Insurance Planning Archives - Investamp

Life Insurance as an Investment Tool: A Powerful Yet Overlooked Strategy

Annie Rodrigue — Mon, 03 Mar 2025 11:30:42 +0000

When we think of life insurance, we often see it as a safety net for our loved ones in case of death. However, what many don’t realize is that it can also be a powerful investment tool, particularly for business owners and entrepreneurs.

When used wisely, universal life or participating life insurance is more than just financial protection—it becomes a valuable financial asset. Let’s explore how it can play a key role in your business growth and wealth transfer strategy.

1. A Tax-Advantaged Growth Tool

One of the biggest advantages of this type of life insurance? The funds inside the policy grow tax-free. Unlike other investments that are taxed annually, money invested in your life insurance policy accumulates without any immediate tax impact as long as it remains within the policy.

This makes it a smart strategy to grow surplus cash without unnecessary exposure to annual taxation.

A Practical Example:

An entrepreneur generates $100,000 in profits from their business. If they invest this amount in an unregistered account, they will have to pay taxes on any income earned every year. However, by using a universal life insurance policy, these funds continue to grow tax-free, optimizing long-term returns.

2. A Tax-Efficient Wealth Transfer Strategy

Another major advantage of this approach is the ability to transfer capital tax-free to beneficiaries.

Upon the insured’s death, the death benefit is paid directly to the designated beneficiaries, bypassing the estate and avoiding taxation. Even better: when the policy is owned by a corporation, the payout can be transferred to shareholders tax-free via the Capital Dividend Account (CDA).

Why Is This Important?

When a business owner passes away, the value of their company shares can be heavily taxed. Having a well-structured life insurance policy allows for the liquidation of assets without tax implications, ensuring a smooth wealth transfer.

A Practical Example:

A business owner holds a $2 million life insurance policy. Upon their passing, this amount is credited to the company’s CDA and can be withdrawn as tax-free dividends for their heirs. This is an excellent way to preserve the business’s value and avoid a massive tax burden.

3. Flexibility and Optimized Wealth Management

Universal and participating life insurance policies provide unique flexibility:

✅ You can adjust the invested amounts based on your business’s financial situation.

✅ You have access to a variety of investment options within the policy itself.

✅ You maintain access to capital if needed through policy loan strategies.

This approach combines protection, growth, and tax optimization in one single financial tool.

4. Is This Strategy Right for You?

Life insurance as an investment tool isn’t a one-size-fits-all solution. However, for entrepreneurs looking for optimized growth and tax-efficient wealth transfer, it’s definitely an option worth considering.

👉 Are you a business owner wondering if this strategy fits into your financial plan? Let’s talk! A strong plan always starts with a great conversation.

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5 things to know about long-term care insurance

Annie Rodrigue — Mon, 09 Dec 2024 11:30:56 +0000

By Sheryl Smolkin and Sun Life Staff

Chances are you’ve never considered the potential costs of long-term care. But as you get older, the odds of your needing that care will increase.

You’re healthy now, and that’s great news. But what would happen if you developed a severe and disabling condition, a degenerative illness or dementia? You may find you need constant care, either at home or in a nursing home. And that’s not great news – especially if you have trouble paying for that care.

How will your need for care affect your family? If you or someone you know has ever provided care for a loved one, you’ll appreciate why it’s important to plan for your own future health-care needs. Supporting an aging family member can take its toll emotionally, financially and physically.

Many Canadians are feeling the pinch. A survey¹shows over a third of Canadians (37%) providing long-term care for a loved one at home feel “angry, depressed, distressed or unable to cope.” If this happens to you, you may have to change or consider changing your retirement plans.

When it’s time to move your parent into a nursing home, who pays for home healthcare?

Long-term care is expensive. In Ontario, for example, a subsidized, semi-private bed in a long-term care facility can cost $2,336.92 a month. ²In Quebec, it’s $1,686.90 for a similar room; in Alberta, it’s $1,947. In New Brunswick, expect to pay a whopping $3,390 per month. Getting care at home is even more expensive, as it’s not subsidized like nursing homes.

