID 19 has been classified as a pandemic outbreak world wide creating travel insurance ban in Canada

Fri, 03 Apr 2020 17:41:44 GMT

ALERT: ON OR AFTER MARCH 13, 2020 YOUR TRAVEL EMERGENCY HEALTH POLICY MAY BECOME UNENFORCEABLE IN ACCORDANCE TO CANADIAN TRAVEL ADVISORY

Given the current and constantly evolving COVID-19 situation throughout the world, all insurers are advising all Canadians currently outside boarders to follow the Government of Canada’s recommendation to return to Canada as soon as possible.

Not taking all of the necessary measures that are presently available to return to Canada could have a negative impact on your health and on your insurance coverage.

• By delaying your return, transportation options could become even more limited or non-existent and you will put yourself at greater risk staying abroad.

• The health care system in many countries is expected to experience a dramatic increase in demand and you may not be receive the health care if needed as their own citizens will receive care priority.

• In addition, your insurance company may not be able to give you assistance or any service outside Canada if the COVID-19 situation becomes overwhelming abroad.

• During this unprecedented time, your assistance/insurance company may not be able to repatriate you since the border will be closed and Canadian health facilities, which are similarly expected to see a dramatic rise in care demands, will prioritize own citizens as similar in other countries.

In accordance with the Canadian Travel Advisory, if you are already outside Canada including the USA and choice to remain abroad this could change or complicate your travel health insurance coverage. Particularly as it relates to COVID 19 a possible lose of coverage along with other conditions. Check with your Insurance provider they may only give you 10-day notice before placing limits on your insurance policy. It is important to read the fine print carefully. If you do not understand the wording or clauses within the policy check with your travel insurance advisor to get the current updates regarding COVID – 19 and how it affects your coverage today!

The Beauty of the Hunt for Insurance

Sat, 01 Jun 2019 12:05:11 GMT

Purchasing an Insurance Policy online

The beauty of searching online for insurance you are able to obtain a wealth of information from various sources without interruption and at your own pace.

You can compare and seek out rates from different types of insurance coverage, Life, Disability, Critical Illness, Healthcare and Travel to name a few.

You can determine why rates are different based on various factors such as health related issues, duration of policy, type of additional benefits know as additional riders. All these factors go into helping explain the difference in premium rates.

You will further learn why rates are different based on the duration of a certain policy such as Term Vs Permanent and why Universal Life Policies based on investment and savings options will alter the premium rates based on your personal choice.

Having information first hand why insurance policies differ can help you better appreciate why premium rates can vary not just the type of policy based factors such as gender, age and state of health plays a major role in determining rates as well.

Now that you have a base knowledge about insurance in general and how rates can vary, you can now go online to look up coverage not just for yourself but for family members and close friend as well in assisting with their respective rates without guessing and doing false comparison based verbal hearsay. Having access to quoting helps you become a better informed buyer.

There is one reservation that must not be overlooked when looking to purchase a policy online; premium quotes are actuarial calculations based on four primary factors: age, gender , duration, amount of coverage and the underlying health risk. In the case of a standard Online Quote does not take into account the underwriting analysis and the collaboration that takes place between the underwriter and advisor that is typically brought back to you prior to applying online could overt a possible risk of being rated or worst declined and creating complication in not being able to apply for the same type of policy insurance for at least 2 years including being red flagged with the Medical Insurance Bureau (MIB) of Canada.

Recall back in a day long before all things internet came along, an insurance agent would come knocking on your door to see if you were interested in buying a Life Insurance Policy on the spot. By contract today consumers are well informed buyers able to investigate online and do some research on your own, reviewing various benefits including comparing premium rates from leading insurers before speaking with an insurance advisor.

This truly is a beautiful and tremendous breakthough for the insurance industry and especially on the part of a more enabled conscientious buyer who takes a more need based approach in the case of purchasing a Life Insurance policy rather than being drawn into a sales driven approach based only on raw emotions.

Employee Financial Wellness and Its Impact on Canadian Businesses

Tue, 19 Jul 2016 17:28:36 GMT

No matter what business you’re in or how many people work for you, your employees are likely among your key assets. Your business probably wouldn’t be successful without them. And your business functions best when they are at their best.

Through research carried out in 2014, Manulife has established that there is a strong relationship between personal financial wellness, physical and emotional health, and productivity. We are of the view that to keep employees engaged, and to keep productivity optimal, employees need to be physically and emotionally healthy, and they need to be financially well, too.

In 2015 Manulife commissioned Environics Research Group to survey 2,004 individuals to gain a better understanding of Canadians’ financial wellness levels. The results were eye opening.

The survey showed that while 28% of respondents felt they had a high level of financial wellness and just over one-quarter (27%) felt they had a medium level of financial wellness, almost half (45%) identified themselves as having a low level of financial wellness. This alarming statistic manifests itself in numerous ways, including a lack of retirement readiness, inadequate financial protection in case of unforeseen events and high levels of money-related stress.

Digging deeper into the segment of respondents with a low level of financial wellness, nearly half (45%) of them felt distracted at work because of financial worries. Our previous researchi has identified that distracted employees, or employees who are not engaged in their work, have lower rates of productivity, which can negatively affect business’ bottom line. This leads us to believe that disengaged employees are also less attached to their organization and therefore more likely to be lured away by other employers, which increases a company’s costs for employee searches, hiring and training.

Financial support and education, well beyond retirement education, could go a long way toward improving the financial wellness of your employees. That means helping employees holistically – from savings to debt to insurance. For some employers, the workplace can be an ideal spot to deliver the tools that allow employees to achieve improved financial wellness for themselves, thereby becoming more engaged in their work and boosting the bottom line of the organization they work for, too.

MANULIFE’S FINANCIAL WELLNESS STUDY – BENCHMARK 2015

In early July 2015 Environics Research Group surveyed 2,004 Canadians, 18 and over, asking them about six segments

of their financial life: budgeting, retirement, investments, debt, protection and stress. Respondents were equally split along gender lines, the mean age was 47, and quotas and weighting were used to ensure that results reflected the Canadian distribution in terms of age, gender and region.

The 2015 survey was designed as a benchmark and is intended to be repeated annually to create an informative index to track financial wellness over time.

What is Financial Wellness?

Financial wellness is not measured by the amount of money in a person’s investment accounts or the years they have left to pay off their mortgage. A person who has a high level of financial wellness is confident about a wide range of issues that make up their financial life, including budgeting, retirement plans, investments, debts and insurance.

