Expect the Unexpected…

Expect the Unexpected…

If I told you to do what you love and love what you do and spend 99.9% of your time doing so you would understand that statement as it applies to your life. Some would call it the simple life. But I recommend that you commit 0.1% of your time to plan for the unexpected, especially as you move towards some big milestones like marriage, home ownership and kids. That is when term life insurance, a type of policy that covers you for a specific length of time, can really make sense.

Don’t hesitate to call or email us for your best options when thinking about your family’s financial security.

Henley Financial & Wealth Manangement  

 

Newlyweds with debt

You are marring the person of your dreams the person that you want to share your future with. But does your future include a term life insurance policy. Here is one reason why you might want to consider buying it now:

Debt.

Insurance is designed to protect you from unknown at death. Many young people start their marriages with a significant amount of debt. It could be a disastrous if only one spouse remained to cover the payments. Say you want to cover $100,000 in debt. You can get a term life insurance policy to cover it for pennies on dollar a year, which is most likely less than you spend on coffee for the year.

Another scenario where term life insurance makes sense is when there is a big disparity in income. Insuring the difference means that if the higher income person dies, the lower income person can support their current cost of living while they rebuild his or her life.

For a newly wed couple Life insurance is something you should have. Hopefully you never need to use the benefit. You can feel good knowing that if something catastrophic was to happen your spouse is covered.

Buying your first home together

There’s “married” living the dream travelling doing what you want when you want, with no obligations. And then there’s “married with a mortgage,more debt and kids.” It’s an exciting step, a new home a place you call your own. But it also presents new risk. If one of you were to die, how would the surviving spouse manage the mortgage payments? This is when and why you buy a mortgage insurance at the bank (or they tell you that you have to purchase insurance through them). The better option is to buy a term life policy from your advisor or an insurance company, for a few reasons.

First, Term life is less expensive than mortgage insurance. Second, The payout on death benefit with term life doesn’t change, but on mortgage insurance it declines as you pay down the principal. Third, Mortgage life insurance has no flexibility meaning there is a face value policy limit and it isn’t transferable, so the policy will be cancelled if you move or become terminally ill before your mortgage is renewed.

Getting married and starting a family

There are a few things you are going to need if you’re expecting a baby. A completed baby room with the right crib, dresser, and a car seat plus all the other must haves. Oh yes you will have all the latest things needed to insure that your child is well looked after. I know this might sound morbid but at the same time you’re anticipating a new life beginning, and this is important. If you die, you want to make sure that your dependents are covered. Term life is a good short-term solution for a new family. The question is, how much do you need? The payout should cover your mortgage and replace a loss of income. How much you will need depends on the conversation you and your financial advisor have when you discuss this section of your family’s financial security.

 

Who Should You Vote For? Be informed so you can vote on October 19th!

Who Should You Vote For? Be informed so you can vote on October 19th!

So while I was looking for answers on who I should vote for… I came across this article that breaks down the promises:

Campaign promises that affect your personal finances

Where the parties stand on taxes, student debt, pensions & more

by MoneySense staff
October 13th, 2015
We’re in the final week of the federal election campaign and all three major political party leaders have finally unveiled their full campaign platforms. Here’s an overview of what NDP leader Tom Mulcair, Liberal leader Justin Trudeau and Conservative leader Stephen Harper have promised as it relates to your personal finances.

Taxes
NDP: Cancel income splitting for families with kids under the age of 18 but keep it for seniors; eliminate the CEO stock option loophole that allows wealthy CEOs to avoid taxes on 50% of income received from cashing in company stock (with proceeds invested into eliminating child poverty); increase investment in the Working Income Tax Benefit (WITB) by 15% to further support working Canadians who live below the poverty line; introduce income averaging for artists.

Liberals: Cut the middle income tax bracket from 22% to 20.5% for Canadians earning between $44,700 and $89,401 a year, amounting to savings of $670 a year (or $1,340 for a two-income household); create a new tax bracket of 33% for those earning $200,000 a year or more; reduce Employment Insurance (EI) premiums to $1.65 per $100; have the Canada Revenue Agency (CRA) contact people who have tax benefits but aren’t collecting them; cancel income splitting for families but keep it for seniors.

Conservatives: Introduce a “tax lock” plan to prohibit federal income tax and sales tax hikes along with increases to payroll taxes such as EI premiums for the next four years; cut EI premiums in 2017 from $1.88 to $1.49 per $100; phase in a new $2,000 Single Seniors Tax Credit, providing tax relief of up to $300 a year for seniors with pensions starting in January 2017; increase the Child Care Expense Deduction by $1,000 for children under age 7 to $8,000, to $5,000 for kids ages 7 to 16 and to $11,000 for children with disabilities.

Student Debt
NDP: Phase out interest on all federal student loans over the next seven years, saving students up to $4,000 in interest costs and boost funding for the Canada Student Grants program for low- and middle-income students and/or students with dependents by $250 million over four years.

Liberals: Increase the maximum Canada Student Grant to $3,000 per year for full-time students and to $1,800 per year for part-time students; increase the income thresholds for Canada Student Grant eligibility, giving more students access to the program; cancel existing textbook tax credits; eliminate the need for graduates to repay their student loans until they are earning at least $25,000 per year; invest $50 million in additional annual support to the Post-Secondary Student Support Program for Indigenous students attending post-secondary school.