If you need financial help, the province will step in. In Ontario, for example, you sign over your entire government pension (CPP, OAS, GIS). Essentially, you surrender control of your finances, except a small “comfort allowance.” That’s a little pocket money the government gives you for clothing, telephone, cable, etc. (It’s currently $149/month.) Then the province tops up the difference – but only up to the lowest room cost.

Living in a retirement residence will cost considerably more, as those fees aren’t provincially capped. Your province may fund a limited amount of home care, but if you need more, you pay for it. And at-home personal care can cost up to $65/hour.

All told, if you need extensive care, your annual out-of-pocket costs could easily reach between $35,000 and $65,000.³

So, how can you ensure you have the funds to help pay for care when you need it? If you haven’t planned ahead, your options might be limited to:

- - using up your retirement savings
  - borrowing money
  - asking your children or other loved ones for money
  - selling your home

Or, you could plan ahead and buy long-term care insurance.

Here’s what you need to know before you buy:

1. What is long-term care insurance, and what does it cover?

Long-term care insurance protects your finances if the following prevents you from looking after yourself:

- - a physical illness, or
  - you become dependent on someone for your basic care need for an extended period.

The money from long-term care insurance can help pay for care:

- - in your own home
  - at an adult day-care program
  - in an assisted-living or long-term care facility.

These programs and facilities provide services such as nursing care, personal care, meals and housekeeping, and having someone watch over you.

2. What types of long-term care plan is available?

You can buy benefit amounts from $125 to $2,300 per week.

3. How much does the coverage cost?

The cost of your insurance will depend on your age and sex at birth when you apply. So, coverage is typically less expensive the younger you are. The annual cost may also reflect:

- - the amount of coverage you choose, and
  - the waiting period you select.

The waiting period is the length of time you must be continuously dependent before a claim payment will be made to you.

4. When can you be eligible to receive the benefit?

It’s a two-step process. First, your coverage must take effect. That could be at age 65, or after five years, whichever is the longer period. You can submit a claim for benefits after your coverage becomes effective.

Second, once coverage is effective, you must remain dependent for your policy’s waiting period (one or two years), before you start getting benefits.

Long-term care insurance is part of a variety of protection plans from life insurance companies.

With long-term care insurance, you have more flexibility and control. And that’s really great news.

–

¹Frances Woolley, “The way we pay for long-term care needs a fundamental rethink,” The Globe and Mail, November 23, 2023.

²Cost figures are as of November 2022, and were gathered by an external organization for Sun Life.

³”Assessing your needs,” A Guide to Long-Term Care Insurance, CLHIA, 2024, p 9.

This article is meant to provide general information only. Sun Life Assurance Company of Canada (Sun Life) does not provide legal, accounting or taxation advice to advisors or Clients. Please make sure you seek advice from a qualified professional before acting on any information in this article.

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4 tips for buying travel insurance

Annie Rodrigue — Mon, 02 Dec 2024 11:30:21 +0000

By Joy Blenman / Sun Life

You may be in the pink of health – or just going away for a day or two. But accidents can happen. Here’s what you need to know about travel insurance in Canada and abroad.

Imagine you’re on vacation in the Caribbean. The sun is warm, the water is a vibrant blue and the landscape is lush. You’re in a picture-perfect paradise. But suddenly, you begin to feel ill…

Nobody wants to pay for added expenses after splurging on a vacation. But a visit to a doctor or hospital abroad could land you with a massive bill.

Every year, Canadians vacationing without travel insurance make the headlines by running up exorbitant medical bills.

A quick jaunt across the border to shop or catch a ballgame carries the risk of crippling expenses. Yes, your provincial health insurance may reimburse you for a small portion of the cost. But it caps your coverage at the provincial fee limit for your treatment. And that’s if your treatment is covered at all.