It’s quite possible for a person to have a high income but a low level of financial wellness. It could be that these high earners aren’t planning for the future, they’re not working toward paying off their debts or they’re constantly worried about money.

Conversely, it’s quite possible for a person to have a lower income and a high level of financial wellness. A young person who is just starting out in their career, for instance, isn’t earning a high salary but can feel confident about their finances because they’ve educated themselves, asked for advice, created a workable budget and started saving for retirement.

Our survey found that financial wellness seems to have some momentum to it. If a person demonstrated a high level of financial wellness in one area they tended to have a high level of financial wellness in the other areas as well.

For instance, among the respondents who had an overall high level of financial wellness, 99% also scored well for budgeting, 61% scored well for retirement planning, 100% scored well for debt management and 76% scored well for stress management.

This shows that once a person has committed to addressing one aspect of their financial life, they will likely address the others as well, resulting in overall good financial health. Employers benefit from helping their employees get educated about finances and making that first step toward financial wellness because, as a result, employees will become less anxious about money and more engaged at work.

Benefits and consequences of high and low levels of financial wellness

The benefits of a high level of financial health can be both concrete and more abstract. A concrete benefit, for example, is having a well-funded retirement savings plan due to diligent budgeting and taking advantage of appropriate investment vehicles over a long time horizon. A related abstract benefit is feeling little to no stress about retirement.

Another concrete benefit is having few debts, an actionable plan to pay down debts or having manageable mortgage debt, which will one day result in outright home ownership. A related abstract benefit is, again, fewer financial worries and more overall confidence.

Consequences of a low level of financial wellness are, similarly, concrete and abstract. Poor budgeting and investing, among other factors, can lead to a poorly funded retirement savings plan and the accompanying stress. Inadequate insurance coverage can mean financial hardship if an accident, death or disability occurs, as well as the accompanying worry about such unforeseen events happening.

Another consequence of having a low level of financial wellness is that it can be a self-fulfilling prophesy. Just as people who were found to have high levels of financial wellness tended to score well across all survey categories, people who have low levels of financial wellness tended to score poorly across most categories.

According to the survey, 73% of respondents with an overall low level of financial health also scored poorly for retirement planning, and only 27% of people with a low level of financial health had a medium score for retirement planning. No one with an overall low level of financial health scored well when it came to retirement planning. It’s not surprising that 85% of respondents who have an overall low level of financial health also ranked “poorly” for insurance protection and 63% indicated they had high levels of finance-related stress in their lives. Based on this, that stress can lead to anxiety and poor mental health, which takes a toll at home and in the workplace, through disengagement and lack of productivity.

Snapshots

The Environics survey allows us to take a focused look at who has a high level of financial wellness and who has a low level of financial wellness across a broad spectrum of the Canadian population, and to zero in on Canadian workers.

For the first time in history, our working population includes five generations of Canadians, ranging from Generation Z to Baby Boomers. These people are at dramatically different stages in their lives and their careers, with different priorities at the top of their lists, and it can be challenging for a workplace to cater to everyone’s financial needs.

AGES AND STAGES

The differences among respondents become evident when reviewing how people of various ages and life stages tend to feel about their financial wellness. Those who felt they had a high level of financial wellness increased steadily from 14% of those under 25 years of age to 40% of those over 65. And those who felt they had a low level of financial wellness decreased from 55% among those under 25 years old to 30% for those over 65. These progressions are promising because they show that as people age they become more financially secure due to factors such as increased salaries, more financial education, decreased debt and better retirement readiness. The progressions are also logical: It would be unrealistic to expect a 22-year-old, just starting out in their career and independent financial life, to have the same level of financial wellness as a 66-year-old does. In fact, it’s likely that the same 22-year-old who identifies herself as having a low level of financial wellness will show that she has a higher level of financial wellness by the time she reaches her 60s.

We are of the view that one of the best ways to help young people who self-identify as having a low level of financial wellness is to give them access to a broad financial education. If they become adept at managing savings, debt, investments and insurance, they will be in a better financial position when it comes to saving for retirement as well.

Following the pattern outlined above, when surveyed specifically about financial planning and saving for retirement, the survey found that the youngest respondents were least likely (8%) to agree with the statement: I’m saving on a regular basis and I’m on track to reach my retirement goal. Among respondents over age 65, 33% agreed. It’s a positive trend to see growth in the number of people feeling secure about their retirement, but younger people have the benefit of longevity and compound interest to make their savings grow, and should be advised to get more involved in long-term financial planning as soon as they enter the workforce. It’s also important for those in the older cohorts to not be complacent about their financial wellbeing. The research showed that people tend to have higher levels of financial wellness as they mature, but unexpected life circumstances – such as divorce or a job loss – could reverse that.

Lifestyle also had a bearing, as respondents who were married or co-habiting were more than twice as likely (23%) to be saving and staying on track for retirement as their single counterparts (11%). Also noteworthy was that respondents who owned their home were more than twice as likely (26%) to say they were saving and on track for retirement as people who rented their homes (11%).

GENDER

Across the board, the survey found that men self-identified as having higher levels of financial wellness than women. However, past research conducted by Environics shows that men tend to report higher levels of confidence than women, so their answers need to be viewed against that background. Overall, a high level of financial wellness was indicated by 32% of men, versus 25% of women.

On the topic of financial knowledge, 32% of men said their level of savings and investment knowledge was beginner, versus 50% of women. When asked how ready they were to improve their financial situation, slightly more women than men said “very.” And when it comes to confidence, 74% of women agreed that they would “like to be more confident about making financial decisions,” while only 66% of men had the same response.

Additionally, 74% of women agreed that they worry about their financial situation and 34% of them agreed that financial worries caused them stress at work, versus only 66% of men worrying about their situation and 31% of them saying it affects them at work.

These findings lead us to believe that all employees would benefit from improving their financial knowledge, in the workplace or elsewhere. Women may be more receptive to the offer while men may require some persuasion to recognize how additional education and support could benefit them.

GEOGRPAHY

Across the country, the most regional differences were seen when comparing Quebec to the five other regions (Atlantic Canada, Ontario, Manitoba/Saskatchewan, Alberta and British Columbia). The Quebec residents who were surveyed were least likely to indicate they felt finance-related stress (51% scored “good” on the survey’s stress index, versus 47% for all respondents) and they indicated they had higher levels of financial wellness related to debt, with 88% scoring “good” on the survey’s debt index, versus 82% for all respondents. However, respondents in Quebec scored second lowest in the retirement index, with only 16% feeling retirement ready, versus 20% for the rest of the country.

