Mortgage default insurance is required when you purchase a property with less than 20% down payment. This insurance is required by the Government of Canada. It allows you to pay off your mortgage, in whole or in part, in the event that you become unable to pay. It also protects your financial institution if you are unable to make your mortgage payments. Take the time to fully understand this product, which can be an interesting solution for home ownership. This product should not be confused with mortgage life insurance.
Term / permanent life insurance
You can purchase term or permanent life insurance, depending on your needs, situation or budget. Term insurance will protect you for a limited time. The policy can last for 10, 20 or 30 years, and is usually renewable. This can be a great opportunity to get your first life insurance policy on a limited budget. Permanent life insurance covers you for life. It never expires and presents some interesting benefits. In the event of your death, your beneficiaries receive what is known as a “death benefit settlement”, which is tax-free.
There are some things you wish you never have to experience. The death of a child tops this list. But in the event of such a tragedy, insurance for children can be beneficial. It will mainly serve to compensate for the loss of income that would accompany this ordeal. It goes without saying that you will need time to grieve through this period. This insurance allows you to cover funeral expenses and to take time off work without worrying about your income. Find out more about this product that could make all the difference when tragedy strikes.
Salary and disability insurance
If an accident or illness prevents you from working, salary and disability insurance could make a big difference. This coverage provides you with a regular monthly payment should you find yourself unable to work. This is a welcome change when you need time to recover without incurring debt. Is this amount taxable or not? What is the difference between short- and long-term coverage? What constitutes a “disability”? These are questions you need to ask yourself prior to choosing insurance.
Critical illness insurance
This insurance will provide you with predetermined financial protection in the event of a critical illness. This could be a heart attack, stroke, cancer, etc. This allows the insured person to focus on their health rather than worrying about their financial situation. This insurance can also allow you to stay at your child’s side if he or she becomes ill or needs surgery. This type of product is designed for self-employed workers, but also for anyone who wants to enhance their group insurance. Costs vary according to your needs and your situation, so be sure to ask all the relevant questions.
Insurance without medical examination
This type of insurance is obtained without having to provide medical information. It is designed for people who have difficulty obtaining a life insurance policy, often for medical reasons. No questions are asked about your health, and no medical exam is required: approval is guaranteed, regardless of your physical condition. Monthly payments depend on several factors, including your age and whether you smoke. Is this the product for you? As with any insurance, the better you are informed, the more peace of mind you will have later on. And you'll avoid many unpleasant surprises.
Savings and investments
Saving and investing are two different and complementary concepts. Saving involves discipline and building up savings, but to make them grow, you may want to consider investing. How do you figure this out and what are the right decisions? There are many options, depending on the type of investment you want to make, and the amount of time you want to spend on it. Do you want to track your investments on a daily basis? Or would you prefer to get on with your life and leave your portfolio in the hands of a specialist? These initial questions, far from being trivial, will have an impact on your investment decisions.
TFSA / RRSP / RESP / UNREGISTERED / LIRA
There are many different savings plans around, and each has its own particularities. Depending on your age, your family situation, your aspirations and your means, you will find a product that meets your needs while also aligning with your investor profile! Ask around: some plans offer very interesting tax benefits. What are the differences and particularities? Are there any pitfalls to avoid? Can these investments evolve as your personal reality changes over the years? In any case, take the time to understand the subtleties to make an informed decision.
Segregated Investment Funds
This type of investment is similar to a mutual fund, but includes a death benefit, which is an important distinction. This make sit both an investment solution and an insurance product. While guarantees are available, this type of investment entails a certain level of risk, so it is important to be aware of your tolerance to risk. Note that these funds are developed and managed by experienced fund managers who know the market inside out. Your advisor will be happy to provide you with more information.
Transfer of pension funds
Let’s say you are leaving a job where you had a pension fund. Maybe you are nearing the end of your career, maybe not. You can leave the fund with your former employer in which case you will receive payments, depending on your type of plan. You can also transfer the amount into your new employer's pension plan, or you can transfer the money to a locked-in retirement account (LIRA) or a locked-in RRSP. Either way, you won't be able to access these funds until you retire. Which scenario is best for you? Consult your financial security advisor to make an informed decision.
A financial strategy is developed based on your current situation and your ability to save or invest. It is a set of processes that will allow you to reach a financial objective, in the short or long term. The first step is to clearly set your goals and know your risk tolerance. Then, determine whether you want to plan for the short, medium, or long term. The objective is to ensure your future or to achieve financial balance. It may be wise to surround yourself with experts when it comes to planning your financial future.
What is the difference between mortgage default insurance and mortgage life insurance?
Mortgage life insurance protects a homeowner's family. It kicks in if you are unable to pay your mortgage due to death, illness or disability. Mortgage life insurance ensures that all or part of the mortgage can be paid off in the event of such a situation. This could allow your family to keep the home. Mortgage default insurance protects the financial institution if you are unable to make your payments. It is mandatory if you buy a home with less than 20% down payment. This is called a high-ratio mortgage. Nowadays, many people today are in this situation in order to be able to afford home ownership.
Should I choose an RRSP or a TFSA?
The main difference between a TFSA (Tax-Free Savings Account) and an RRSP (Registered Retirement Savings Plan) is the tax implications. The RRSP comes with a tax deduction when you contribute, but you pay taxes when you withdraw your funds. The TFSA does not allow a deduction when you contribute, but you pay no taxes when you withdraw your funds. When choosing between an RRSP and a TFSA, it’s important to compare what you currently pay in taxes with what you’re likely to pay in retirement. It's also important to have an idea of the type of retirement you're planning. In short, both products have their own advantages, but it’s important to know what you want.
What type of investor am I?
There are different investor profiles: conservative, balanced and dynamic. You can determine your profile according to your objectives, your investment horizon, and your risk tolerance. It's important to know yourself well when it comes to investing. Beyond simple profits, your quality of life also rests on peace of mind, a sense of security and balance. And you'll be able to make more informed decisions when the time comes to invest. The Autorité des marchés financiers provides a questionnaire to help you discover your investor profile.