Even travelling to another province can be costly. Here’s an example: You live in Vancouver, where the B.C. government charges $80 for an ambulance ride. While visiting Ontario, you break your leg in a car crash and go to the hospital by ambulance. Since you’re from out of province, you get an ambulance bill for $240. But your B.C. health insurance will only reimburse you for $80.

Even the federal government recommends getting travel insurance.

And yet, most of us don’t – at least, not all the time. Before COVID-19, travel insurance industry surveys consistently found that fewer than half of Canadian travellers always bought insurance. Since then, interest in travel insurance has increased. Now, according to Insurance Business magazine, the majority of Canadians plan to buy insurance before travelling. But still, not everyone does, and not all the time.

So, why don’t we all insure ourselves whenever we travel?

It may be partly because the terminology can be pretty murky. Between what is and isn’t covered, and when, insurance terms can seem pretty complicated.

But a good insurance provider will clarify what the jargon means, and make getting travel insurance a smooth process.

4 golden rules: How to choose the right travel insurance provider

Will McAleer is the former president and current Innovation Lab chair of Canada’s Travel Health Insurance Association.

To ensure you’re getting proper coverage from your travel insurance provider, he says, follow four “golden rules”:

1. Know your health

Some policies include coverage for lost luggage and trip cancellation for various reasons, and that’s very useful. But at its heart, travel insurance is health insurance.

Before you apply for travel insurance, make a note of any conditions you have and medications you take. The provider will also want to know whether there’s been a change in your medication.

By being open about your health, you can make sure the policy covers your particular situation.

2. Know your policy

Ask the travel insurance company or your advisor all the questions you can think of before purchasing your policy.

Read the fine print, and ask questions like:

- - Which services or medical devices does the policy cover?
  - Is there a deductible?
  - Are there any restrictions on where I can travel?
  - What if I have a pre-existing condition?
  - Are there any age limits?
  - How long a trip will my policy cover?
  - How soon will my insurer pay my claim?

3. Know your trip

Think about what you’re hoping to do on your trip.

Planning any high-risk activities such as bungee jumping, scuba-diving or extreme snowboarding? Make sure your travel insurance policy covers them.

“Policies differ in terms of the activities they will cover,” says McAleer. “So don’t just assume you’re covered.”

4. Know your rights

Check out the Travel Health Insurance Association’s bill of rights and responsibilities for consumers.

This is a great resource that lets you know what you have a right to, such as:

- - 24/7 access to toll-free support
  - Free, minimum 10-day policy review of your policy
  - Prompt and fair claims handling.

What should you look for in a travel insurance provider?

Regardless of the specifics of your policy, always look for:

- - A smooth application process, smooth claims payment
  - The ability to file complaints or flag problems easily and simply
  - Simple and clear documents with all limitations and exclusions fully disclosed

In 2022, Canadian insurers paid about $680 million in travel insurance claims. That’s according to a report from the Canadian Life and Health Insurers Association.

But sometimes, errors happen and disputes arise, even with the best companies. That said, if you have a problem – a good travel insurance provider will address it. When you’re considering a provider, be sure the website clearly lists an appeals or complaints contact.

And take good care of the paperwork. “You need to treat your insurance documents the same way you treat your passport,” says McAleer.

Make copies of your insurance documents and store them safely. That way, you can still access them if you lose or misplace the originals.

Whether you’re travelling out of province or out of Canada, be sure to pack travel insurance. If you plan ahead to protect yourself, you’ll be more likely to have a vacation to remember. In a good way!

At Investamp, we know something about travel insurance! Ask us what we can do for you and we’ll be more than happy to offer our best solution for your needs!

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Is term life insurance right for you?

Annie Rodrigue — Mon, 14 Oct 2024 10:30:38 +0000

By Farhana Uddin // Sun Life

Think life insurance isn’t for you? You may want to think again. Whether you’re married, single, childless or a parent, are there people in your life who rely on you? If they could face financial hardship without you, you may want to help protect them with life insurance.