Another outlier was British Columbia, where the cost of housing in Vancouver and the Lower Mainland has become increasingly unaffordable in recent years. Only 22% of British Columbians surveyed indicated a high overall level of financial wellness (versus 28% for the country as a whole) and 24% scored “poorly” on the debt index, compared to 18% for all respondents. Specifically, the survey found that only 32% of respondents in British Columbia indicated that they have debt and are able to pay it down, compared to 40% of all respondents.

Finance related stress Financial wellness related to debt

51% 88%

of Quebecers scored “good” of Quebecers scored “good"
on the survey's stress index on the survey's debt index

47% 82%

of all respondents scored “good” of all respondents scored “good”
on the survey's stress index on the survey's debt index

INDUSTRY

More financial support and education would benefit all employees, but the survey found that respondents who had low levels of financial wellness tended to work in trade (retail and wholesale) (12%), accommodation and food services (8%), business, building and other support services (7%) and transportation, warehousing and utilities (6%). Respondents who indicated they had a high level of financial wellness were more likely to work in professional, scientific and technical services (12%), manufacturing (10%) and education (10%). However, no one sector stood out as having a high level of financial wellness. Even within finance, insurance and real estate, where one could reasonably expect to find well-educated, financially aware workers, 36% indicated they had a low level of financial wellness. The survey also found that people who had a high level of financial wellness were more likely to be managers (26%) or professionals (25%).

ADDITIONAL CHARACTERISTICS

The survey revealed some additional, and troubling, insights about the people who identified themselves as having a low level of financial wellness. People with a low level of financial wellness indicated that they are more focused on short-term issues than long-term ones.

For example, the top financial priority for the 45% of respondents who were found to have poor financial wellness was paying off debt, with 58% of people in this cohort citing that as their main focus. That compares with only 26% of people with a high level of financial wellness. It’s undeniable that paying off debt should be a priority, but for this segment it seems to be taking precedence over big-picture plans, such as saving for retirement – which was a priority for only 14% of these respondents. It was also noteworthy that among all survey respondents, saving for short-term needs (such as buying a car or funding a vacation) was the second-highest priority, after paying down debt, and planning for retirement ranked sixth. People with a low level of financial wellness also indicated that creating an emergency fund was high on their list of priorities, with 33% of people working toward that goal versus 12% of the people who were more financially secure.

On the other hand, people with a high level of financial wellness indicated that their top two financial priorities: ensuring that their savings are wisely invested (45%) and minimizing the income tax that they pay every year (35%). People with a low level of financial wellness also seemed less interested in educating themselves about finances than did their peers with a higher level of financial wellness. According to the survey, only 12% of people with poor financial wellness visit investment-related websites, versus 34% of people who are financially healthier and 22% of the respondents overall. Finally, the study revealed a correlation between do-it-yourself investors and people with a low level of financial wellness. Specifically, 66% of people with poor financial health agreed with the statement “I prefer to manage my finances myself and not rely on an advisor.” Only 48% of the people with a high level of financial wellness indicated they felt the same way, suggesting that having guidance and advice are linked to financial security.

Of respondents with poor financial wellness:

58% said their top financial priority was paying off debt
14% said saving for retirement was a top priority

Deep dive into financial wellness

The Environics Research survey unearthed a wealth of information about Canadians’ habits related to various aspects of their financial lives: budgeting, retirement, investments, debt, insurance and stress.

BUDGETING

The good news is that fully 87% of respondents said they have a budget, which simply means that they keep track of income and expenses. Not surprisingly, more people with a high level of financial wellness have a budget (95%) versus those with a low level of financial wellness (81%).

However, having a budget isn’t the same as sticking to it. While 86% of people agreed that they usually spend within their means, only 73% of those with a low level of financial wellness were in that camp, versus 99% of people with sound financial health. In terms of age, people in the older cohorts indicated they would be more likely to stick to their budget: 84% of people 35 to 44 years old said they spend within their means, while the same was true for 86% of people 45 to 54, and 89% of people 55 to 64. People 65 and older were the most likely to stick to their budget, probably because they’re most likely to be on a fixed income, with 93% reporting that they spend within their means.

RETIREMENT

Canadians are living longer than ever before. The current life expectancy is 78.8 years for men and 83.3 years for women. But people who reach age 65 tend to have even greater longevity: men can expect to live another 18.5 years, to age 83.5, and women can expect to live another 21.6 years, to 87.6 years.

That means people can spend more years in retirement – sometimes more years than they spent in the workforce. This is why retirement needs to be a top priority for all Canadians, even though the study found that retirement is still more than 10 years away for two-thirds of non-retired respondents.
Therefore, it’s troubling to find that 35% of those aged 25-64 are not saving for retirement. This finding is inextricably linked to the fact that more people said they were saving for short-term goals and paying down debt than saving for their retirement years.

Overall, only 19% of people surveyed said they were saving on a regular basis and were confident about meeting their retirement goals. And 44% either said they were not saving on a regular basis or didn’t know whether they were on track to meet their retirement goals. At almost 50% of respondents, this is a very large group of people who might not have a secure retirement ahead of them. The largest cohort of people who indicated they were not saving – at 50% – was people under 25 years of age. When asked for the main reason why they’re not saving, 43% of people under 25 indicated that it was too early to start saving. However, today’s young workers can benefit greatly from understanding that they have longevity on their side. If someone invested $5,000 a year from age 25 to 40, and then didn’t add to their investment account for another 25 years, assuming a 5% rate of return, they would have about $130,000 more money at age 65 than if they started saving the same amount when they were 40.

19% saving on a regular basis and confident about meeting their retirement goals

INVESTMENTS

When it came to investments, 67% of survey respondents agreed that their savings were invested in a way that was right for them – with 21% saying “definitely” and 46% saying “I think so.” But 11% didn’t know if their savings were invested correctly for them and almost one-quarter of respondents (22%) had no savings at all. People who work in finance, insurance and real estate showed the most confidence in how their savings were invested (45%), and people in wholesale or retail trade were most likely to say they had no savings (35%).

