Recreational and Medical Cannabis

Medical Marijuana has been legal in Canada since 1999. There are a wide range of conditions that it is used for. Not all insurance plans will pay for medical marijuana. Every insurance company has a different list of medical conditions that they will cover. In most cases, you need to submit a "Prior Authorization" form to the insurance company before claims will be paid.  Some medical conditions that have been approved include:

• Cancer (pain and nausea)
• Multiple Sclerosis (pain)
• Rheumatoid Arthritis (pain)
• HIV / AIDS
• Palliative Care
• Epilepsy (children only)
• Multiple Sclerosis (stiffness and involuntary muscle spasms) i

Currently all medical marijuana requires a doctor's prescription and must be ordered online.

 

The two main chemicals in Cannabis that have been studied are:

• Tetrahydrocannabinol (THC) - the chemical that makes you "high"
• Cannabidiol (CBD) - the chemical with medical applications

Most Medical Marijuana is primarily CBD. Most patients currently purchase it as an oil, though topical creams and capsules are also available.

 

Recreational Cannabis will soon be legal in Canada. The current anticipated date is October 17, 2018.

 

Once Cannabis is legal, Canadians (in most provinces) will be permitted to:

• Purchase fresh or dried cannabis, cannabis oil, plants and seeds.
• Possess up to 30 grams of dried legal cannabis or its equivalent in public.
• Share up to 30 grams (or its equivalent) of legal cannabis and legal cannabis products with other adults
• Cultivate up to four plants at home (four plants total per household). This option may not be available in condos and rental units.
• Prepare various cannabis products (such as edibles) at home for personal use, provided that no dangerous organic solvents are used in the process.

In Ontario, the legal age will be 19+ and it can only be smoked on Private Property. Note - Non-Smoking rules take precedence. Where it can be purchased has not yet been determined.

 

If you travel to the U.S., entry is at the sole discretion of the U.S. Customs and Border Protection officers on duty - and they have a lot of latitude to ask questions to determine the admissibility of a foreign national. U.S. immigration lawyers are already warning Canadians that they could be denied entry to the U.S. - or barred from the U.S. for life - if they admit to smoking cannabis to a border agent. The drug is still a prohibited substance under U.S. federal law, despite legalization in some U.S. states.

 

If you have additional questions (such as how does this affect the workplace or what may be covered on your health plan) and want to discuss this area further, give me a call.

Naming a Beneficiary on your Insurance & Investment Policies

In Ontario, the value of naming a beneficiary versus leaving money to your estate is significant.  

If you name a beneficiary, an insurance company is obligated, under the Insurance Act, to pay any death benefit proceeds to the named beneficiary on record. Because the death benefit proceeds do not pass through the estate, they not only avoid the delays of settling the estate but also bypass probate and other estate administration fees. In Ontario, probate fees on assets over $50,000 are 1.5%. Other estate administration, accounting and legal fees could be another 5% or more depending on the complexity of the estate.

The other reason to name a beneficiary is it makes the transaction private. Unlike a will - which becomes a public document, available for anyone to see when it goes to probate - naming a beneficiary means that only the person named needs to know the specifics. The extra privacy can prevent jealousy and tension among those named (or not named) in a will and reduce bad feelings over "getting my fair share".

Do you have a Life Insurance Policy, a Registered Investment Policy (e.g. a RRSP) or a Segregated Fund Investment Policy? All of these should have both a primary and a contingent beneficiary named on the policy (not in your will).

If you're not sure whether you have named a beneficiary, get in touch with me and I'll be pleased to help you out.

Do you need travel insurance?

We all know that medical expenses in the USA are expensive, but they are in other parts of the world as well.  Here is an example of costs in Mexico due to appendicitis.  14-year-old Male: Abdominal Pain Led to Appendicitis in Mexico Tomas was in Mexico during spring break. After a few days, he started having severe abdominal pain and saw the hotel doctor. He was diagnosed with appendicitis and sent to the hospital by ambulance. Tomas was in the hospital for two days before he was released with various prescriptions and caught a new flight home. Hotel doctor fees ......................................$950.50 Ambulance fees ........................................$1,200.00 Hospital fees .............................................$22,530.47 Doctors' fees .............................................$7,165.00 Prescriptions .............................................$47.11 Provincial medical ....................................- $330.16 Amount paid by TuGo (the insurance company)  ......$31,562.92   If you have a group plan, Emergency Medical coverage may be included in your plan.

