Saturday, October 24, 2009

Critical Illness

No one plans on becoming ill, but when something serious befalls us, we can help ourselves and our families by being financially prepared.

We all know someone whose life has been affected by a heart attack, stroke or cancer. The good news is that advances in medical science means there's a better chance of surviving a critical illness than ever before. However, a critical illness often brings overwhelming medical and financial burdens.

That's why critical illness insurance was envisioned by a physician and can be so important to you and your family. It's coverage I strongly believe in and now Great-West Life is offering a two month premium holiday if you apply before Dec. 31, 2009. That's the equivalent of two months of coverage in the first year at no charge, after the policy is in force and the initial payment is made.

Many of us put off making buying decisions, waiting until tomorrow or until the economy turns around. If you delay purchasing adult or child critical illness insurance, age or health may affect the ability to qualify for coverage later.

When you insure against a critical illness today you help protect yourself and your family from the financial and emotional impact of a critical illness and receive a two month premium holiday from Great-West!

Give me a call to discuss how critical illness insurance can make a difference and how you can take advantage of this special premium holiday offer.

Tuesday, October 6, 2009

Retirement planning with Guaranteed Minimum Withdrawal Benefit products

Guaranteed Minimum Withdrawal Benefit (GMWB) products have become hugely popular with clients. This popularity is most likely attributable to the growing awareness that individuals will increasingly have to be responsible for looking after their own retirement needs. Companies and perhaps Governments too, face significant challenges in providing retirement income to their retirees and citizens.

Canadian’s are aging and within the next 5 to 10 years there will be the largest number of people at retirement age our country has ever had in its history.

This group of Canadians aged 65 and older will control the majority of investible assets for many years to come. In 2008 they controlled $1.93 trillion and are forecasted to control $4.75 trillion in 2018. They are and will increasingly demand products that will help them fund their retirement years.

On the face of it, segregated funds with the GMWB don’t guarantee anything more than the equivalent of principal return, but these features allow the client to enjoy some upside without risking capital — a guarantee that appeals to aging Canadians.

The principal features of GMWB products address the three key risks facing pre-retirees and retirees, outliving one’s money, poor market returns and inflation. These three risks are addressed by guaranteeing income for life or a fixed period of time. Clients participate in the stock markets with limited downside risk and the potential to lock-in market gains. As well, a notional bonus adds 5% a year to the deposited capital for every year that the client does not take his or her first withdrawal.

The income period can vary, as well. Starting in the year in which the client retires — as early as age 50 and as late as age 70 — the plans offer 4%-7% of the deposit back in annual income, with most plans continuing until the client dies. And let’s not overlook the basic features of segregated funds, guarantees at maturity and death, probate avoidance and creditor protection.

If you do not have a company Defined Benefit Plan or pension – give me a call and we can see how this product class fits into your financial plan.