Family Planning Guide

LIFE INSURANCE

In order to determine the right amount of life Insurance, you may want to consider to following guidelines:

Liabilities – Mortgage, Loans, Credit Cards
Income – 8 to 10 Times your salary depending on the age of your children
Funeral Expenses - $25,000 for funeral and legal expenses
Education Savings - $40,000 per young child set aside for education

Term 10 is the most economical method of protecting your family however if you are healthy, a non-smoker and have young children, you may want to consider the longer term benefits of a Term 20 policy.

DISABILITY PROTECTION

If you do not have income loss protection from your employer or are self-employed, you can protect up to 75% of your income.  Your options are:

·        0 to 120 day waiting period
·        Benefit for 2 years, 5 years, or until age 65
·        24 hour accident and sickness benefit
·        Own occupation extension from 2 to 5 years for trades/professionals

 The risk of a 35 year old experiencing a 3 month disability or longer before the age of 65 is 33% with an average length of 2.9 years.  1 in 8 or people become disabled every year.  The potential loss of income for an individual who makes $50,000 age 35 is $1,125,000.

CRITICAL ILLNESS

This is a lump sum benefit to help you protect your savings in the case of a life threatening illness.   With the current survival rate at 78%, additional expenses and lost income may severely hinder your recovery and alter your retirement/life plans.   

·        $25,000 to $250,000 lump sum benefit (2 years o expenses is a good starting point)
·        25 covered illnesses including cancer, heart attack and stroke
·        Full return of premium option for permanent policies (tax free)

 Similar to Life Insurance, Term 10 Critical Illness is the most economical especially if you are considered a smoker.For young families, term 10 or 20 is the most economical option. A more permanent option is Term to 75 with Return of premium option.You may want to invest as much premium into surviving as you do in your life insurance policy.

CHILD PROTECTION

Similar to adult critical illness, this benefit is specifically designed for children’s illnesses and provides a lump sum of money to help overcome an illness and pay for alternative medical treatment, parental time away from work and family vacations. 

·        $25,000 to $250,000 lump sum
·        28 to 32 Illnesses with Life Insurance built in
·        Full return of premium (savings component) if policy is surrendered.

Premiums start at $20/month and is fully paid and converted to an adult policy after 20 years.  Cash value if surrendered is 100% of all premiums paid into the policy.

SAVINGS AND RETIREMENT PLANS

Segregated Funds are strategically managed similar to Mutual Funds according to your investment risk profile and have added protection.

·        75% Capital/Maturity guarantee and 100% death benefit guarantee
·        Income for Life options throughout retirement
·        Creditor protection and bypass probate (reduces estate cost and increase privacy)

 As you approach retirement, Segregated Funds can offer minimum annual guarantees (currently at 5% annually) for as many years as you do not make any withdrawals and provide a guaranteed income for life.   

You may want to consider a fixed monthly contribution as a good strategy to balance market fluctuations and create a forced savings plan towards retirement.


EDUCATION SAVINGS PLAN

Committing to your child’s education comes with 20% incentive from the Government.  If you lock into an RESP contract, you can increase your child’s investment with another 15% bonus, assuming you child attends a qualified learning institution

·        20% Government Savings Grant  on the first $2500 annual deposit
·        15% Investment Bonus for locked in plans
·        No Minimum and up to $50,000 Maximum
·        Minimum of $25/month contribution

 Segregated funds ensure that your principal is guaranteed.  Investment risk is managed to coincide with the age of the child throughout the life of the investment. 

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