All posts by Financial Independence Hub

The Pros and Cons of Universal Life Insurance

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By Lorne Marr, LSM Insurance

Special to the Financial Independence Hub

Universal Life Insurance gives you flexible, cost-effective coverage that lasts a lifetime. It can be personalized to suit your changing needs and has a combined tax-advantage investment component that you can manage according to your risk tolerance and financial goals. Universal Life Insurance was invented by the recently deceased George R. Dinney in 1962. He explains the concept in his authorship of “Life Insurance as a Game.”

Universal Life Insurance allows you to adjust your premium payments (reasonable limits apply) as your needs or situation change. It is the ideal choice for people interested in flexible coverage. Unlike term insurance, which covers for a set number of years, universal coverage protects your family for life, as long as you keep up with the premium payments.

The policy has an investment component that gives you the opportunity to grow your wealth, so you have the option of using your life insurance while you are still alive. This means you can fund financial goals or leave more to your beneficiaries.

All the premium payments you make go into a policy fund. This fund pays for the cost of your coverage plus investments. The balance remaining after coverage costs are invested on a tax-advantaged basis. There are a variety of investment options for you to choose from, based on your risk tolerance and financial objectives.

How much your investment will grow depends on the performance of your investments and the amount of your premiums. The money in the investment portion of your account is yours. You can use it to make premium payments or a source of savings. You can use it as collateral for a loan, withdraw it outright or just let it grow for financial security for your loved ones. Don’t forget that borrowing or withdrawing funds from your policy reduces its cash value.

Pros of Universal Life Insurance

Universal Life Insurance provides many benefits, such as: Continue Reading…

Dispelling 3 myths of Tax Preparation

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By Gennaro De Luca

Special to the Financial Independence Hub

Most people pay a lot of attention to how they invest in order to build a portfolio and maximize their returns. But when it comes to doing their tax returns, things tend to be different. Many of us – entrepreneurs, business owners and managers – keep doing it the same old way. We hand over all our pertinent documents to an accountant or tax-preparation service and fork over hundreds or thousands of dollars in fees. Well, May 1st, 2017 is the tax deadline this year.

Today, 80 per cent of the 14 million plus tax returns filed every year in Canada are processed digitally and that figure is increasing. This means accountants and other professionals file digital returns on behalf of their clients or, what is also happening with more frequency, people opt for DIY (Do it Yourself) tax software and do it on their own.

As a long-time wealth-management advisor and Certified Financial Planner, I know that a few myths persist about tax returns. Here are three:

MYTH 1: If you’re self-employed or own your own business, you need an accountant to do your tax returns.

MYTH 2: Preparing tax returns is expensive, especially if you have a small business or are self-employed.

MYTH 3: DIY tax software is easy enough to use for even very complicated tax returns.

The answer is a digital return combined with the services of a tax professional. That’s what we do at TAXplan Canada and we just added a new feature that takes tax returns into the modern age. You can download our new app Sidekick to your mobile device. It allows you to take photos of all your documents and then you send them in. The tax professional does the rest. There is no other service like this in Canada. Continue Reading…

The Missing Middle: are Townhouses the answer?

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By Penelope Graham, Zoocasa

Special to the Financial Independence Hub

Shelling out a million for a home is no longer just an issue for downtown dwellers: it now costs that much on average to purchase a detached house in the ‘burbs, according to several new reports.

The February numbers from the Toronto Real Estate Board reveal regional home prices have surpassed two pricey milestones; average detached home prices in the city proper have hit the $1,500,000 mark, and $1,106,201 in the surrounding GTA. That’s tough news for those planning to trade a lengthy commute for affordable housing, as the competitive factors from the hot Toronto real estate market now stretch as far as the Niagara Region.

Too few houses to go around

The latest narrative around GTA housing is the scant supply of listings, with just 793 detached houses changing hands last month. “The listing supply crunch we are experiencing in the GTA has undoubtedly led to the double-digit home price increases we are now experiencing on a sustained basis, both in the low-rise and high-rise market segments,” said Jason Mercer, TREB’s director of market analysis. “Until we see a marked increase in the number of homes available for sale, expect very strong annual rates of price growth to continue.”

And it’s not just the resale market that’s too hot to handle. January numbers from the Building Industry and Land Development Association (BILD) report newly-built low-rise housing –- whether it be detached, semi-detached, or freehold row houses –- also exceed the average million mark, as fresh stock is immediately snatched up. Continue Reading…

Pack your bags, not your stress this March Break

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By Brigitte Gougeon

Special to the Financial Independence Hub 

Taking a vacation is supposed to be a time to relax and enjoy a week away from the stresses of work and daily commitments. But with two in five Canadians planning to travel during March Break, there will be many people worrying about some aspect of their trip.

A recent TD Insurance survey found that for nearly half (49%) of Canadians planning to travel, the potential of falling ill while away was one of the top three causes of stress. Other top travel stress factors were losing a wallet or travel documents (58%) and other personal items such as a camera or mobile phone (41%).

Even though Canadian travellers are worried about the prospect of needing medical care while they’re away, only four in ten (39%) report regularly buying travel insurance. Canadians who don’t regularly buy travel insurance list a variety of reasons for not doing so, including it not being top of mind, thinking they don’t need it or thinking it’s not worth the cost.

Those planning to travel over March Break should take care to make travel insurance part of their broader travel-planning checklist. The cost of not buying travel insurance can have a devastating financial impact. Covering unexpected medical costs out of your own pocket can be financially ruining as, on average, government provincial health insurance will only cover a small portion of medical expenses. And even then, that coverage is capped.

Travel insurance has to be bought BEFORE your trip

Even when taking a short trip across the border –- which many Canadians take for granted –- you never know if something unexpected will crop up, like a fall or accident that requires medical attention. To safeguard you and your family, it’s important you ensure you have the right coverage that fits your unique needs and situation. And remember, you have to get insurance before your trip starts; it won’t protect you if you get the insurance after an accident happens or your trip is cancelled.

Additional travel tips for cutting down on stressors: Continue Reading…

Life Planning Basics: The Importance of an Emergency Fund

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Photo Credit: Pexels.com

by Jackie Waters

Special to the Financial Independence Hub

When setting up your financial life plan, it’s important to understand the absolute necessity of an emergency fund. Before you can start saving for what you want in your future, you have to save some for all the stuff you don’t want or expect to happen.

The main purpose of an emergency fund is to protect against life’s many contingencies. This includes, but is in no way limited to; job loss, medical co-pays, car troubles, home repairs, child expenses, and unexpected travel needs. Without an emergency fund, you’re forced to turn to other means to pay for things you simply can’t ignore. Many turn to credit cards, which increases personal debt and leaves people in insurmountable holes. It’s nearly impossible to invest in your future when you’re sitting under a pile of debt.

How much should be in your emergency fund?

Continue Reading…