But what about the price for that protection? Generally speaking, there are three basic types of life insurance: Term, permanent (or whole life) and universal life (which is a kind of permanent insurance with an investment component).

Let’s talk about term. If you’re looking for something budget-friendly, term life insurance may appeal to you. That’s because its annual or monthly costs (called premiums) are typically lower to start with than permanent life insurance.

Sounds good, but is term the right fit for you? Here’s what you need to know before you buy:

How does term life insurance work?

Let’s say you want affordable protection to cover a temporary but large financial obligation. That could be a mortgage, a business loan or your child’s education. Buying a term life policy would mean choosing the term that matches the time you need the coverage. That could be five, 10, 20 or more years. It could be your mortgage’s length, your loan’s duration or the number of years your children will need support. During your initial term, your premiums are guaranteed to stay the same.

But what happens when your term expires and you still need insurance? A feature called renewability lets you continue your coverage for another term. The cost will increase due to various factors. These can include your being that much older than you were when you first bought your policy. With this feature, you won’t need to provide new or additional health or medical information. You will, however, still have to contend with the price hike. Term life insurance is flexible, so you can adjust your coverage to suit your changing needs over time. But it doesn’t provide lifetime coverage or build up a cash value the way permanent or universal policies do.

There’s also the death benefit to consider. That’s the amount of money paid or due to be paid when you die. It goes, tax free, to your family or whoever you name as your beneficiary(ies). The death benefit amount remains the same as long as you continue to renew.

Is there a way to minimize term insurance rate increases over time?

Worried about rate increases under a term-life renewal? Most term insurance policies have a something called a “convertibility” feature. That lets you switch to permanent insurance without having to re-qualify by giving new medical information.

How can changing to permanent insurance help? Permanent life insurance comes at a higher price, but the policy stays in effect and the premiums stay the same, no matter your age or health. So, permanent insurance may cost less in the end than renewing your term insurance several times.

The Canadian Life and Health Insurance Association (CLHIA) keeps track of Canadian life and health insurance statistics. According to the latest CLHIA figures, Canadians own $5.5 trillion altogether in life insurance. Of that, 75% is in the form of term insurance. The average Canadian household carries $474,000 in life insurance, in some combination of permanent, term, group and individual. That’s equal to about five times the average household income.

What about life insurance through your employee benefits?

Buying life insurance through your workplace benefits is often cheaper than buying it as an individual. That’s because you get the financial advantages of group rates. However, you need to make sure you’re getting enough protection. Ask yourself whether your group policy will cover your share of your family’s expenses or financial obligations. If you need more, talk to your human resources department about buying more coverage through your employee plan.

Remember, too, that your workplace insurance isn’t a lifelong guarantee. First, it doesn’t go with you if you change employers. Second, it ends when you retire or leave your job. And third, the cost can increase every time you move into a higher age bracket. That’s why you may consider buying individual life insurance that will stay with you regardless of your employment situation. If you feel you need more, you can top it up with group coverage through your employer.

Whatever kind of insurance you choose, you want a solid plan that protects your family and your estate. To do that, you need to understand the different kinds of life insurance coverage and benefits available. Perhaps your needs are simple and you need just one type of insurance. Or your situation may be more complex, and you may need more than one type.

Do you know how much life insurance you might need to protect the people who depend on you?

Source: Sun Life

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Why a Second Financial Opinion Can Make All the Difference

Annie Rodrigue — Mon, 30 Sep 2024 10:30:26 +0000

Just like financial markets and available products constantly evolve, your financial situation changes as well. That’s why it’s essential to regularly ensure that your financial plan remains aligned with your long-term goals. But how can you know if your strategy is still optimal? The answer may lie in a second opinion.

