Term Insurance Vs. Permanent Insurance

You have probably heard that you should buy Term Insurance because it is cheaper than Permanent Insurance.

Term Insurance, as the name implies, is for a specific period (i.e. 10, 20 years), or up to a certain age. At the end of that period the policy terminates, or you may be given the option to renew it for a further period, or to convert it to a permanent policy. It is important to note that many Term policies cannot be renewed after a certain age, and that every time a policy is renewed the premium increases, based on current age. So, how much are you really saving by choosing Term over Permanent?

Term insurance is ideal to cover mortgages or credit card balances, but if you want insurance coverage for lifetime permanent insurance should be considered.

Permanent insurance products include Universal and Whole life policies. The premiums start out higher than Term policies, but remain the same throughout the contract.

Whole life policies accumulate cash values, which can be used to
(a) purchase a paid-up policy if you become financially stressed
(b) obtain a policy loan
(c) secure a loan, through a collateral assignment

With Universal Life policies there is flexibility where premiums are concerned. You can pay more than the minimum required and decide how you want the excess premium invested.

Remember, insurance is not a one-size-fits-all deal so, get the facts and choose the kind that best suits your needs.


Pauline Bourne, F.L.M.I.
Your Finance & Family Consultant,

Critical Illness Insurance

Most of the time we focus on what would happen to our family if we die. We seldom stop to think about what would happen if we are diagnosed with a critical illness, like cancer, heart attack or stroke.

Having a critical illness can be very traumatic. On top of that, the loss of income while recuperating, medication expenses and home help can be very costly.

To help cover those costs, some people are forced to take money from their RRSPs and other savings plans, resulting in less funds being available for retirement.

The answer to this problem is Critical Illness insurance. It provides you with a tax-free, lump sum payment 30 days after the diagnosis of a critical illness, and allows you to recover completely without financial worries.

So give your family some peace of mind by applying for your critical illness policy today. I look forward to hearing from you.


Pauline Bourne, F.L.M.I.
Your Finance & Family Consultant

Non-Medical Insurance

Do you know someone who was declined for insurance that requires medical tests, or simply doesn't want to be bothered going through medical testing?

Well, non-medical insurance is the answer.

Non-medical means that no blood tests, urine tests or medical exams are performed; however, you will be required to answer a few health-related questions to qualify.

With this type of insurance, if death occurs within the first two years your beneficiary will receive a refund of the premiums paid, plus interest. After two years the full face amount is paid out.

If you, or someone you know, have health concerns and require insurance coverage, please contact me to get the best rates possible.


Pauline Bourne, F.L.M.I.
Your Finance & Family Consultant

RRSP Savings

It's that time of year again, RRSP season is here.
March 1st is just around the corner, so top up your RRSP as soon as possible.
Don't have an RRSP yet? Consider starting one soon, as contributions
are tax-deductible and could result in a tax refund.


Pauline Bourne, F.L.M.I.
Your Finance & Family Consultant

Registered Education Savings Plan

The cost of a post-secondary education is increasing year-by-year. Will your child or grand-child be able to afford to go to College or University? With your help they can. The solution to this problem is a Registered Education Savings Plan (RESP). For as little as $25 per month you can get started. The child you sponsor must be a Canadian resident under 15 years old, and have a Social Insurance Number.

There are two government grants available as well.
The Canada Education Savings Grant (CESG) pays an amount that is equal to 20% of the annual contibution you make, to a maximum of $7,200 per child.
The Canada Learning Bond is also available to low income families for children born after December 31, 2003. The amount paid in the first year is $500 and $100 per year thereafter, to a maximum of $2,000 per child.

Consequently, your contributions along with the grants and the interest earned on those funds, will guarantee that your loved one will be able to pursue a post-secondary education. So start early and invest as much as you can, that's the key!


Pauline Bourne, F.L.M.I.
Your Finance and Family Consultant

Back To School Shopping

While I was walking through the mall last weekend I noticed that some stores were advertising Back To School sales. Considering the current economic state of affairs we should all be focusing on needs rather than wants. Before you head off to the mall with your kids you should,

Go through their closets to see what they have outgrown.
All clothing that is still in good condition can be donated to charitable organizations to help others. Some organizations will pick up these items.

Make a list of items your kids will need for the upcoming semester or school year
A list will help you stay on budget and avoid overspending

Determine how much you are willing to spend on each item and let your kids know.
I found this helpful when my kids were going to school. I told them the maximum I would pay for jeans etc., so when we got to the store their task was to find items in my price range.

Go shopping after breakfast or lunch, while their stomachs are still full.
That way you don't have to stop to buy food.

Use cash as much as possible instead of credit cards
If you're going to use a credit card limit yourself to an amount you can pay off when the bill comes. Interest payments on unpaid balances can nullify any gains you make by buying items on sale.

Your children will ask for everything their friends have, but if you can't afford to give them what they want tell them so. They will be disappointed but should be taught that they can't get everything they ask for.

Pauline Bourne, F.L.M.I.
Your Finance & Family Consultant

financeandfamily.blogspot.com

RRSP Withdrawals and Taxes

Are you withdrawing funds from your RRSP in order to make ends meet? Read on.

In these tough economic times many companies are going bankrupt and the unemployed workers are having difficulty finding other jobs. As a result, after their Employment Insurance (EI) payments stop, some people are taking funds from their RRSP to cover day-to-day expenses.

This is a reminder that all funds withdrawn from your RRSP are subject to withholding taxes. The rates for all provinces, except Quebec, are as follows:-

10% up to $5,000
20% from $5,001 to $15,000
30% on amounts over $15,000

Subsequently, you will receive a T4RSP for the amount withdrawn and will have to report it as income on line 129 of your income tax return. It also means that you'll have less funds available for retirement, the time when you need it most.

Therefore, dipping into your RRSP should be done as a last resort because of the tax implications and the impact it can have on your financial future.

Pauline Bourne, F.L.M.I.
Your Finance & Family Consultant

financeandfamily.blogspot.com