22% of Canadians had no savings at all

DEBT

While it seems to be universally frowned upon, not all debt is bad. Mortgage debt, for instance, which is paid down monthly until outright home ownership is achieved, usually after the property has appreciated in value, is good debt. Car loan debt is neutral, with the understanding that cars depreciate over the years. And credit card debt – often coupled with double-digit interest rates – is not good debt.

Overall, 56% of Canadians have some kind of debt, whether it be good, bad or neutral. Fewer people who identified themselves as having a high level of financial wellness have debt than people with a low level of financial wellness (37% versus 69%), and people in Atlantic Canada (63%) were most likely to have debt. Among those with debt, 71% said they were able to make their payments with no difficulty. The other 29% of the population either indicated they had difficulty making their payments or didn’t know if they could. That means, in total, 16% of Canadians (29% of 56% of people with debt) are not managing their debt well and likely feeling stress related to that.

To further illustrate poor debt management skills uncovered by the survey, 49% of respondents who are struggling to pay their debt said that in the past 12 months they have not paid their credit card balance in full every month, 46% said they were not able to make some debt payments on time and 46% said they were not able to reduce their overall debt.

46% said they were not able to make debt payments on time
46% said they were not able to reduce their overall debt

PROTECTION

Canadians are still not creating enough financial protection for themselves and their families, which can lead to stress in the short term and financial hardship if the unexpected were to happen.

Fully 43% of Canadians said they were not financially well, or didn’t know whether they were financially well, if they, their spouse or dependents were to die. Additionally, 40% responded the same way when asked whether they were prepared if they, their spouse or dependents developed a serious illness and 43% responded the same way about a disability. This means that almost half (42%) of Canadians are living precariously, possibly just one diagnosis or accident away from financial insecurity.

Once again, an overall high level of financial wellness was most closely correlated with feeling prepared for the unexpected. People with a high level of financial wellness were more likely to say they would be prepared in case of death (68%), serious illness (57%) or disability (53%) than people with a low level of financial wellness, who scored 12%, 6% and 6% respectively, for the same questions.
More than half of survey respondents (56%) do not have a will, and 66% do not have a power of attorney. Being unprepared for their own end-of-life decisions could be stressful for these individuals and will most likely have a negative impact on those closest to them.

56% of the population do not have a will
43% of Canadians said they were not financially well, or didn't know whether they were financially well, if they, their spouse or dependents were to die

STRESS

Feeling pressure and stress over financial matters is very common. Seventy per cent of people surveyed agreed that they worry about their financial situation often or sometimes, and 33% of overall respondents said that worry distracts them at work.

Among people who had a low level of financial wellness, 85% worried about money often or sometimes, which was almost twice as many as the people who had good financial health. And almost half of the people with poor financial health (45%) said that their financial concerns distracted them at work, versus only 17% of people with a high level of financial wellness.

When people are able to take control of all aspects of their financial lives – not just retirement planning – their finance-related stress will decrease. And by improving their overall financial health, their retirement prospects are likely to be enhanced as well.

45% of the financially unwell said that their financial concerns distracted them at work

Financial advice

The value of good financial advice from a credible source is both tangible and intangible. The tangible aspect is witnessing the funds build up in an investment account after acting on the advice of a financial advisor. The intangible aspect is the feeling of security a person can gain from knowing they have a professional on their side. For example, a financial advisor, which can be any practicing professional who provides advice and information on financial services, such as mortgages, loans, insurance, mutual funds and more. We believe this feeling of security can positively influence many aspects of a person’s life, including their career choices, their attitude at work and the values they pass on to their children.
A person doesn’t need to have a high net worth to take advantage of an advisor’s knowledge. According to the Environics Research survey, 41% of Canadians said they had some sort of financial advisor and 59% said they prefer to manage their finances themselves and not rely on an advisor.
When we look at the level of financial wellness among survey respondents, we see a sharp divide between those who use financial advisors and those who don’t. Just over half (53%) of the respondents who identified themselves as having a high level of financial wellness said they usually consult a professional advisor before making a financial move. But just 18% of people with poor financial health said they did the same.

Financially well
53% consult an advisor

Financially unwell

18% consult an advisor

Financial health and business

An employee’s personal financial heath definitely has an impact on their workplace – especially if the employee has a low level of financial wellness, inevitably accompanied by stress.

The survey revealed that 42% of working Canadians overall say they are distracted at work because they are worrying about money. And previous Manulife research has shown that people struggling with their personal finances felt they were 16% less productive on the job.i For an employee earning $50,000 a year, that equates to $8,000 in salary paid but for which the work performed was sub-optimal. This number grows with each additional employee who finds himself in the same situation, increasing the impact on their employer’s bottom line.

42% of working Canadians overall say they are distracted at work because they are worrying about money

The financially unprepared say they are 16% less productive on the jobi

Employer's role

On a positive note, the survey found that nearly three-quarters (74%) of Canadians surveyed felt they were ready to take steps to improve their financial situation. Even among people with a low level of financial wellness, the desire to improve was high, at 69%. The desire to improve was even higher (79%) among those whose financial health was already good, a finding that points to the importance of viewing a plan member's financial wellness holistically, and working to engage them towards continual improvement.

Employers will benefit from being able to accurately assess their employees’ level of financial wellness so that they can be effective in helping support their employees and positively impact their workplace engagement. And because financial wellness encompasses a broad spectrum of issues – not just having a retirement plan or workplace benefits – it’s best to work with a provider who understands how employees feel and can offer relevant solutions to specific challenges.

How employers can benefit from supporting employees' financial wellness

When people are offered, and take advantage of, the tools to become more financially stable they can become less anxious, more engaged in their work and better workplace contributors. They can also pass these positive attitudes on to their colleagues, creating a chain reaction with far-reaching ripple effects.

Tools, such as retirement savings plans, insurance products, access to advice and education, do not need to be delivered in the workplace, but when they are, employees typically recognize that their employer is actively supporting them. Over the long term, employers who are seen as positively contributing to their employees’ financial wellness will develop a reputation for supporting employees and will improve their employer brand, which will help them retain valuable employees and gain an upper hand in the competition for top talent.

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Small Biz Talk - Benefits vs Perks

Mon, 30 May 2016 14:17:51 GMT

Catastrophic coverage is what employers really need, writes Kanupriya Vashisht - Benefits Canada

W hile discounted gym memberships, paid-for massages, or free orthotic shoes are what get most employees excited about their benefits packages, it is the heavyweight insurance-based benefits – life, LTD, critical illness, accident, etc. – that can save the day when catastrophe strikes.