The importance of regularly reassessing your strategy

Your financial portfolio reflects your priorities, whether it’s to maximize your returns or minimize your taxes. However, changes in the economy, tax laws, or even your personal situation can affect your plan’s effectiveness. A second opinion allows you to gain a fresh perspective on your strategy, helping you identify new opportunities or adjustments that could make a significant difference.

Why seek a second opinion?

Here are a few reasons why reevaluating your portfolio might be beneficial:

- Alignment with your long-term goals: Over time, your goals may change. Are your financial products still in line with your future aspirations?
- Tax optimization opportunities: An effective strategy is not just about generating returns but doing so in a tax-efficient way. A fresh perspective could help you make the most of tax opportunities.
- Adaptation to recent economic changes: Markets evolve, and what was true yesterday may no longer apply today. Regular reviews allow you to adjust your investments in light of recent developments.

Investamp: Service beyond expectations

At Investamp, we firmly believe that building and protecting your future requires more than following market trends. It demands strategic thinking that goes beyond the status quo. We are committed to providing personalized service and exceeding your expectations because we care not only about your financial growth but also about your overall well-being and that of your family.

Make an informed decision with a free evaluation

To help you make the best choices for your future, we offer the opportunity to benefit from a free evaluation of your financial strategy. This meeting is an opportunity to review your options and ensure that you have all the information you need to make informed decisions.

If you would like to learn more or schedule a consultation, click here to book your appointment, or contact us directly. We would be happy to help you assess and optimize your financial plan.

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What is cash value in life insurance, and how does it work?

Annie Rodrigue — Mon, 09 Sep 2024 10:30:29 +0000

By Paul Moser

Did you know that some life insurance policies have a cash value? You may be able to provide protection for your loved ones, and access this money. Learn more about cash value in life insurance and how it works.

22-million Canadians have life insurance coverage, according to the Canadian Life and Health Insurance Association (CLHIA).

I’m one of those Canadians. Over 30 years ago, I bought a life insurance policy. A few years ago, I discovered this policy has a “cash value.”

So what is cash value in a life insurance policy? Cash value is the associated value of the life policy that may grow over time. Depending on the type of policy you choose, this cash value can grow in different ways, such as:

- - guaranteed and additional cash values accumulating year after year, or
  - policyholder dividends earned in participating insurance policies over time.

In other plans, such as universal life, your policy cash value may grow based on actual investment accounts in the policy.

It’s important to remember that cash value in a life insurance policy isn’t the same as a savings account at a bank. You may be able to withdraw or borrow against the cash value when an urgent need for cash exists. But in that case, there’s an interruption to your policy, your coverage, and the protection for your beneficiaries.

Why choose a life insurance policy with cash value?

Cash value in a life insurance policy has the potential to grow significantly in value over your lifetime. Generally, the cash value portion of a life insurance policy grows tax-deferred. That means you don’t pay tax on any growth in the cash value, unless you access it during the life of the policy.

The death benefit of a policy is a one-time, tax-free benefit payable to a beneficiary or beneficiaries that you have named. In some policies, the cash value may be part of this death benefit.

Different life insurance policies that can accumulate cash value

There are three types of life insurance policies that may accumulate cash values that you could access:

Whole life: a type of permanent life insurance.
Participating life: also called par insurance. This type of whole life insurance is a contract that offers a chance to earn policyholder dividends.
Universal life: life insurance that offers flexibility on your death benefit, payments, and the investment savings elements of your policy.

How to access cash value funds

There are different options to access cash value in a life insurance policy. It depends on the type of policy you own.

1. Borrow against the cash value.

You may be able to take a policy loan against some of the cash value in the policy. But you’ll have to pay interest on the loan. These kinds of loans don’t need credit checks or collateral. However, there may be tax consequences.

While you don’t have regular loan payments on the amount you borrow, any loan balance is deducted from the amounts payable to your beneficiary at your death. You can repay the loan or interest charges at any time.