Conservatives: Eliminate the income threshold used to assess the Canada Student Loans Program, so that students who work and earn money while studying won’t be denied access to the program for that reason; reduce the expected parental contribution amount to increase loan accessibility to approximately 92,000 students across Canada; expand the number of low- and middle-income students who are eligible for the Canada Student Grant program by making these grants applicable to short-term, vocational programs; increase the maximum annual grant for low- and middle-income families from $3,500 to $4,000.

Homeownership
NDP: Introduce a green home energy program to help retrofit at least 50,000 homes and apartment buildings making them more efficient and lowering energy bills; create 365,000 affordable housing units across Canada; mandate the Canada Mortgage and Housing Corporation to provide grants and loans to construct at least 10,000 affordable and market rental units, with any revenues to be reinvested back into rental housing supports.

Liberals: Start a new, 10-year investment in social housing infrastructure, prioritizing affordable housing and seniors’ facilities (including building more units and refurbishing existing units); encourage the construction of new rental housing by removing all GST on new capital investments in affordable rental housing; loosening the existing qualification rules for the Home Buyers’ Plan to allow more Canadians affected by sudden and significant life changes to access their RRSP savings for a down payment; review escalating home prices in high-priced markets, including Toronto and Vancouver, and review all policy tools that could keep homeownership within reach for more Canadians.

Conservatives: Establish a new, permanent Home Renovation Tax Credit which will allow homeowners a tax credit on up to $5,000 per year on home renovations. Increase the first-time Home Buyers’ Plan from $25,000 to $35,000 per person with a goal of more than 700,000 new homeowners by 2020.

Child Care
NDP: Create 1 million new child care spaces over the next eight years and cap their cost at $15 per day; add five weeks of parental leave for the second parent, extending the program to include same-sex couples and adoptive parents; doubling parental leave time for parents of multiples; provide regular EI access to parents who find themselves out of work after taking parental leave.

Liberals: Create a flexible parental benefits plan allowing parents to receive benefits in smaller blocks of time—for example, once every two weeks rather than once per month—and make it possible for parents to take a longer leave—up to 18 months when combined with maternity benefits, although at a lower benefit level; scrap the Universal Child Care Benefit for the wealthiest families, and instead introduce the Canada Child Benefit that will give the majority of families up to $2,500 more, tax-free, every year (typically for a family of four).

Conservatives: Increase parental leave to 18 months, allowing parents to take up to six months of additional unpaid leave; allow self-employed parents to earn money without impacting EI payments; offer choice between full parental leave EI payments for 35 weeks, or extend those payments, at a lesser rate, for up to a maximum of 61 weeks; women receiving EI maternity benefits will also be able to earn employment income under the Working While on Claim pilot project (this is currently permitted for those receiving EI parental benefits).

Saving/Investing
NDP: Reduce the annual Tax-Free Savings Account (TFSA) contribution limit from $10,000 to $5,500.

Liberals: Cut the TFSA contribution limit from $10,000 to $5,500 annually.

Conservatives: Double the Canada Savings Education Grant (CESG) contribution from 10 to 20 cents for middle-income families and from 20 to 40 cents for low-income families on the first $500 put into Registered Education Savings Plans (RESPs) each year, amounting to as much as $2,200 more per child in additional grant money.

Retirement/Pensions
NDP: Convene a first ministers’ meeting within six months of taking office to come up with a plan and a timetable for expanding the Canada and Quebec Pension Plans; scrap the Conservatives’ plan to gradually hike the age of eligibility for Old Age Security (OAS) benefits to 67 from 65 over six years starting in 2023; boost funding for the Guaranteed Income Supplement (GIS) by $400 million, a move aimed at lifting 200,000 of Canada’s poorest seniors out of poverty.

Liberals: Restore the eligibility age for OAS and GIS back to 65; introduce a new seniors price index to ensure benefits keep up with rising living costs; introduce a 10% boost to the GIS for single, low-income seniors; leave pension income splitting for seniors intact.

Conservatives: Support a voluntary expansion of CPP retirement benefits funded by workers, not employers.

Consumer Protection
NDP: Update the Consumer Protection Act to cap ATM fees at a maximum of 50 cents per withdrawal; ensure all Canadians have reasonable access to a no-frills credit card with an interest rate no more than 5% over prime; eliminate “pay-to-pay” by banks in which financial institutions charge their customers a fee for making payments on their mortgages, credit cards, or other loans; take action against abusive payday lenders; lower the fees that workers in Canada are forced to pay when sending money to their families abroad; direct the CRTC to crack down on excessive mobile roaming charges; create a Gasoline Ombudsperson to investigate complaints about practices in the gasoline market.

Liberals: The party has not included any specific measures related to consumer protection in its election platform.

Conservatives: Continue push for greater choice and lower fees in the wireless sector; grant the federal Competition Commissioner the authority to investigate the Canada-U.S. “price gap” on consumer goods; banning “pay-to-pay” practices.

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