Brent Delveaux, benefits consultant for Vancouver-based TRG Group Benefits & Pensions Inc., agrees employees tend to be more interested in transactional benefits, or the day-to-day stuff, such as paramedical, vision, dental. But no matter how much money they make, people can usually afford physiotherapy or prescription glasses even without being fully covered under the plan, he says.

“That’s not the case with some of the expensive drugs that are in the marketplace (for cancer, heart attack, stroke, etc.). All you need is one situation, and everyone in the company will understand how important that benefit was.”

In light of that, Delveaux says advisors have a responsibility to ensure the employer understands how important the insurance-related benefits are. “If they are a small employer, they may not see claims very often. For that matter, they may never have a life, disability or CI claim.

But we see the horror stories of people who don’t have proper insurance. We witness what a challenge it is to go on living their lives if they don’t have proper coverage. We make sure we share these stories (without naming names) with our clients.”

Gary Kawaguchi, president of PRL Benefits Limited, also believes insurance-based benefits are much more critical than paramedical benefits. Employers, he says, need to think about catastrophic loss and provide catastrophic coverage (life, disability, CI, unlimited drugs, etc.) before anything else.

Employers also need to determine, early on, their philosophy toward benefits. “Benefits are part of compensation. That means you have to anchor yourself relative to the industry you compete in, because you need to hire and retain employees in that field,” says Kawaguchi.

“Once you’re well covered for catastrophic loss, you should try and provide ample choice and optimized flexibility for other benefits.”

10 Misconceptions About Life Insurance

Sun, 29 May 2016 21:26:46 GMT

People seldom like to consider their own mortality and life insurance is rarely a topic of conversation. However, understanding the benefits of life insurance can help you plan for the future so life can go on with less to worry about.

Here are 10 of the most common misconceptions about life insurance:

1) Life insurance is only necessary for those who are married and have children

Everyone can benefit from life insurance –individuals who are single, and couples with or without children. Single people also leave behind final expenses and may have others who depend on them.

2) It is not necessary to purchase life insurance when you are young

Life insurance is the type of product you have to buy before you need it. Purchasing life insurance when you are young and in good health allows you to take advantage of potential lower premiums.

3) Life insurance provides no benefits for the living

Although life insurance can provide money for your family upon your death, there are also types of life insurance that can play a key role in your own financial plan. These types of life insurance policies offer a number of “living benefits”, including the ability to access money to pay tuition, contribute to a down payment on a home, help to fund a business, or help to meet your retirement needs.

4) Life insurance is too expensive

Many life insurance options are extremely affordable.

In fact, a healthy 40-year-old female non-smoker can purchase $250,000 of life insurance for $24.98 per month* (less than a dollar a day), with the guarantee that the premiums stay the same for 20 years. Forgoing your daily cup of coffee can allow you to have the funds to protect your family’s financial well-being. * Source: Empire Life Solution 20 price as of April, 2015

5) Purchasing life insurance is a complicated process

It’s easy t get started on determining your life insurance needs and options. A financial advisor can help you get organized. You can contact a financial advisor with whom you already have a relationship or you can ask friends and family for the name of the person they trust with their life insurance.

Discussing your needs and options with a financial advisor does not cost you anything, and will provide you with valuable information that can lead you to purchasing the life insurance you need.

6) Life insurance is not needed if you already have life insurance through your employer.

Having life insurance through work is a great benefit, but it may only be temporary coverage. When you leave a company or if you are laid off from your position, in many cases, your life insurance will end. It makes sense to explore a life insurance policy that will stay with you no matter where you work.

7) Individuals that are not healthy are unable to get life insurance

Life insurance options are available for individuals with a range of medical issues. The cost of the life insurance may be more costly than it would be for someone in good health, but getting a quote on what is available is typically free.

8) Life insurance is not needed if you have mortgage insurance

Mortgage insurance covers the cost of the mortgage should you pass away while still owing on your loan. Your mortgage insurance payments always remain the same even though your coverage declines as your mortgage declines.

On the other hand, if you purchase individual life insurance, the coverage amount remains the same for the length of the policy, and can be used to pay off your mortgage, cover the cost of funeral expenses, and help ensure your family is protected financially should you suddenly pass away.

9) All life insurance policies are the same

Most insurance companies offer many different types of products. It is important to work with an experienced financial advisor who can explain the differences in the types of insurance products offered by different companies so that you can make an informed decision that will meet your particular needs.

When determining which insurance company to choose, a key question to ask is what % of claims does the life insurance company payout on. At Empire Life, we pride ourselves on being able to process 88% of claims in less than two weeks, with an overall claim fulfillment rate of 99%.

10) Once you buy a life insurance policy, you can just forget about it

It is important to review your life insurance on a regular basis to ensure that it continues to meet the needs for you and/or your family. Life keeps evolving and so should your life insurance coverage.

Life insurance is a valuable tool that can be simple and easy, flexible and dependable, and make sense no matter what your personal situation.

Mortgage Creditor Insurance vs Term Life

Sun, 29 May 2016 20:39:54 GMT

Be aware of the pros and cons of Mortgage Insurance

Buying a home can be the single biggest purchase an individual will ever make.

According to statistics released by The Canadian Real Estate Association 481,113 homes were sold nationally.

For most buyers, that purchase involves a substantial mortgage and years of debt.

It is important for homeowners to know that there are options when it comes to protecting their home and their family's finances from the unexpected.

Homeowners have the option of purchasing mortgage insurance from a lender when they get their mortgage or buying an individual term life insurance policy offered by an insurance company, which can be done at any time.

Individual term life insurance and mortgage insurance have different features, and many homeowners can benefit from purchasing a term life insurance policy instead of mortgage insurance.

Here are some of the primary advantages of term life insurance:

No need to re-apply for coverage if you move or need to re-finance

With mortgage insurance, if the homeowner switches banks, moves, or sells their home, they will have to re-qualify for mortgage insurance. This could be a challenge if there have been any health changes, and the cost of insurance usually increases the older you get.

You choose your beneficiaries and they decide how the money is used

With mortgage insurance, if the homeowner passes away, the lender will simply pay off the mortgage balance. In contrast, under an individual life insurance policy, the homeowner can choose one or multiple beneficiaries and the beneficiaries can use the insurance money to pay off some or all of the mortgage, or they may decide to pay other debts or living expenses.