Life insurance companies will allow you to borrow a certain percentage of the cash value. But they won’t let you borrow the whole amount. This is because the loan balance and interest charges reduce the net cash value. Once that value reaches zero, the policy is cancelled, and the life insurance coverage ends. Also, depending on how much you borrow, there may be tax consequences.

2. Take a cash withdrawal.

Depending on how cash values have accumulated in your policy, you may be able to take a cash withdrawal. Again, there may be tax consequences. This may reduce your policy’s death benefit and may affect the future cash value growth. That means there will be less money for your beneficiaries after you die. Cash withdrawals are different than policy loans:

- - You can repay a policy loan.
  - A cash withdrawal is an amount permanently removed from the policy that can’t be put back.

3. Cancel your policy.

In this option, you end your contract with the insurance company. This means your beneficiaries will no longer receive any benefit at the time of your death. The insurance company will pay you the cash surrender value, if there is any available. Generally, this is the cash value of the policy to date, less any loans, loan interest, premiums outstanding, or surrender fees. Your life insurance coverage ends, and some or all the money you receive may be subject to tax.

Source: Sun Life

This article is meant to provide general information only. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.

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Do you need life insurance if you’re wealthy?

Annie Rodrigue — Mon, 08 Jul 2024 10:30:36 +0000

By Kristen Mayne

Do you need life insurance if you’re wealthy? Here are 8 ways you can use life insurance to help grow and protect your wealth.

Life insurance is something everyone can benefit from. However, it’s especially important for those with a high net worth. It can help provide protection for your family, grow your wealth, assist with estate planning and more.

How to use life insurance to grow and protect wealth

1. Protect your wealth

If you have a life insurance policy and designate a beneficiary other than your estate, the full life insurance payout goes to your beneficiary. Creditors of your estate can’t go after that payout.

2. Divide your estate

Estate equalization means balancing your estate among your heirs. However, dividing an estate equally may be a challenge. For example, let’s say you want to leave a cottage worth $900,000 to one child. And you also want to leave $600,000 worth of investments to another.

A $300,000 life insurance policy could solve this imbalance. It allows you to top up the lesser inheritance so both children inherit equal value.

3. Tax-free payout

For the most part, life insurance payouts are not taxable in Canada. This means your beneficiaries receive the full amount you want to leave them.

4. Protect your estate

Life insurance can help protect the value of your estate. Here are three ways it can help with estate planning if you name your estate as the beneficiary of your policy:

- The life insurance payout can be used to pay probate expenses. These are fees charged by the government based on the deceased’s estate value. The payout can also be used to pay for executor’s fees and other legal expenses.
- Beneficiaries can use the funds to pay off estate debt. This avoids the need to sell part of your estate to raise cash.
- The payout could help cover funeral costs.

5. Diversify your portfolio

Life insurance isn’t often thought of as an investment. But it has gained recognition as an alternative asset class. This is because permanent life insurance often offers better rates of after-tax return than more traditional investments. This includes GICs and government bonds.

6. Provide extra tax-free retirement income

Permanent life insurance can be used as an additional tax-efficient source of retirement income.

One way is to use the cash surrender value* of the policy as collateral for a loan from a financial institution. The financial institution gives you a series of loans, for which the insurance policy is collateral. Under the current laws, the loan proceeds are received-tax free.

The loan arrangement can be set up so that no interest is payable on the loan until death. Upon death, part of the payout goes to cover the loan and the rest goes tax-free to your beneficiaries.

*The money a policyholder receives for cancelling their policy before it matures, or they pass away.

7. Fund a buy-sell agreement

A buy-sell agreement, often funded by life insurance, helps protect your business, family, and business partners. When a co-owner dies, the insurance proceeds are used for buying out the deceased’s shares from their family.

8. Support a cause

Permanent life insurance can be a great way to support your favourite cause.

Here’s a couple of ways how. One is to set up a charitable giving rider. It can pay a percentage of the policy’s value to your charity of choice.

