Tuesday, July 25, 2017

Recent change in insurance that may effect you


There is an English expression - "May you live in interesting times". If you are in the financial industry (like I am), this is a true curse. Nowadays, everything is in constant flux and keeping up with all the changes is difficult.


However, my pain is your gain. Most of the changes in this industry have made it easier and faster for consumers to obtain insurance coverage.

Life Insurance - Technology has finally caught up for this product. I can now complete a life insurance application with a client, online in as little as 15 minutes (the small print - conditions apply). The insurance company often does not require blood and urine samples to complete the application process. Some companies will give you a stable rate for the term that you pick (up to 30 years or until age 65). In addition, there may be price advantages to consolidate all your insurance under one policy. For hard to insure clients (due to medical reasons), there are more options available than ever before, and you can qualify for up to $500,000 of insurance.

 
Living Benefits - This includes Critical Illness Insurance, Disability Insurance and Long Term Care Insurance. There was a recent change in Canadian law (The Genetic Non-Discrimination Act) that says that the insurance company cannot ask you if you had a genetic test and what the result was. This is anticipated to result in higher claims for the insurance companies and as a result cause higher premiums. If you've been intending to purchase one of these policies, now would be a good time to do so.

 
Group Benefits - Much like housing prices and minimum wage is increasing, so too is the cost of traditional group plans. At the same time, the range of options available for employers to offer their employees is expanding as well. Whether you have Millennials, Generation Xers or Baby Boomers, there are plans available to attract them all. You can have a traditional plan, one that pays for gym memberships, a health spending account, a profit-sharing plan, .... I think you get the idea - If you can dream it, it is now available.
 

Travel Insurance - More people are travelling all the time. If you travel outside of Ontario, please ensure that you have Emergency Medical Travel Insurance - either on your group plan or on an individual basis - as the Ontario government plan is limited in what it pays. If you have travel coverage on a credit card, check the fine print - generally, you need to pay for the travel with that card and you may have no coverage if you're over 65. In addition, most plans now have a clause that the insurance company reserves the right to not pay the claim if your health prior to the start of the trip was "unstable". Not sure if that clause would affect you? Give me a call and I can let you know my opinion or send off a request to the insurance company (in advance of your trip) so that there will be no surprises.


In summary, to quote Jean-Baptiste Alphonse Karr, "plus ça change, plus c'est la même chose" or in English "the more things change, the more they stay the same". Insurance policies may be your best option to insure you and your families financial health against the unexpected. More options exist today and obtaining coverage may be easier than ever. Please don't procrastinate. Summer is a great time to review what you have. If you have any questions, feel free to call me.

 

Monday, March 27, 2017

March 22, 2017 Canadian Federal Budget Highlights





The 2017 Federal Budget was released on March 22, 2017. It  promotes the idea of making the tax system fairer for the middle class. Some of the items that may affect you, your family and your business include the following items.

Cracking down on tax evasion - The budget proposes to spend $524 million over five years on curbing tax evasion and improving compliance. The efforts are projected to add up to $2.5 billion in revenue over the five-year period. In other words, CRA will be doing more audits on individual tax payers.

T4 Slips - Effective for the 2017 and subsequent tax years, it is proposed that T4s will be permitted to be issued electronically without the employer first being required to receive the express consent from the employees. In order for this to be permitted, safeguards required by CRA must be in place. Paper copies must be provided to employees who specifically request them. 


Tuition Tax Credit - Currently, the 15% tuition tax credit is not available with respect to occupational skills courses offered by a university or college that are not at the post-secondary level. The Budget proposes extending the eligibility for these credits to such skills courses taken after 2016. For instance, this could include courses taken to improve numeracy or literacy to improve job skills.


Public Transit Tax Credit - This 15% non-refundable tax credit is available against the cost of certain public transit passes. Effective July 1, 2017, it is proposed that the Public Transit Tax Credit will be eliminated. Instead, the government will allocate funds to improve public transit.


Parental Benefits -  The proposed changes to parental benefits would allow parents to choose to receive employment insurance parental benefits over an extended period of up to 18 months at a lower benefit rate of 33% of average weekly earnings. Parental benefits will continue to be available at the existing benefit rate of 55% over a period of up to 12 months.


Caregiving benefit - The government’s proposed new employment insurance caregiving benefit of up to 15 weeks, which would be in addition to the current compassionate care benefit and the program for families with severely ill children, will cover a broader range of situations where individuals are providing care to an adult family member who requires significant support in order to recover from a critical illness or injury.


Caregiver Tax Credit - Currently those providing “caregiving” to another are potentially eligible to claim three different tax credits: the infirm dependent tax credit, the caregiver credit and the family caregiver tax credit. The Budget proposes simplifying the credit system for caregivers, by replacing these three credits with one new credit entitled the “Canada Caregiver Credit”. This will be effective for the 2017 and subsequent taxation years.  


Canada Savings Bonds Being Eliminated - After more than 70 years, Canadians will be saying goodbye to a once-popular option for investing. Sales of new Canada Savings Bonds will be discontinued in 2017.

Tax planning using private corporations - After initiating a broad review of tax strategies that typically benefit the wealthiest Canadians in last year’s budget, the government says it’s continuing to examine the use of tax planning strategies involving private corporations. Some areas that are being reviewed include such strategies as income sprinkling (using a private corporation and a shareholder’s family members), making passive investments through a corporation (instead of personally) and converting regular corporate income to capital gains.  No specific proposals were outlined in Budget 2017; the government says it expects to release a paper in the coming months with more detail.