With term life insurance, your coverage amount does not decrease with your mortgage balance

With mortgage insurance, the coverage amount declines as the mortgage declines but the premiums stay the same. This means the insured gets less and less value for the premiums they are paying. For example, if a $300,000 mortgage insurance policy starts at $50 a month, it may seem like a good deal. But if the mortgage is paid down to $150,000 and the premiums remain at $50 a month, the policy offers significantly less value.
Buying mortgage insurance from the bank may be convenient, but it could cost more
In general, the rates for mortgage insurance are often higher than those for term life insurance policies sold by insurance companies for the same coverage amount. For example, a equivalent 40 year old, healthy couple non-smoker purchasing $250,000 20-year term life insurance monthly premium $25@month during the intitial 20 year term versus the average of the monthly cost of mortgage insurance for a $250,000 mortgage from the Top Five Banks monthly premium $50@month*

*Based on available rates for a healthy equivalent 40 year old non-smoker, purchasing a $250,000 purchasing a First to Die 20 year term Life May in 2016. Top five banks based on the average of the rates offered by Scotiabank, BMO, TD Bank, RBC, and CIBC for mortgage insurance for the same equivalency obtaining a $250,000 mortgage as determined by Empire Life in a survey conducted January 2015 insurance cost was 50% more than traditional 20 year Term.

Small Biz Talk - Group Benefits Plan Options

Fri, 27 May 2016 21:37:31 GMT

Canada Benefits - Selling insurance-based benefits - by Kanupriya Vashisht

To underscore the importance of insurance-based benefits, which include life, LTD, critical illness, and accident coverage, Brent Delveaux, Benefits Consultant for Vancouver-based TRG Group Benefits & Pensions Inc., divides his employee presentation into two parts: insurance-related benefits and transactional benefits.

“I want to make sure those employees understand how their insurance-related benefits work. If they have very good coverage, I reinforce that right away, and make sure they understand that.”

Delveaux also finds a lot of business owners buy life insurance for themselves, but rarely disability. “It’s really a lacking market. We talk [to clients] about how inexpensive benefits are on a group basis. We talk about situations we’ve gone through with other clients, and how difficult it has been for some of them to survive without these benefits.”

Employers sometimes resort to self-insurance, which can be attractive as it tends to be less expensive than purchased insurance, and gives them greater control over plan design. But Delveaux strongly discourages his clients from such arrangements. He says there are many examples, like Eaton’s and Nortel, where the employers had self-insured arrangements, and went bankrupt, leaving hundreds of helpless employees in the lurch.

He tells his clients, “If you want to self-insure something you better make sure the employees understand what they’re doing. When you start talking to them about putting it in writing, they realize they have to insure it.”

Delveaux also warns against partial coverage. He cites the example of a client who has an employee on a drug called Soliris. That drug costs around $500,000 a year. The employee is currently 48, and might need the drug till he turns 65. If the employer offers a standard drug plan with 80% co-insurance, the employee could have to pay $100,000/year in co-insurance. “How many employees can afford that? We routinely talk to clients about covering off some of those things so that a 100% of the benefit is covered.”

For Gary Kawaguchi, president of PRL Benefits Limited, the real value of a good benefits package (for the employer) can be measured in moral comfort and higher employee productivity. “It’s difficult for an employer, particularly a small business owner, to have an employee end up with a catastrophic issue – be it disability, medical issue, or an emergent event that happens while travelling.

Without insurance coverage, the moral issue is: it’s a good employee, how can I help? You feel obligated to help. The cost of that obligation can vary. We tell clients that a good approach is to insure the cost of that obligation and budget for it in base benefits.”

“The idea behind spending on benefits is that if done right – and done well – they wind up creating a package offering that has higher perceived value with the employees than it actually costs you as a business owner,” adds Kawaguchi.

Make sense of Life Insurance - Review

Thu, 26 May 2016 17:46:27 GMT

The Value of Good Advice - The Link Between

Change is inevitable, and it can significantly impact your family and your financial well-being. Whether it’s the natural progression of starting a family, buying a home, looking to retire, or an unexpected illness or job loss, when change happens the value of the financial advice you’ve been given in the past – and the advice you receive at that particular moment – becomes abundantly clear.

Good advice from a financial professional can have a profound positive impact on your own, and your family’s, financial future. When you meet with your advisor, you are likely looking for answers or solutions to your financial questions and needs. And there are many trusted advisors who have the knowledge, competence, and desire to keep your best interests in mind so that you and your loved ones can maintain your sense of financial well-being.

When looking for an advisor, it’s OK to ask them questions to help you get comfortable in working with them—in fact, it’s encouraged. The more confident you are that you are working with an expert you trust, the easier it is to have those difficult conversations and make decisions. Don’t be afraid to ask your advisor these questions:

How will you assess my financial security needs?
A good advisor will ask you questions about your life, goals, expectations, income, current assets and liabilities, and your time horizon for retiring. This process helps them properly assess your needs and work with you to develop a sound financial plan. If they don’t ask you a lot of questions, then they may make assumptions that could result in an estate and/or retirement plan that won’t take you to where you want to be.
How do you protect my privacy?
The information an advisor collects from you is personal and possibly sensitive. A good advisor will be aware of their privacy obligations to you and will have processes in place in their office to ensure the protection of your personal information. Feel free to ask about those processes.
How does your business operate and how do you get paid?
Advisors should provide you with a document which outlines which provinces they can conduct business in, which companies the advisor represents, how they are paid, and whether there could be any conflicts of interests in dealing with them.

When you work with an advisor you trust, it’s more likely you will build a financial plan that provides you with peace of mind and confidence about your future. Speak to your advisor often. A good advisor will listen well to help you build a strategy that’s designed to adapt with you as your life progresses.

Is Employer Provided Life Insurance Good Enough?

Fri, 20 May 2016 17:39:34 GMT

Posted by Allison Barton - October 22, 2014

Having life insurance as part of an employee benefits package at work is a great benefit.

Many companies pay for a fixed amount of life insurance for their employees and also allow employees to purchase more coverage at a low cost and with no medical exam. As a result, a significant number of Canadians have life insurance through their employer.

Source: Life Insurance - Canada, September 2014, Mintel Group Ltd.

Getting covered through your employer can be convenient, inexpensive and you can usually get covered regardless of your medical history.