The other is a policy donation. This is where you apply for permanent insurance. Once the policy is approved, you can transfer ownership of the policy to a charity. You then pay the annual premium and receive a tax receipt each year for that amount.

Source: SunLife

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A Travel Insurance No Matter Where Life Takes You

Annie Rodrigue — Mon, 01 Jul 2024 10:30:07 +0000

Travel Insurance That Covers Your Needs!

There’s nothing better than escaping the constraints of everyday life by relaxing on the beach, hiking in a rainforest, or exploring our vast country.

Whether you’re traveling alone or with your family, whether you plan one trip or multiple trips, it’s comforting to know that you have coverage in case of an emergency resulting from various injuries or illnesses, or when any other travel-related incident occurs.

Travel insurance plans are designed to help provide protection for you and your family, no matter your destination.

$13,262 REPRESENTS THE AVERAGE COST OF A HOSPITAL STAY IN THE UNITED STATES*

53 MINUTES IS THE AVERAGE TIME PASSENGERS WAIT DUE TO NON-COMPLIANCE WITH THE SCHEDULED DEPARTURE TIME (IN THE UNITED STATES, 2023)**

80% REPRESENTS THE PERCENTAGE OF BAGGAGE ISSUES CAUSED BY DELAYS***

How can travel insurance help you?

Coverage for emergency medical care
Can cover doctor services, hospital services, ambulance services, and dental care that you may unexpectedly need during your trip.
Trip Cancellation and Interruption
Can assist you if you are unable to travel or if your trip is interrupted due to an unforeseen event.
Lost, damaged, or delayed baggage
Can cover official documents such as passports and driver’s licenses, as well as toiletries, clothing, and other items.
Flight and Travel Accident
Can cover you in case of an accident resulting in death, blindness, or dismemberment.

At Investamp, we work with 14 different insurance companies to ensure we meet all the specific needs of our clients. Contact us today to find out which one best fits your needs.

*Debt.org, “Hospital and surgery costs”, November 30, 2023.

**Vox.com, “What a summer of hellish flights taught us about flying now”, September 8, 2023.

***The Guardian, “Mishandled baggage rate almost doubled globally in 2022 as airlines scrambled after Covid”, May 18, 2023

Source: Manulife

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3 reasons to get life insurance in your 20s or 30s

Annie Rodrigue — Mon, 17 Jun 2024 10:30:26 +0000

By Sylvie Tremblay and Sun Life Staff

Think you’re too young for insurance? Here’s why you may want to reconsider.

Building a financial plan can feel tricky, especially when you’re in your 20s or 30s and just starting out. It’s a time where you may be balancing many priorities, like paying debts and planning for the future. And, thepandemic may have put a pause on your career opportunities and development.

It can be tempting to put off financial issues until later. But thinking about life insurance now can help you balance — and achieve – your early goals.

“Life insurance is one of the cornerstones of any properly laid out financial plan,” explains Mark Coutts, Sun Life advisor and President and Senior Advisor at Coutts Financial Services Inc. “It can provide that safety net. So while you’re focused on all your goals in life, you’ve got a plan in case you need it.”

Why should you get life insurance in your 20s or 30s?

1. Life insurance offers financial protection for you and your loved ones.

It can help provide the security you need to reach your financial goals. It’s particularly useful if, in the future, you’re looking to:

- - buy a home,
  - get married or
  - grow your family.

“Not only are these important personal milestones, they’re important financial milestones,” says Coutts. You have more responsibility on your shoulders. For example, you may have debts that you owe on a mortgage. Or, you may have a family to help support.

Life insurance helps you meet those responsibilities. How? It can leave your family or beneficiaries with a tax-free death benefit.

What’s a death benefit? It’s a set amount of money that’s given to beneficiaries (your loved ones) when you (the insured person) die. The death benefit may help cover a mortgage and living expenses and can help your family remain financially secure.

