Choosing Life Insurance

There was once a father, he loved his children dearly. He vowed that he would do anything for them, and protect them. As a father, he believed it was responsibility to make sure that he would provide everything they needed and would always make sure he gave them the world. And he did love them, care for them and protect them – up until his passing. He was always certain that he would be there to care for his children that he failed to plan for what would become of his children in the event of a tragedy. Death is something that happens to everyone – it is inevitable. Protecting our family is a responsibility we owe to our family. Dealing with the loss of a family member is difficult enough, if one had to also deal with the financial hardship, it can become difficult to cope.

One of the main reasons people cite as to why they do not choose a policy is because they believe choosing a policy can be overwhelming. Insurance really is not that tricky – choosing a life insurance plan may be easier than you think.

Generally speaking, there are 3 types of plans to choose from. All plans will be some form of these types:

Term: Think of this as your phone plan, it is a pay-as-you go plan. Your insurance term can be a 5, 10 or 20 year term and you pay monthly for it for the term. You are able to renew the plan upon the completion of a term (or up to age 65). The younger you are, the cheaper the premiums you can get – the older you are, the more expensive premiums are. If you choose to end the policy while you are still alive, this type of policy will not give you your money back.

Term to 100: A term to 100 is a similar to the term plan, but it covers you until age 100. As the term is longer, your premium will be less, and you will have coverage after 65 years. Again, there is no cash surrender value for this plan, so if you end the policy or past the policy coverage term, there is no money back guarantee.

Permanent: You may have heard of this as universal or whole life insurance. Your monthly payments depend on a variety of factors – age, job, health, wealth, etc, regardless, the premiums will much higher than term or term 100 policies. Your premiums will not change, and coverage is for your entire life regardless of age. With this policy, if you give up the liability for death benefit, you can cash the money that has built up in the plan (although it may take anywhere from at least 10 years to have a decent amount).

The coverage you need really depends on you – some financial planners say that anywhere from 5 to 7 times your current income is enough, while others suggest that the amount can be lower if you have mortgage insurance in place. Really look at the options available and choose a plan that suits you. An insurance agent will be happy to discuss options with you. Everyone has different needs and need to choose a plan that suits them. But remember – be honest with your insurance agents. Hiding an illness can be a cause for the term to be voided, so be honest and help choose a plan that will protect your loved ones. Insurance does not have to be that tricky, with the right tools and guidance, you can make sure your family will always be cared for. 

Funding Children’s Education Resulting in Delayed Retirement

According to a recent CIBC Poll, conducted in June of this year, many Canadian parents are delaying retirement in order to be able to pay for their children’s education. Of all Canadians, Ontario parents are the ones most likely to put off retirement to fund their children’s post-secondary education, with 40% of parents with kids under 25 saying they have to put off retirement. 20% of those parents expect to delay retirement for at least another 5 years!  

In addition, many are also taking on loans and using up the retirement savings in order to help pay for tuition and other expenses. The conservative cost of raising a child is average at 5000 a year, when you factor in daycare, tuition, and other costs, this amount can be increased to 10,000 a year. When you have more than one child, this amount only increases.

This is why planning ahead, using a financial advisor, and setting up an RESP can help secure that enough funds will be ready when your child is ready to go to post-secondary. Delaying retirement may be a necessity for some families, but it does not have to be. Be smart, plan ahead and retire when you’re ready to.

How Health Insurance Works

When buying a health insurance plan, buy one that works for you. Often times though, insurance can be confusing. So we’ve decided to break it down for you.

In Canada, basic health care is covered by provincial plans, though provincial plans, like OHIP for instance. This covers your visits to the doctors, specialists, hospital acute care, diagnostic services (x-rays, blood tests), etc. Services you may need outside this core protection is paid out of pocket, or can be shared through having an extended health care pan. For some people, they are provided coverage for an extended health plan through work, for others who are not covered through work, when an expense does arise; they are responsible to pay out of pocket.

For those individuals, having an extended health plan can pay the following (coverage differs based on plan and price):

• Dental Care (cleanings, fillings, extractions, etc.)
• Hospital Accommodation (semi-private and private rooms)
• Medical Equipment (casts, crutches, wheelchairs, etc.)
• Prescription Drugs (medication prescribed by doctors)
• Private Duty Nursing (home care nurse, special nursing needs)
• Registered Therapists and Health Practitioners (physiotherapy, chiropractic services, orthotics etc.)
• Vision Care (eye exams, glasses, contacts)

When you purchase a plan, you are protected for these services (depending on your plan coverage). Looking at this list, it becomes clearer that extended health care really covers a lot of things that are needed to maintain a healthy lifestyle. When you purchase a plan, you pay a premium that offers you this protection in the event that it is required. Your medical providers will them submit those claims on your behalf, and will cover these expenses. It’s always good to choose a plan that offers you the greatest protection of services you may need. Speaking to an insurance agent will help you figure out which plan works for you, and make it work for you.

The Choice of My Life!

I have a confession to make. I’m going to turn 40 in a few months. I felt like the last time I blinked I was 25. How 15 years just flew by, I have no idea. Life moves pretty fast. When I was single, I was care-free. With everything, but mostly about my health – I took it for granted. I figured I would always be healthy and that my body would always support me. But as I age, I can feel my body getting weaker, and I can see by my growing receipts that OHIP just doesn’t cut it for me anymore. 

When you get to my age, you realize that investing in your health is an important responsibility. Not because of me alone, but because I have a family now, I have a wife and children who rely on me – and I need to be well for them. Having my first child really put things into perspective, it made me realize that I have a responsibility to a beautiful child, and I owe it to her to be fit, healthy and strong. 

That’s why I got health insurance; I did not want to compromise my health. I wanted to be a father who was present and active in my child’s life. I wanted to be a father who was able to take care of myself. And that’s why I got health insurance. 

But honestly speaking, having the insurance has paid for itself.  I would have spent the same amount on prescriptions otherwise, but having the insurance provided me a sense of security and ease that my health was taken care of, and allowed me to focus on the more precious things in life, family.