As an example, if you make $50,000 per year, your employer might provide $50,000 or $100,000 in coverage at little cost to you, and the amount paid for the life insurance coverage comes right off your pay cheque. You may never miss the money or worry about paying the bill, and you can obtain the coverage regardless of your medical history. However, relying solely on the life insurance you have through your employer can pose some potential problems.

Answer these five questions to find out if your employer-provided life insurance is good enough:

#1: Is your employer-provided life insurance coverage enough to take care of your family if you die while employed?

Most employer plans only offer a basic amount and type of life insurance coverage.

Employers who offer life insurance benefits typically offer coverage equivalent to one to two times the employee's salary. For example, if you make $50,000 per year your employer might provide $50,000 of coverage. Life insurance coverage of $50,000 is a good benefit to have, especially if you don’t have to pay for it, but it’s below what the average person needs.

Also, since employer plans tend to be a single plan with basic coverage, and are created to cover a group of employees, the one size fits all design may not meet your life insurance needs.

Many individuals need a tailored plan to meet all of their life insurance needs based on their financial circumstance and priorities, which may require individual life insurance in addition to employer-provided life insurance.

#2: If your job changes will you still have the life insurance?

Usually, when you stop working for a company, the employer stops paying for your life insurance coverage and it ends, unless you are able to convert it to an individual policy. The converted policy may be more expensive than if you had purchased an individual life insurance policy when you were younger, and in some cases, you can’t convert your employer-provided life insurance coverage to an individual policy that is not linked to your employment.

You may not be worried about converting your employer-provided coverage because you’re expecting life insurance coverage through your next employer, but what if the unexpected happens when you are between jobs? You never know when you may need coverage and having a gap in your life insurance coverage is a risky situation that is preventable.

If your next job doesn’t offer any type of life insurance coverage, you may have to purchase an individual life insurance policy to replace your employer provided coverage. Depending on your age at the time of purchase, the cost may be significantly higher than if you had purchased individual insurance earlier.

#3: Will you still have life insurance coverage if you experience health issues?

Another problem arises if you leave your job because of a health problem. If you relied heavily upon your employer provided life insurance plan, and then suffer a medical condition that forces you to leave your job, you may lose your life insurance coverage for the reasons given in #2 above, just when your family needs it the most. At that point, it may be too late to purchase an affordable policy for the same amount of coverage or your health concerns could prevent you from obtaining the life insurance you need.

#4: Does your employer-provided life insurance plan provide coverage for your partner or spouse?

While your employer’s benefits package may provide life insurance for your partner or spouse, in many cases the coverage is only minimal.

Many couples assume that the family will only suffer financial hardship if the primary breadwinner passes away. As a result, some people only insure their spouses through their employee benefit plan, which may not be sufficient. Stay at home spouses, or lower-earning spouses make a valuable financial contribution to the family, and their contribution should be factored into the amount of life insurance coverage your family needs.

#5: Does employer-provided life insurance provide the most affordable life insurance option?

Some employer provided life insurance plans allow employees to buy a certain amount of additional coverage. However, you may need to go through a medical review to qualify for the extra life insurance, and it could be more expensive than purchasing a separate, individual policy.

If you are healthy and a non-smoker, buying an individual life insurance policy outside of your work might be cheaper than buying additional coverage through your employer, and you can choose the plan that best fits your needs.

You may have an affordable life insurance plan now through your employer benefits, however what if rates go up or the plan is cancelled? If you choose to only have employer-provided life insurance, the amount of control you have over your life insurance plan is limited.

The Best of Both Worlds

Having both an individual life insurance policy and an employer-provided life insurance plan could be the best combination.

Your individual life insurance policy can allow you to have the amount of coverage that you truly need, to add any extras that you consider necessary for your personal circumstances, and to have lifelong coverage, regardless of your employment situation. And the younger you are when you purchase it, the cheaper the rates may be. Your employer life insurance plan can be seen as a supplement.

Making sure you are covered with life insurance for all times and under all circumstances is your best scenario. So next time you think, “ I’m covered - I have life insurance at work .” Maybe think again. That might not necessarily be the case. A life insurance advisor can help you determine what additional life insurance coverage you may need.

Sharing Your Wealth with the Next Generation

Thu, 19 May 2016 19:19:09 GMT

PPI Solutions - The Between Insurance Blog

Planning for the transition of wealth to your children and grandchildren doesn’t have to be a daunting task. It’s important to start discussing this now so you can understand the impact of tax on your estate assets and what steps you can take to plan for the future.

Let’s consider some of the tax implications. Upon death, a person is deemed to dispose of all their assets at fair market value which can result in tax (excludes your principle residence). However, there is an exception for assets rolled to a spouse. Assets that pass through the estate before being distributed to your beneficiaries are subject to probate fees. As well, there could be will challenges and known or unknown creditors that could reduce the assets and impact of your estate goal.

If you are concerned about the overall impact to your estate and objectives related to the disposition of your assets upon death, a life insurance policy with a named beneficiary can help alleviate many of those concerns. As well, investment assets can be transferred into an exempt life insurance policy and investment growth during your lifetime would not be subject to tax unless funds were withdrawn. This would allow capital to grow in a more effective manner and the insurance proceeds would add to the amount of capital available for your family.

Did you know that insurance proceeds are not subject to income tax? In addition, by designating a beneficiary (other than the estate) of the policy, the proceeds pass outside of the estate and therefore are not subject to probate fees. Additional benefits of designating a beneficiary are creditor protection and the beneficiary designation cannot be disputed through a will challenge.

Please note that new rules, coming into effect January 1, 2017, will not offer the same savings as policies issued before 2017 would so it’s important to take action now.

Speak with your advisor to learn more about using a life insurance policy to transfer wealth efficiently to the next generation.

Canada’s CESP encourage Early Savings for Post-Secondary Education

Thu, 19 May 2016 19:05:39 GMT

Guest Blog Post Director General of Canada Education Saving Plan (CESP) David Swol

Since 1998, the Government of Canada has been providing incentives to encourage early and sustained saving for a child's post-secondary education through the Canada Education Savings Program (CESP). As one of the longest-running examples of a national asset-based program, the CESP is pleased to have this opportunity to share some of our successes and ongoing challenges with our colleagues in the asset-building policy community. To give a sense of the scale of our efforts, note that the population of Canada is about 35 million – just a bit less than that of California.