The need for Travel insurance

A study released by the Bank of Montreal (BMO) on March 24, 2015 examines why and how Canadians use travel insurance.

One of the findings of the study is that 36% of Canadians do end up requiring medical attention while they are on vacation, and that many have had to file a claim when they returned home in order to recover out-of-pocket expenses. Among those with travel insurance, 76% described the claims process as "easy" and none of those surveyed had their claims rejected. BMO says that 74% of those who had filed claims received the full balance of what was owed and 26% were partially reimbursed.

 

If you leave Ontario, do you ensure that you have Out of Province Medical Insurance? It can be part of your benefit package or on your "gold" credit card or purchased separately through your travel agent or a life insurance agent.  

Have you verified what it covers? For example some group policies will only cover you for travel in Canada. Some credit card policies will only cover you if you are under 65 and purchased the travel package using that card.

The best way to ensure that your claim is paid for is to contact the insurance company at the number on your wallet card as soon as possible. Not only will you know right away what is covered, they will often guide you through getting the medical assistance that you need.

Is all publicity good?

I was featured in Acclaim, a magazine published by a great networking group - CAWEE (a women's networking group) .  Check them both out The article is titled - What do K
etchup Viscosity and Insurance Have in Common?  The Answer is Heather Freed

. 

More about Heather Freed

The following article appeared in the "Off Bay Street News" in the January 2014 issue of The Insurance and Investment Journal.

Travel Insurance

The following article was published in the April 2013 issue of The Insurance & Investment Journal.  It discusses some of the things that could go wrong when you travel out of your home province and what you need to do to protect yourself.

Travel Insurance - do you need it?

Vacation season is fast approaching and with it, comes the question – “Do I need to purchase travel insurance?” The simple answer is if you are travelling outside of Ontario, OHIP may not provide adequate coverage. For example, Cuba now requires proof of private Emergency Medical Insurance coverage before you can enter the country.

Travel insurance comes two ways – Emergency Medical only or Complete coverage that includes coverage if your bags are lost, you need to cancel the trip due to a medical emergency, the plane is delayed and you miss your connection to the cruise ship, as well as the Emergency Medical coverage.

If you are enrolled in a group benefits plan, you may have emergency medical coverage already – check your booklet. Similarly, it may be included on your Premium Credit Card (normally only if you are under age 65).

Should you need to purchase coverage for your trip, make sure to answer all medical questions completely. Most individual plans will not cover pre-existing conditions if they are not stable prior to your trip and may not provide any coverage (even unrelated) if you do not answer all questions fully.

So, if you’re travelling outside of Ontario this summer, talk to a lisenced insurance gent prior to your trip.

For more information, to help you decide if you need to buy Emergency medical travel insurance – check out these articles in the Toronto Star:

• Getting Sick in the States
• Protect yourself with a travel health insurance policy

Virtual Shoebox 

 

The Canadian Life and Health Insurance Association Inc. has developed an extensive Virtual Shoebox. It is a document that encompasses an inventory of all of your personal and household financial information.   If you have ever had to go through someone else's documentation after they became sick or died - you would make sure that you kept a document like this up to date.   You can get the form on line (click here) or I can get you a hard copy (if you prefer). Just send me an email with your mailing address and I'll send it off to you.

Insurance & the Movies

Many of you know that I am a TIFF (Toronto International Film Festival) fan and see 20 movies during the festival. Now that it’s over for another year, I’d thought that I’d give you a synopsis of some of the films that I saw and the insurance lesson they have.

This year one of the movies I saw was a 3D animated musical feature called The Suicide Shop. In the shop, owned by a family, they sell items of use to people who want to commit suicide. Everything from single bullets (you only need one) to poisons (pills, liquids, fast and slow acting) - you get the idea. This France / Belgium / Canada coproduction was directed by Patrice Leconte and was very humorous. It has a Canadian distributor so may play here.

It got me thinking about the 2 year contestability clause on new insurance policies. One type of death specifically mentioned in your policy is that the insurance company will not pay out the policy if you commit suicide in the first 2 years. However, the clause is much broader and gives the insurance company the ability to review the file for any inconsistencies or omissions in your file should you die in the first 2 years the policy is in force. Check out page 28 of the Life Insurance brochure on the CLHIA web site for more information about contestability.


