Author Archives: Brian Poncelet

3 Money Mistakes You Don’t Want to Make

Borrowing from RRSP.

On the off chance that you require cash, obtaining from your RRSP isn’t the appropriate response. In the event that somebody proposes for you do that, it is essential that you put forth some critical inquiries. To start with, how does this cash get paid back and under what terms? Credit reimbursements are paid back with after-charge dollars and when you at last convey them in retirement they are assesses once more. Second, what happens in the event that I lose my activity? Regularly in many plans, you will be required to pay back the whole credit promptly on the off chance that you leave your manager. Something else, that cash turns into a dispersion, which acquires duty and potential punishments. Keep in mind, your RRSP is there to construct cash for your retirement. It’s something that should not be touched until the point that you achieve your brilliant years. In the event that you are following a tenets based way to deal with your money related choices, you would have assembled liquidity in an investment account to give you the money you require instead of need to stray into the red or acquire from your RRSP. For what reason would you need to get against your bliss in retirement? You worked so difficult to spare that cash, don’t utilize it.

Not Insuring Your Most Valuable Asset.

There are two things that you certainly require in your portfolio – disaster protection and handicap protection. They are not an ought to have they are an absolute necessity have. Try not to commit the error of not protecting your most profitable resource; yourself. Who might be fiscally affected if something somehow managed to happen and you couldn’t work, or far more detestable, the incomprehensible happens? Did you realize that affliction an inability that keeps you out of work adds to 62% of every individual chapter 11, as indicated by an investigation by the American Journal of Medicine. Numerous individuals are under the misguided judgment that life coverage or handicap protection are extremely costly when that truly isn’t the situation. Converse with your counselor to help locate the correct item to fit your needs. Also, recall, it will never be less expensive for you to purchase than it is today.

Not Changing Bad Behavior.

As of March 2016, the evaluated aggregate sum of extraordinary Visa obligation in America is $762 billion dollars. Indeed, even with all the instruction out there around obligation administration, obligation is clearly still an issue for many individuals. Thus, if this is an issue for you consider that your conduct might be the main thing keeping you down. Assume acknowledgment card obligation for instance. Paying down your Mastercard obligation or merging obligation is incredible however in the event that don’t alter the conduct that ventured into the red in any case, at that point you will be stuck in an unfortunate situation. A credit advisor or money related counsel can search through your spending and enable you to distinguish patterns. Maybe you were pouring excessively of your salary into essential costs, for example, lodging, auto installments and living expenses, and you have to assess approaches to minimize. It is critical to live inside your methods and to take a look at yourself before you wreck yourself.

Try not to make securing, sparing, and making the most of your cash harder than it must be. Ensure you converse with your Leap proficient about how to make your budgetary life normal, sound, and basic.

The Importance of your Life Insurance Agent

Life insurance is a major financial commitment.

Just as you seek out expert advisors for other financial needs – bankers, stockbrokers, and the like – your choice of a life insurance agent is a key decision.

Your life insurance agent plays an important role in the financial planning process. He or she:

  • Helps you assess your life insurance needs through a financial needs analysis.
  • Arranges for the purchase of a policy.
  • Provides on-going service, such as beneficiary changes, review and updating of

life insurance policies.

  • Assists the beneficiary in making the claim.
  • Assists you with other financial planning needs (disability insurance, retirement

planning, estate planning).

Agents are licensed and regulated by the provincial government to sell and service life insurance. They may also sell disability insurance, RRSPs, group insurance and segregated funds. Those who also sell mutual funds or other financial services like stocks or property and casualty insurance require a separate license. Not all agents handle every product.

Most agents are paid a commission by the insurance company issuing the product.

Policy dividends: How to make the best use of them

Dividends occur in participating life insurance policies. How you make use of them is vital to getting the best value from your life insurance.

These are the most common dividend options:

Increase your coverage: Use your annual dividends to add extra amounts of cover- age to your policy, at no cost to you. The most popular use of dividends, this option is called paid-up additions or bonus additions. This option also increases future cash values. Alternatively, dividends could be used to purchase one-year term insurance.