Our program uses Registered Education Savings Plans (RESPs), the equivalent of US 529 plans. RESPs allow assets to grow tax-free, and the savings can be used for full- or part-time studies in any type of post-secondary education: university, community college, trade school, or an apprenticeship program. RESPs can be opened through most banks, other financial institutions, or specialized RESP dealers across the country; and a wide variety of investment options and features are available. RESPs are also exempt from asset tests for social assistance in all Canadian jurisdictions.

Savings incentives from the CESP are available to any child in Canada who is the beneficiary of an RESP. The Canada Education Savings Grant is a universal matching grant of 20%, 30%, or 40%, depending on family income and the amount of contribution. The Canada Learning Bond is a series of lump-sum grants totaling up to $2,000 that low-income families can receive without putting in any of their own savings.

The CESP is delivered through a unique arrangement with about 80 financial institutions and specialized dealers across Canada. They apply for the incentives on behalf of the client when an RESP is opened, administer the incentives, and disperse the funds once the student enrolls in a qualifying program. These companies receive no compensation from the Government of Canada, but are free to advertise RESPs as part of their business.

Participating in the CESP is no small commitment for RESP providers, as they must make significant investments in technological infrastructure. All steps of the process – from client application, to verifying client income, to funds transfer – are handled electronically. Each month, the CESP processes about three million transactions from our delivery partners.

We’re proud of the impact the CESP is having in preparing Canadian students for post-secondary education. Currently, over 45% of Canadian children have received a matching grant – this has increased significantly since the beginning of the program. Participation in the Canada Learning Bond is also increasing but has a bit further to go since it only became available in 2004. Nearly 28% of eligible children from low-income families have now received a Canada Learning Bond.

More and more Canadian students are using this money to access post-secondary education. In 2012, more than 328,000 students – roughly 15% of all post-secondary students – benefitted from an average of $7,235 each in funds withdrawn from an RESP. (By comparison, the average annual tuition for an undergraduate university program in that year was about $5600.) As more children grow up with an RESP, we hope to see these figures continue to grow as well.

These results are encouraging, but we have more work to do to ensure that these benefits are accessible for all children. As with 529 plans, the process of choosing and opening an RESP can be challenging for many families. Improving this involves addressing a complex array of issues – including awareness, financial literacy, complex application processes, and more. The field of behavioral economics, as well as other work on creating inclusive savings programs, is providing some important insights. We appreciate the many organizations working to gather and disseminate best practices and evidence on how to enhance participation in savings programs.

We are also interested in developing a deeper understanding of the non-financial benefits of education savings, such as strengthening expectations and encouraging planning. Recent US research, such as the work of William Elliott and others, is raising the bar in this regard. Work remains to fully explore the available Canadian data and better understand the Canadian context.

General information about the CESP and RESPs is available on http://www.canlearn.ca ,

Learn More..

Let's Talk!

Mon, 18 May 2015 00:00:00 GMT

Benefits Matter is here to help with your Life insurance needs

Whether you are an individual or a small business owner your commitment to family and work is paramount when it comes to Benefits Matter. As a Benefits Specialist it is our responsibility to ensure your commitment is complete and financially obtainable.

Benefits Matter has been assisting families and business owners with their life, disability and employee health insurance needs including RRSP / TFSA /CESP programs in cooperation with leading Canadian insurance providers since 1995.

Contact Us for a no obligation online consultation

Is your Term insurance or Employee Benefits up for renewal? Do you have unanswered questions about your premium renewal or claims experience? Have you been declined for insurance? Do you have question about how to make a Critical Illness claim? Have you been turned down for business creditor insurance? Give us a call and speak with a licensed representative today.

SME Business

Tue, 26 Aug 2014 00:00:00 GMT

Myth: Employees are responsible for 100% of contributions to a group insurance plan

Benefits Matter works with employers to ensure certain requirements are met prior to the implementation of an employee benefit program.

Employers are responsible for at least 25% of premium contributions before an employee benefits program can be implemented.
The liability and implementation of employee benefits is the sole responsibility of the plan sponsor (employer).
Depending on the number of employees you must have at least 75% participation within the plan.
An employee can waiver off certain benefits provided they are covered by their spouse (partner).
In cooperation with the plan sponsor - employees can participate in the selection process and maintenance of the benefits program.

Flexible Employee Benefits Plans have a variety of options to choice from:

Flexible Retirement Savings Contributions
Health Spending Account options
Extended Health care benefits
Variety of dental care options
Travel – medical emergency benefits while traveling/working outside Ontario and abroad
Private hospitalization and nursing care
Long Term Disability
Short Term Disability
Critical Illness - lump sum recovery benefit
Life and dependent life benefit options

Employee Benefits Plan is an investment into the well being of your workforce. Price should not be the only indicator that matters when selecting an insurance provider. The expediency of claims and the level of customer service provided by the benefit provider are equally important.

Benefits Matter works with a number of insurance providers we ask to submit proposals during the implementation and renewal process.

Family Business

Wed, 23 Jul 2014 00:00:00 GMT

Myth: Traditionally, a family operated business where more than 50% of the employees are family members are restricted to the number of benefits available to you

Benefits Matter in cooperation with other services providers such as Benecaid; a third party administrator that customizes employee benefits and takes full advantage of CRA tax rulings geared to family operated businesses to ensure all employees including family members receive full access to benefits.

Health – prescription drugs, medical and extended health services
Dental – dental care
Travel – medical emergency benefits while traveling/working outside Ontario and abroad
Hospitalization and private nursing care
24/7 Disability – long term benefits for those not covered by E I or WCIB
Life, Accidental and Dependent Life

Self-Employed Health Plan

Mon, 07 Jul 2014 00:00:00 GMT

Myth: Being Self-Employed means I cannot afford benefits

Benefits Matter - in recognition of the importance of maintaining health benefits for individuals who are not associated with a company or an association plan. Benefits Matter has partnered with Manulife Financial Cover Me program to custom design a single benefits plan just for you.

Cover Me You can choice between 2 types of plans Follow Me and Flex care. You only need to select those benefits that matter to you. Depending on age and benefits selection your cost could be as low as $2.00 per day.

Prescription Drugs
Extended Health Care Learn More
Dental care Learn More
Travel outside of the Ontario and Canada Learn More
Hospitalization and private nursing care
24 / 7 Disability coverage
Critical Illness Learn More
Life insurance