I saw two movies (Argo and Love, Marilyn) where information came to light a number of years after an event. It reminded me that often a person would like to leave money to someone else without everyone knowing that they have left the money or without everyone knowing how much money they left them. While everything in your will is part of the public record, when an insurance policy has a Named Beneficiary, this information remains private.

Argo is the fictionalized story of the 1979 / 1980 escape of 6 members of the US embassy in Iran who managed to escape with the assistance of the Canadian embassy and the Canadian Ambassador, Ken Taylor. This story is based on declassified documents and was directed by Ben Affleck. This movie is being released Oct. 12, 2012.

Love, Marilyn directed by Liz Garbus, is a story of the private life of Marilyn Monroe. It has been 50 years since her death and this documentary is based on personal papers, diaries and letters that have recently surfaced. If it plays in theatres, it’s also well worth watching – especially if you’re a Marilyn fan.

I saw Clandestine Childhood, an Argentina / Spain / Brazil co-production directed by Benjamin Avila. It is the fictional story of a child in 1979 Argentina whose parents are dissidents, but based on the director’s personal experiences. Once things go wrong, it’s almost impossible to “fix” them. This movie shows great strength of character of all of the people in the movie.


The insurance lesson – once you get sick, it is very difficult to purchase insurance – so you’d better do it now before anything “bad” happens.

The final movie I’m going to discuss today is The Brass Teapot. This is a US film, directed by Ramaa Mosley. The premise of the movie is how far would you go to financially profit from bodily injury? This 2000 year old teapot produces US Greenbacks whenever the owner gets hurt. However, it also has addictive properties, much like the ring in the J. R. R. Tolkien series Lord of the Rings.


Okay, you ask – how does this relate to insurance? If you have applied for individually medically underwritten insurance, a record of that application exists at The Medical Information Bureau. The insurance companies use these records to ensure that they know how much insurance you have in force. This ensures that you can’t become too greedy – like almost happened in the movie.

If you’d like to discuss these and other movies with me, give me a call.

A list of documents you need to gather

Can you imagine what would happen if you died and your beneficiaries didn’t know where to find your will? Or your money? To make sure this doesn’t happen to your family, always have the following key documents safely stored together in a place where they can easily be found:

1. Your will: Outlines who gets what when you die. It also appoints guardians for your underage children. Without a will, your assets will be divided according to provincial law, not your own wishes. Worse, your children might end up not living with the guardian of your choice.
2. A living will: Spells out how you want to be treated if you are unable to make decisions about your own health (i.e., whether you want to receive life-sustaining treatments like respiration or resuscitation or whether you want organs donated).
3. A power of attorney: Gives someone the power to make financial decisions for you in the event you’re no longer able to do so. Without this document, the courts will have to appoint a guardian to look after your affairs, and that can take a lot of time – and money. NOTE: You should ensure that there is a second signature on all of your bank accounts as well.
4. Proof of ownership: Gather together all documents that show you own your house, land, vehicles, stocks and any other assets. Without these, your family might not know what you own or be able to prove it.
5. Three years of tax returns: Tax returns give your executor a sense of the assets and finances that are part of your estate.
6. A list of bank accounts and safety deposit boxes: According to the Bank of Canada, there are approximately 1.3 million unclaimed balances in Canada worth some $465 million. You want your family to be able to find your money – show them where it is by listing all your accounts.
7. Stock certificates and savings bonds: Hang onto your investment account statements and store them safely with your certificates (if you have any on paper), so your family can easily determine exactly what you own.
8. Pension, retirement and annuity documents: Help your family access any remaining retirement benefits they are eligible for through your retirement plan. If you’re getting money from an annuity, the contract will help your beneficiaries understand what they are entitled to and from which company.
9. Insurance policies: You bought insurance so your loved ones would be financially covered when you die, so be sure to keep copies of all insurance-related documents on hand so your family will know what policies you have.
10. A list of your debts and loans: A list like this will ensure your family won’t end up having any unwanted surprises down the road, such as debts they did not know about.
11. Marriage licence and/or divorce papers: Legal proof of marriage and divorce can make it easier for the executor of your estate and for your family.
12. Your user names and passwords: With social media and online accounts becoming increasingly important, you want to be sure your loved ones will be able to access your accounts.
13. Contact information: Do you have a lawyer, financial planner, or other professionals who assist you.

Make sure that their names and contact information are also listed.
Review your list once a year to ensure that it’s kept up to date.

