FAQ

Critical Illness Insurance provides a large sum of money in the case of an expected or unexpected illness to an insured individual, and this money is tax-free. Due to the high costs of medical treatment needed for severe illnesses, traditional health plans may not be enough to cover the increased expenses. Critical Illness Insurance allows for the opportunity, through additional cash, to cover the high expenses of treatment for terminal illnesses.

Similar to RRSPs, any investments made into an RESP grow tax sheltered. These investments include Stocks, Bonds, GICs, Mutual Funds and Segregated funds. In addition, through the federal government's CESG (Canada Education Savings Grant), you have the opportunity to receive 40% on every dollar for the first $500 you invest into your children’s RESP annually.

Applying for Mortgage Insurance from an insurance company (As opposed to a bank) allows for you to choose your own product, premium beneficiaries. Furthermore, your premium on the insurance is fixed, with the option of being able to convert it to Life Insurance if you so desire, without being affected by any health changes, which would otherwise make you uninsurable. When purchasing from a bank, not only it is much expensive the bank becomes the owner and beneficiary of your policy. If anything was to happen to you to bank will collect the full death benefit and simply issue the pay off letter without giving a dime to the family.

Properly constructed Business Succession Plans allow for your business to live on after you are no longer able to commit to work. These plans put in place contingencies to be put in place to prepare for the unexpected, in case you or any key member are suddenly unable to work. In addition, employees of your company are better motivated to know that there is a greater possibility for them to be promoted to a higher position.

Using the funds withdrawn from your RRSP to pay off a mortgage would or would not be the most financially beneficial idea, depending on your overall income status in that year, where the funds are coming from i.e. your RRSP or Spousal RRSP. As you are taxed on the money you withdraw from your RRSP. You may end up paying higher rates on your RRSP than on your mortgage as a result.