life insurance posts

Planning for the future of a disabled family member can be a stressful endeavor for parents and relatives. While there's an overwhelming abundance of information out there, it's not necessarily obvious what each individual qualifies for. Parents or caregivers often feel taxed enough by the emotional and physical demands that can come with caring for a mentally or physically disabled person.

I recently spoke with Chris Das, a Sun Life Financial Advisor, and asked him to break down and simplify some key strategies that can help Canadian parents provide for a disabled child.

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I recently covered the topic with CTV's, Daryl McIntyre (you can watch the YouTube video here).

Clutter is so difficult to deal with many individuals have no idea what documents they need to keep, which they should have and where they should be stored.

There are three keys to dealing with your financial clutter:

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Life insurance is an oxymoron. What you're getting (or what your survivors are getting) are death benefits. Still, let's accept the expression for what it is.

Say that you're the breadwinner in the family, and you bought life insurance long ago, long before you thought of getting married (and long before any would-be spouse would be looking at you as marriage material).

But now that you ARE married, should your spouse get a life insurance of her or his own?

Two of Canada's largest life insurers have significantly hiked their rates on some permanent life insurance products and more companies are set to follow suit as insurers buckle under the pressure of low interest rates, a wealth advisor says.

Insurance companies Sun Life and Manulife have increased the cost of Universal Life insurance by as much as 22%, according to an article by the Financial Post's Wealthy Boomer, Jonathan Chevreau. He quotes John Nicola, chairman and CEO of Vancouver-based Nicola Wealth Management as saying that this is the start of a trend that will see other insurers significantly hike premiums, possibly by as much as 50%.

Young Universal Life policy holders or joint-last-to-die policy holders have been hit with the largest increases.

If you've bought a house recently, you've been offered mortgage life insurance. In fact, it probably happened the minute you signed the papers. There's a good reason for that. Your mortgage lender wants you to think about what will happen to your house if you die. Let's assume you bought your house with your spouse. Will they be able to carry the mortgage payments on their own? If not, they'll lose the house. That's an important thing to think about, yet mortgage life insurance isn't the best solution. Most people will get better coverage from a term life policy. Here are a couple of reasons why.

First, mortgage life insurance is expensive. Your premiums are based on the size of the mortgage you took out on the day you bought your house. Over time, the size of your mortgage will decrease, but your premiums stay the same. Let's say you take out a 25-year mortgage for $300,000. That's what your premiums will be based on. If you die 15 years later, how much will be left on your mortgage? Maybe $150,000 (you can do your own calculation here). That's what the policy will pay out, but all along you've been paying premiums on the original amount of $300,000. Plus, you're essentially paying premiums on two people. But if you and your spouse die at the same time, you won't get twice the benefit. On the other hand, if you have a $300,000 term life policy, your benefit will be $300,000, regardless of when you die. And if you and your spouse each have a policy, and you both die, you get a $600,000 benefit. That's what you're paying for, right?