All posts by Financial Independence Hub

8 reasons you may get turned down for Life Insurance

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Depositphotos_111789972_s-2015By Chantal Marr, LSM Insurance

Special to the Financial Independence Hub

For some people, getting the life insurance coverage they need is not easy. Factors such as health conditions and lifestyle choices play an important role in determining whether or not a company sees you as a qualified candidate. Lying on your application to hide potentially damaging facts won’t help. It might get you a great policy at prime rates, but when it comes down to filing a claim, the insurance company will discover the truth, and your claim will be denied.

We reached out to Gisèle Babineau, Chief Underwriter with Assumption Life, for the most common reasons a person may be denied life insurance coverage. The reasons for being declined vary from one company to another, and there is also a significant gap between a re-insurer and insurer because many insurers do not shop their declines with their re-insurers. However, in general, these are the most common reasons why an application may not be approved.

Medical Reasons

A medical condition under investigation

If you have some symptoms of an illness or disease, but all of the results aren’t in yet, your medical condition is considered under or pending investigation. During this period, you are considered a high risk applicant and the insurance company may deny coverage or delay their decision. Once you are cleared of any possible long-term illness or disease, the company will probably approve your application or ask you to re-apply with the new doctor’s report.

High grade cancers

Cancer can develop in any part of the body. Where it occurs determines its type. For example, lung cancer develops in the lungs. All types begin as a tumor and how the affected tissue looks under a microscope indicates how quickly the tumor cells will grow and spread. Based on the appearance and other factors, doctors can assign a numerical “grade.”

The grade of the cancer is not the same as the stage. Stages refer to the size or extent of spread. Malignant tumors are very low grade and almost always can be completely removed. High grade cancers tend to grow quickly and spread rapidly, putting your life at a higher risk.

Nervous disorders Continue Reading…

How to use a credit card strategically for emergency expenses

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Emergency FundBy Alyssa Furtado, RateHub.ca

Special to the Financial Independence Hub

You can’t plan for something you don’t know is coming.

Accidents and emergencies are inevitable and a financial cost is often attached to these surprise incidents. So what do you do when you find yourself with an unexpected emergency expense? One option is to use balance transfer credit cards.

Balance transfer credit cards are great tools to help you pay off your debts sooner. They offer a low interest rate (sometimes 0%) for any debts you transfer to the card for a limited period of time. By minimizing interest costs, the money you put towards your debt will directly pay off the amount owing and not go towards fees. While there can be costs associated to balance transfers — like a fee of 1% to 5% for transferring a balance or an annual fee — the interest savings can outweigh the cost of the fees.

So how can you strategically use a balance transfer credit card for emergency expenses? Charge whatever emergency expense you make to a card you already have, immediately apply for a balance transfer card, and quickly transfer over the balance to the new credit card.

There are considerations you need to know before applying for a balance transfer credit card, such as: Continue Reading…

Stop believing real estate has magical investment powers

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Beautiful view of Vancouver, British Columbia, Canada
Expensive Vancouver, BC

By Steve Lowrie, Lowrie Financial

Special to the Financial Independence Hub

If you found yourself on the high seas, and the captain and crew were battening down the hatches, what would you do? Depending on how fast they were scrambling, you might at least make sure your life preserver was within reach.

If the Canadian real estate market were an ocean liner, recent government words and deeds have sent some pretty solid warning shots across the bow – especially for properties in the Greater Toronto and Vancouver regions. Real estate investors who may have forgotten the essential rules of self-preservation would be wise to consider the following:

In a June announcement, Bank of Canada Governor Stephen Poloz warned: “The pace of house price increases in Toronto, and especially Vancouver, is unlikely to be sustained, given the underlying fundamentals.”

Several provincial governments have been looking for ways to manage their real estate markets. For example, this July Globe and Mail article noted that British Columbia was trying to “cool the Vancouver market” by adding a 15 per cent transfer tax on property purchases made by international buyers. Continue Reading…

Is RV Traveling a sound Retirement Strategy?

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rv-925610_640
Living the RV dream. Photo courtesy Pixabay.com

By Barney Whistance

Special to the Financial Independence Hub

At some point we’ve all daydreamed about what our retirement might look like. For some, a cabin in the woods might be their dream life. Others may want a condo near the beach or high-rise apartment in the city. Many daydreams also include travel, both in and outside the U.S.

Ample Hollywood movies about the joys and headaches of the retirement life have given nods to the recreational vehicle (RV) retirement lifestyle as well. From ex-CIA man Jack Byrnes’ sleek black Fleetwood RV in Meet the Fockers, to David and Linda Howard’s homier Winnebago in the movie Lost in America, RV living may represent a luxury life of leisure for many Americans.

One former co-worker of mine, shortly after his retirement, sold his home to buy a fancy new RV. While I was able to meet him at his retirement party and do a short quiz on his reasoning, the decision never quite added up for me. I decided to do some additional research to determine if RV-living was a sound and viable financial decision for my own retirement.

Full-time RVers, also known as full-timers, are people who live, work, and play in their RVs. Often they plan their lives and moves well in advance, but they’re also known to pick up and go on a whim, or to follow the weather on a seasonal basis.

However, there are a few considerations when contemplating the full-time RV life. Here’s a breakdown of points to ponder while deciding whether it’s the best lifestyle for your needs.

Finances

RVs can be purchased in a wide price range – anywhere from $3,000 to $3 million – which makes them perfect for any budget. Continue Reading…

Make the Family Cottage less Taxing this year

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Cottage On The Carpenter Lake, Canada

By Fraser Willson

Special to the Financial Independence Hub

As the days of summer dwindle to a precious few, the last few weekends at the family seem especially poignant now. And while those thoughts may warm you up a bit, you don’t want to be left out in the cold if you’re not aware of the financial implications when you sell the family retreat or if you transfer ownership to your children this year.

Unlike with your home, transferring ownership of the family cottage to anyone other than your spouse may trigger a taxable capital gain on the appreciation in value during your ownership. You may want to consider leaving the property to your spouse. Doing this helps defer the tax bill until the property is sold or passed on to future generations.

In addition, there are a number of strategies that you can undertake to help reduce and potentially avoid the capital gains tax, including:

Selling and taking back a mortgage

If you decide to sell the cottage to your children, consider taking back a mortgage by offering your children a mortgage loan as payment for the purchase price. The capital gain can be spread over a period of up to five years. And you can forgive the mortgage in your will so your children will own the cottage without debt or paying taxes.

Transferring ownership while you’re alive

Transferring ownership of the cottage to a trust that designates your children as beneficiaries will trigger an immediate capital gain. But from that point on, your heirs are responsible for taxable gains. They won’t pay those taxes until they sell the property or transfer ownership.

Declaring the cottage as your principal residence

You can have only one principal residence for tax purposes. So if your cottage has gone up in value more than your home, consider designating the cottage as your principal residence, which isn’t subject to capital gains tax.

Buying life insurance

Family members can use the tax-free proceeds from a life insurance policy to help pay capital gains taxes on your cottage when you leave it as part of your estate.

If you plan to sell or transfer ownership of your family cottage this year, make sure your finances align with your goals. Doing so can help ensure you stay on track to reach them.

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