Changes to "Guaranteed Income for Life" products

The Ever Changing World Of Investments


Since the guaranteed lifetime withdrawal benefit products (GLWB) first made its debut, investors have been gravitating towards this "Guaranteed Income for Life" product as an alternative solution for their retirement plans; especially in these troubling economic times, However, as the adage goes, "all good things must come to an end", and we are now starting to see life insurance companies, modify, recede, and now even exit this investment product.

Market conditions over the past four years have left everyone worrying and scratching their heads as to where to put their retirement savings. Even Bonds and GICs, the once stronghold of the fixed income market for the ultra conservative investors, can no longer provide the same level of income with the low interest environment. There is no wonder as to why we are seeing an increasingly amount of GLWB sales in 2012.

However, financial markets have not been as responsive to the recovering global economy as analysts had hoped for, and as a result of this, life insurance companies have now started to modify, recede, and even exit from this investment product.

The main reasoning comes from a continuing low interest rate environment, market volatility and slow recovery. Sustainability and capital reserves requirements set out by FSCO (or as Insurance companies like to call "RISK") cannot be met. I am convinced that there will be other closures in the near future.

If you are a Conservative Investor or a Risk Adverse Investor now is the time to investigate this product group. Where else can you get guarantees that your principle is protected and that you cannot outlive your money? This product is ideal for people who do not have a pension plan from work. Check it out before the guarantees are gone.

Give me a call or send me an email and I can discuss your specific situation with you.

Making a claim on your insurance

This summer I have assisted several clients making an insurance claim. Like everything else in life, they seem to come in batches. While none were happy to be making a claim, they were all pleased to receive the insurance proceeds.

Life insurance claims are straight forward – the insurance company needs a death certificate and a claim form. The money in most cases is paid out in less than a month from when you notify me. In both cases this summer (even with a mail strike), I managed to deliver the checks to the beneficiaries in about 2 weeks.

Disability claims require more time and more paperwork. The client I am working with is an employee at one of the groups I insure. I was called as soon as he was off work. The employer and employee have completed their paperwork; we’re just waiting for the doctor to submit theirs.

Do you have long term disability coverage? If you’re an employee – look at your pay stub. If you show an amount deducted beside LTD – you have Long Term Disability coverage that probably starts if you’re off work for 17 weeks. If you have an amount listed besides WI (weekly Indemnity) or STD (Short Term Disability), then you have Short Term Disability as well. As opposed to health and dental benefits, disability only protects your income and not that of your spouse.

You should review your coverage whenever there’s a change in your life. Whether you require Life Insurance to protect your family, Critical Illness Insurance to receive a lump sum payment should you get a life threatening or life altering disease or Disability Insurance to pay you monthly while you are unable to work or a combination depends on your specific situation.

Give me a call. I’d be pleased to walk you through the calculations to determine how much insurance you need and what type meets your specific need.

The more things change, the more they stay the same

We've all heard this proverb and have all probably used it, but what does it mean in your everyday life?

This week, I went on line and bought tickets, posted pictures and checked bus schedules - all activities that a few years ago would have required phone calls and / or a trip out of my office to accomplish. I spoke to a friend half way around the world on Skype for nothing (versus the expensive long distance phone call of 15 years ago). I could go on - we all have examples from our day to day lives.

The fundamentals of financial and estate planning have not changed. We are all concerned that we might outlive our money or whether we can maintain our standard of living for ourselves and our families - no matter what happens. What have you done about this? Many people bury their head in the sand and hope that nothing serious happens. Some people have reviewed their plans with a professional and know what would happen if - and many of these people are pleased to learn that they are in a much better position than they thought they were in.

Would you like to be one of the people who knows for sure? I am offering a confidential, complementary review of your current situation along with suggestions on how to ensure that you can maintain your lifestyle - to my clients and readers of this newsletter

Estate Planning 101

If you’re like most people, getting your personal financial plan started can be a challenge. And what about planning your estate? Well, that subject might really make you shudder. But why? Too dreary? Too complicated? Too intimidating? Or simply not on your list of priorities?

Estate planning should be a financial priority at almost any stage of life. In fact, an estate plan can be essential for organizing your financial affairs and providing for the well being of your family members.

Simply put, an estate plan is a road map for planning your estate and should be updated on an ongoing basis - particularly as your circumstances change throughout your life. Why is it important to have a plan? To ensure a simple, tax-efficient and organized transfer of your assets to loved ones.