Enhanced protection: You can combine the two options mentioned above by
using dividends to purchase a combination of paid-up insurance and one-year term insurance to provide additional protection equal to a pre-determined amount. As dividends increase over time, they are used to replace the term insurance with paid-up insurance so the additional protection becomes permanent. This can be a cost-effective way of purchasing whole life insurance.

Reduce the cost of your insurance: Use your dividends to reduce your premiums on the policy every year.

Take as cash: You can, of course, take policy dividends in cash.

Leave to accumulate: Leave dividends on deposit with the insurance company to earn interest or to be invested in an equity growth (segregated) fund. Returns on the latter are not guaranteed. Dividends left in the policy to accumulate can be withdrawn at any time and, on your death, accumulated dividends, unlike cash values, are added to the face amount payable to your beneficiary or estate. Interest earned on dividends left on deposit is subject to income tax.

Premium offset: This concept, also called premium offset, is a combination of the premium reduction and the paid-up additions options. Typically, after premiums
have been paid for a number of years, say, 10-15 years, future dividends are used to pay part of the premiums and the balance of the premiums is paid by surrendering some of the paid-up additions. Remember that policy dividends are not guaranteed and that projections about when your premium offset date will take effect may have to be adjusted if dividends are lower (or higher) than anticipated. This option could result in tax reporting to you as the policyholder, if cumulative dividends exceed cumulative premiums paid. Be sure to get a full explanation from your agent.

How to make your Life Insurance work for you

Beneficiaries: Who is the life insurance for?

The beneficiary is whoever is named (designated) under the policy to receive the insurance money on your death.

Do you want to name a beneficiary (e.g., spouse), or leave the money to your estate or to a trust? If the money is left to your estate, it will be subject to probate fees when the estate is settled. If you choose a trust, be sure to seek tax advice.

Creditor Protection

The beneficiary designation affects whether or not insurance proceeds are protected from your creditors. Provincial insurance laws provide that where a spouse, child, grandchild or parent is named as the beneficiary, the insurance money is exempt from seizure by any creditors you may have.In Quebec, the beneficiary must be related to the policyholder. In other provinces, such a beneficiary must be related to the person whose life is insured.

This special protection includes adopted children in most provinces, but it does not apply to an ex-spouse unless he or she has been named an irrevocable beneficiary.

Irrevocable Bene ciary

You may name an irrevocable beneficiary or an irrevocable trust. This means that you, as the policyholder, can’t change or revoke that beneficiary without the latter’s consent. The money is protected from your creditors and doesn’t become part of your estate. (In Quebec, a spouse is considered an irrevocable beneficiary, and divorce automatically cancels that preferred status.)


Note that a designation in a will does not override an earlier beneficiary designation under an insurance policy, unless the will specifically identifies the insurance policy in question. (However, even a specific will would not override an irrevocable beneficiary designation.) In one court case, a man, in his will, had named his present wife as sole beneficiary to his estate. But he hadn’t changed the appointment of his former wife as beneficiary in his life insurance policy or identified the policy in his will. The court ruled that the former wife should get the money.


Term Life Insurance

Term arrangements give protection scope to a predetermined period (e.g., a settled number of years, or to a set age) and after that lapse. A demise advantage is paid just on the off chance that you pass on amid the term of the arrangement.

Term strategies are regularly accessible for terms of one, five, 10 or 20 years, or to age 60 or age 65. The premiums for the most part stay level amid the predetermined term however increment if that term is restored (e.g., premiums would expand at regular intervals on a five-year sustainable term approach).

Most term arrangements are non-taking an interest and do exclude money esteems or other non-relinquishment esteems. Thus, premium expenses are lower than for lasting strategies – at any rate when you’re more youthful.

Term to 100

Frequently classified as a lasting arrangement, term to 100 strategies give extra security scope through to age 100. Normally they don’t pay profits or incorporate money esteems, however some may give other non-relinquishment esteems. As needs be, premiums are lower than for conventional entire life approaches.