More benefits to getting life insurance at a young age

Major financial milestones, like buying a house, can be the perfect time to review your coverage. But there are other benefits to seeking out life insurance early — no matter what your short-term financial goals.

1. It’s cheaper. The younger and healthier you are, the more likely you’ll have lower monthly premiums. (Premiums are your monthly or annual fees.)

2. It’s easier to get approved for it. Insurance companies are more likely to approve your life insurance application if you’re healthy. So applying for life insurance while you’re very young and in good health makes it much easier to get coverage. Plus, waiting until later in life may limit your options.

What type of life insurance do you need in your 20s and 30s?

Where can you start when you’re young and healthy? Term life insurance. It provides coverage over a set number of years. This could mean coverage for 10, 20 or 30 years.

Here’s what term life insurance includes:

Flexibility to add more coverage to your plan later. ““We sometimes call this clause a guaranteed insurability benefit. It allows you to boost your coverage when you need to,” says Coutts. For example, in the future, you may have more than one child to take care of. In which case, you may need more coverage to help protect your growing family financially.
The option to change to a permanent plan. Permanent life insurance gives you guaranteed protection for life. Converting your term plan to a permanent one means you won’t have to provide any additional medical information.

A good way to ensure that your life insurance grows with your changing needs is to have flexible life insurance coverage. It could allow you to increase your coverage based on certain life events:

- - Marriage or common law union
  - Birth or adoption of a child
  - An increase to your mortgage whether it’s new or refinanced
  - A 20% increase to your gross income

How to find out what’s right for you?

Finding the right coverage for your financial situation is just as important as getting coverage. An advisor can help. In the end, they’ll help you feel secure in your financial future.

Source: SunLife

This article is meant to only provide general information. Sun Life Assurance Company of Canada does not provide legal, accounting, taxation, or other professional advice. Please seek advice from a qualified professional, including a thorough examination of your specific legal, accounting and tax situation.

L’article 3 reasons to get life insurance in your 20s or 30s est apparu en premier sur Investamp.

Critical illness insurance

Annie Rodrigue — Mon, 08 Apr 2024 10:30:21 +0000

What is critical illness insurance?

Critical illness insurance(CII) is coverage that can help Canadians or those living in Canada pay the additional costs associated with life-altering illnesses like cancer, stroke, heart attack and dementia.

Why do I need critical illness insurance?

If you’re diagnosed with a covered illness, your critical illness insurance policy can help you pay for expenses that your provincial or territorial health plan doesn’t cover.

Many Canadians assume that their government health plan or workplace benefits plan will cover many of the medical costs associated with a life-altering illness. But these plans might not cover all the extra costs that come with managing a critical illness, like home-care costs, travel and/or accommodation, lost work wages, childcare costs, gas and meals. Over time, these expenses can add up.

With CII, you can receive a lump-sum payment that you can use however you need so that you can focus on your recovery.

How does critical illness insurance pay out?

Let’s say you’re diagnosed with an illness covered by your policy and you meet all of the policy requirements (such as survival period). In such cases, you’ll receive a lump-sum payment once your claim is approved .

You can then use this money however you want and for any reason. For example, this can cover out-of-pocket expenses that may not be covered by your provincial or territorial health insurance, such as certain prescription drugs, mortgage, rent, short- or long-term care, etc.

What does critical illness insurance cover?

It depends on the product you buy. Some policies will cover more critical illnesses than others.

How much critical illness insurance do you need?

The amount of coverage you need depends on your personal situation. Find out how much a critical illness may cost you and how much coverage you may need to financially protect yourself.

Feeling overwhelmed? At Investamp, we have the tools and strategies to prepare you for the worst, turning uncertainty into serenity. We are here for you.

Our team is by your side at every step, to help you reach your financial goals and support you through the unexpected.

Proactive financial planning in the face of serious illnesses like dementia can make all the difference.

L’article Critical illness insurance est apparu en premier sur Investamp.