When you start your plan, there's a lot to think about. You want to live your life to the fullest, and ensure that your heirs will get the most out of the assets you're setting aside for them. Here are a few of the things you'll need to know:

Your Will
The will is a legally enforceable declaration of how a person wishes his/her property to be distributed after death. A will can be quick and easy to produce and will generally cover the following:
• Naming the executor — the individual(s) or organization chosen to administer the estate. If you should die without a will (referred to as dying intestate), the province you reside in will step in to administer your estate. In this case, you've essentially forfeited your say on how things are divided and who will be in charge of the process.
• Naming beneficiaries of the estate (e.g. immediate or extended family, institutions, etc.)
• The distribution of assets within the estate (e.g. investments, real estate, possessions)

What is probate?
Probate is the process by which a provincial court confirms the validity of your will. Potentially, it can be quite time consuming, tying up your assets for months or longer.

Probate fees are essentially the taxes that must be paid to the provincial government before your executor can begin to administer your will. The fees vary from province to province and are based on the value of the assets in your estate. In most provinces, the fee structure is tiered.

In addition to probate fees, there are fees payable to the executor for administration services and fees payable for legal and accounting services. In the end, the cost of probate can be significant.

Reducing Taxes
We all know the old cliche that the only two certainties in life are death and taxes, but how much do we really know about taxes after death?

If you have a will, upon your death it is your executor's responsibility to file a tax return for you. The government will consider you to have sold all your assets immediately before your death and any capital gains/losses will be crystallized. That may lead to a big tax bill.

Depending on your individual needs, there are strategies you can employ within your estate plan to minimize the amount of taxes you have to pay and to avoid probate. Below are a few key examples:
• Maximize asset "roll-overs" - transfers to your spouse that defer capital gains
• Get advice on setting up a trust to ensure your beneficiaries are well looked after
• Give gifts of cash or possessions while you are still alive
• Consider charitable donations to create valuable tax benefits
• Buy life insurance that is paid out to a named beneficiary on a tax-free basis
• Restructure investments with insurance companies to avoid probate on death

The reassurance of having a strategy in place to preserve the value of your estate for loved ones is something to value. After all, why pay if you don't have to? Work with your financial advisor to determine what exactly is in your estate, and then devise your plan.

Employment Insurance for Self Employed

Are you self employed? Do you know some one who is self employed?

Beginning in January 2011, self-employed Canadians will be able to access Employment Insurance (EI) special benefits.

There are four types of EI special benefits:
maternity benefits;
parental benefits;
sickness benefits; and
compassionate care benefits.

If you enter into an agreement between January 31, 2010 and April 1, 2010, you will be able to make a claim for EI special benefits as early as January 2011. However, if you enter into an agreement with the Canada Employment Insurance Commission after April 1, 2010, you will have to wait 12 months before you will be able to make a claim for EI special benefits.

To determine if you should consider enrolling into this program, speak to your accountant.

If you would like to book an appointment to discuss these or other strategies, please don't hesitate to contact me directly.

For more information on this program, check out the Government of Canada web site.

Life Insurance to Ease your Taxes

They get a bum rap, but life policies can ease tax bite

Of all the financial products available to help Canadians protect their life's assets, perhaps the most overlooked is life insurance. Blame it on its natural association with death, the necessity of monthly premiums or even the memory of aggressive direct marketers.

Whatever the reason, life insurance has received a bum rap, experts say.

When built into a larger financial strategy, life insurance can reduce taxes and enhance wealth. You still can't beat death, but you may be able to beat the taxman with life insurance payouts.

The primary role of life insurance is to cover known liabilities, says George Denier, a Toronto-based retired partner at KPMG working on contract with the firm's high-net-wealth services unit.

Life insurance policies can be used to cover capital-gains taxes on real estate, RRSPs or the value of a business in the event of the owner's death, so that heirs need not sell assets to pay taxes. The advantage of using a whole life or term life policy to cover these costs is that the policy is paid out almost immediately and is tax free.

A life insurance policy can also serve as a tax-free source of retirement income, Mr. Denier notes. He gives the example of an individual with a policy that over the years has built up $500,000 worth of cash surrender value and/or a $1.5-million mortality benefit.

"I go to a financial institution and say, 'What will you lend me against this?' and I pledge the proceeds of that policy to them as security for a loan. What I have done is accessed money to fund retirement without incurring any taxation."

