How Life Insurance Helps Manage Risks During Your Lifetime

Life insurance’s primary role is simple: to help provide your family with financial security when you die. However, life insurance can also help you manage risks in other aspects of your life.

Help with retirement risks

Retirement risks include not having enough income or having your savings depleted by illness or emergency. Permanent life insurance can be a tax-effective way to manage these risks.

Permanent life insurance allows you to accumulate a cash value inside the policy, within certain legislative limits, without paying income tax on the accumulation while it remains in the policy. The cash value that builds in the policy is only subject to income tax when it’s withdrawn.

During retirement, you can access this cash value as a source of income or as collateral for a loan. You can use it to deal with emergencies or pay for long-term care.

Help with health risks

If you must take time off from work because of an illness or disability requiring long-term care, your whole financial security plan could be at risk. Many life insurance policies let you manage this risk using “riders” or special additions to the policy.

Disability riders can waive premiums during the disability, provide a lump sum payment or even provide an advanced death benefit in the event of a terminal illness.

Help with estate-planning risks

A major risk is that taxes on your estate, and other costs, can reduce the amount you leave to your loved ones and your favourite charities.

For your heirs named as beneficiaries, life insurance can provide the immediate cash they need to cover final expenses, taxes and the costs of settling your estate. This helps preserve as much of your estate as possible for your loved ones.

For your favourite charities, life insurance can allow you to provide stable long-term funding without reducing the estate available to your heirs. Carefully arranged, a planned gift can be a tax-effective planning tool, balancing your financial needs and the needs of your family.

How are you using your life insurance to manage risks?

Your life insurance is a crucial part of your overall plan to manage risk. I can help you get the most out of it, not only to protect your family after your death, but also to help manage risks during your lifetime.

The information provided is based on current laws (April 2012), regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication.  Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate professional advisors.

Posted in 2012 April, Insurance, Protection | Tagged , , , , , , , | Leave a comment

Fund wins Lipper Award, others ranked on top.

Two years running, Quadrus U.S. and International Specialty Corporate Class Fund won the Lipper Award for its five-year performance two years running; in 2011, it also won for its three-year performance.

Majority of funds ranked first or second quartile

 Sixty-seven per cent of London Life segregated funds and 63 per cent of Quadrus Group of Funds were ranked first or second quartile in 2011. Even through some of the toughest market conditions, we tend to outshine much of competition. This means many of the funds we offer performed well compared with funds within their peer groups.

 Quartile rankings compare funds within a category and list them according to a series of calculations, including performance. While no one is suggesting one should chase short-term performance, we highlight the following to demonstrate how proud we are, and you can be, of the funds we offer Canadians.

 In 2011, of all Quadrus Group of Funds:

  • 63 per cent were first or second quartile
  • Folio funds – 67 per cent were first or second quartile
  • Balanced funds – 75 per cent were first or second quartile

 In 2011, of all London Life segregated funds:

  • 67 per cent were first or second quartile
  • 57 per cent were first or second quartile for the five-year period
  • Asset allocation funds – 76 per cent in 2011 and 67 per cent over five years were first or second quartile.
  • Fixed income funds – 83 per cent in 2011 and 100 per cent over five years were first or second quartile.

 With London Life segregated fund policies and Quadrus Group of Funds, we have a broad, well-balanced mix of investment options, managed by some of the very best investment managers available. We can offer you a diverse suite of funds, savings and income protection options, and the strength and stability of our organization.

 With top-ranked funds, you are in the right place.

Drop me a line when you are interested in viewing the funds’ performance.

Posted in 2012 March, Investment | Tagged , , , , , , | Leave a comment

RRSP: Segregated fund policies and you

Segregated fund policies and you

Like a mutual fund, a segregated fund is a pool of money invested in a variety of securities through professional fund managers. However, unlike mutual funds, segregated funds are only available through an insurance company. Since banks do most of the advertising for investments most people don’t even know there is another option for them in segregated funds.

Benefits and options

Because segregated fund policies are life insurance contracts, they have some special benefits and protection features.

Maturity and death benefit guarantees – Segregated fund policies protect part or all of your capital investment. They guarantee the value of the policy on its maturity date, as well as the value received on the death of the last insured person.
Lifetime income benefit option – On some policies, you can choose to receive a guaranteed income for life. So long as you don’t withdraw more than the guaranteed annual amount, your lifetime income amount will not decrease.
Potential for creditor protection – Because segregated funds are part of an insurance policy, your policy may be protected from creditors.
No trustee fees – If you choose a registered segregated fund policy, there are no trustee fees.
Estate bypass – If you designate beneficiaries, the proceeds from your segregated fund policy flow to them directly, generally bypassing the estate and potential probate fees. (Probate fees are a tax where the Estate is taxed $14 for ever $1000 in the province of BC.)
Privacy – You can keep the details of your segregated fund policy private. If an estate goes through probate, the details are available to the public. However, with segregated fund policies, the money passes privately to any named beneficiaries.

Are segregated fund policies right for you?

Segregated fund policies could be right for you if:

– You’re attracted to some level of guarantee for the  money you invest
– You’re self-employed or a professional, such as an engineer or doctor, who has high potential creditor risk
– You’re an affluent investor looking to preserve your wealth
For a description of specific features you must see the policy’s information folder. Any amount allocated to a segregated fund is invested at the risk of the policy owner and may increase or decrease in value.
I can help you find the right segregated funds to suit your risk tolerance, investment knowledge, the time you have to invest and your investment objective.

Posted in 2012 February, Investment | Tagged | 1 Comment

Want to understand more about what’s going in the markets?

I’ve previewed this Market Matters monthly investment commentary from GLC Asset Management Group Ltd. and found it very interesting. If you want to learn more about what’s happening in the markets, please check it out.

Once you have, if you have questions or concerns about how this information affects your investments, please contact me.

Posted in 2012 January, Investment | Tagged | Leave a comment