Don, 65, and Marie, 63, are about to retire. They have accumulated about $500,000 in their RRSPs and own their home, free and clear. They want to leave as much as possible to their two children. Don and Marie realize that the value of their home should pass tax-free to their children and know their RSPs will be fully taxable at that time.
It's all part of the process when you are arranging a mortgage for your new home. The bank employee inevitably asks if you would like to purchase mortgage insurance. No one likes to think about their own mortality; however, we all know deep down that stuff happens. People contract terminal illnesses or suffer debilitating or fatal accidents.
Knowing that your loved ones will be taken care of can provide some peace of mind - so you decide to accept the bank's offer for mortgage insurance. But beware the policy may actually not provide the protection you are expecting.
Many believe that if they need long term care, either in their home or in a facility, that the cost will be covered by provincial health care or other government agencies. While there are certain programs available, a significant portion of these costs are the responsibility of the patient.
Glenn had thought of his life insurance purely as a protection plan. The anti-avoidance rules, risks and general restriction of tax benefits applicable to most shelters prompted him to take a new look at his life insurance for tax deferral as well.
You may not be ready for this. Despite all you may have heard, term life insurance is not better than permanent life insurance! And whats even more confusing, permanent life insurance is not better than term life insurance!
Mathematically speaking, they're equivalent.Term insurance is cheap initially, but its premiums usually increase at regular intervals, generally every ten or twenty years. It's like renting your accommodation. Most term insurance policies only provide coverage to a certain age.