The sudden need to come up with a pile of cash to pay off accumulated - but not necessarily unexpected - liabilities upon the death of a private business owner is a big reason only 10 per cent of family businesses in Canada make it past the second generation, said Hugh MacDonald, president of Canadian Succession Protection Co., a firm that specializes in using life insurance in succession planning. A corporate-owned policy will provide a spouse with tax-free cash when the business is weakest, after the death of an owner.

Life insurance can also provide an effective way to avoid probate fees and other entanglements that can come with the windup of an estate, adds Mr. MacDonald. "If you name your wife, kids or grandchildren as a beneficiary of a life insurance policy, it is outside your will, and you save probate," he says. "It is one of the few vehicles other than a trust which has creditor protection."

Insurance policies can also be used to cover the value of RRSPs, income property or vacation property. Mr. MacDonald gives the example of a cottage originally bought for $100,000. Now it's worth $400,000, and a widow wants her children to inherit it. "That $300,000 [difference] is a capital gain triggered on death, almost half of which is taxable in Ontario, triggering a $70,000 liquidity problem for the children. You can buy a permanent policy [on the mother] to cover that liability."

Taking out a policy on mom to pay for a middle-aged couple's retirement may sound ghoulish, but it is proving to be increasingly popular, said Frank Wiginton, a Toronto-based certified financial planner with TriDelta Financial Partners. The "mom as retirement vehicle" scheme does not work in all cases, he noted: The parent must be in good enough health to be insurable and not too young, he said.

In an ideal scenario, a mother is in her late 60s or early 70s while the son, the policy holder, is in his 40s. The yearly premium is $16,500, or $247,500 over 15 years.

"About the time you are likely to go into retirement, that is when mom is likely to die," he said. In a case where the mother lives 20 more years, the result is a tax-free payout of $500,000, which Mr. Wiginton says results in an annual after-tax return in excess of 5 per cent. "It is a very attractive strategy," he says.

From the globeandmail.com - Friday, November 6, 2009

Article by Paul Brent

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.

Health and Dental Options for Self Employed

The recent outbreak of H1N1 (Swine Flu) has received a lot of news coverage, and many of us have decided to take precautions to remain in good health.

In times like these, self-employed people may be especially concerned. Without the sort of comprehensive health and dental coverage that many employees receive from their employers, small business owners are right to worry about what would happen should they, or their families, ever require expensive medication or treatment that isn't covered by their provincial plans.

Private health insurance isn't nearly as expensive as you might imagine. Depending on your age, health, the level of coverage and the insurance company, you may be able to obtain both drug and dental insurance for yourself, your spouse, as well as a child, for as little $165 a month (based on two non-smoking 40-year-old adults, with a 15-year-old child).

The best part is that you may be able to write off the entire amount as a business expense. In 1998, the federal government made these premiums tax deductible for self-employed individuals!

If you'd like to discuss the various health and dental plans available in the Canadian marketplace, I hope you won't hesitate to contact me at the number above. I'd be happy to shop around and find a plan that's right for you.

Out of RRSP contribution room?

The Registered Retirement Savings Plan (RRSP) is probably the single best tax shelter available to Canadians. You can deduct your contributions from your income, and you are able to shelter your earnings from taxation for as long as they remain inside the plan.

But what do you do if you've filled it up and have no more contribution room? It's a problem. But what a nice problem to have!

While it's difficult to think of another savings vehicle quite as attractive as the RRSP, the good news is that there are other tax-advantaged savings options available to those who have already maxed-out.

Universal Life Insurance
Universal life insurance is perhaps best described as a life insurance plan built around a tax-sheltered, savings account. Every month, the base insurance premium is "billed" to this savings account. Any amount that remains in the account after this minimum charge has been paid can be invested however you choose, and the earnings accumulate tax-free for as long as they remain inside the policy.


Mortgage Debt
Now that your RRSPs have been topped up, consider the benefits of making an additional mortgage payment. Most lenders will allow you to make prepayments to a maximum of 20% or 25% of the original loan, and the savings can be significant. For example, a $10,000 prepayment on a $150,000 mortgage at 5% with 20 years remaining would save you $15,399 in interest. There aren't many other investments that can generate an immediate 150% after-tax return!

If you'd like to discuss these or any other tax shelter opportunities in greater detail, please do not hesitate to contact me at 416-806-5478 or by email at heather@freed.ca