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Author Archives: Justine Zavitz

Association Plans – If You Can’t Stand the Heat, Get Out of the Kitchen





Some of you may remember our past blog called Should I Buy Life Insurance from a Big Box Store? where we outlined the importance of doing your research before assuming associations have the best products and prices on the market. It’s true, a lot of the time an association’s membership includes various discounts on a multitude of products and services…but not always. In that blog, we explored the offering of one store’s life insurance products and prices and compared it to what was available through the open market.  It was clear that their pricing was not competitive in both the short and long run. 

So why are we revisiting this topic of association plans? Well there’s more to the story than just pricing, and more products than just life insurance.  Disability insurance is something many people are attracted to through their associations because it can cost less in their younger years (although more when they’re older!).  What most people don’t know about association plans is that they are considered group insurance, which means you do not own or control the policy, and the contracts and pricing are not guaranteed.  A large professional association in Ontario recently underwent some major changes on their disability product impacting everyone who currently holds a policy with them.  Associations, for the most part, want to provide value to their members, not take it away.  So why would the association ever do this?

Group plans involve a company/association/member group asking an insurance company to provide a product specifically for their members.  The insurance company agrees to do this with the understanding that the pricing assumptions they use will relate to this specific group rather than society as a whole.  Every year, they will measure if their pricing matched the actual claims experience of the plan.  If it was better than they assumed, some plans will provide a small refund.  If claims were higher, the insurance company will require a change in contractual language and/or an increase to the price.  The association is simply the messenger of this outcome.

Our medical advances and societal awareness has expanded more than we could have imagined 20 years ago. Mental illness, cancers, autoimmune diseases…these are all much more prevalent in all ages and cause significant, long term, disability claims.  It’s not surprising that disability insurance providers are seeing dramatic increases in claims putting a lot of pressure on their products and pricing.  The big difference is some of these providers have contracts and prices that are fully guaranteed, whereas others have the right to make changes. One association has already had to make difficult adjustments…there will be more. 

When it comes to protecting something as important as your income, financial stability, family, long term goals, businesses…and on and on…sometimes it’s worth an extra couple of bucks up front to make sure the product you secure now, is the product you have when you need it.

Are All Investment Options the Same?

Fees vs performance? Investment advisor or no advisor? Active or passive?…these are common considerations amongst today’s investors who have more choice than ever. What are these options and how do you decide what’s best for you?  Here is some food for thought…

Active Investing

With active investing, a portfolio manager and their team will research various companies, sectors, geographies, etc. and build a tailored mix of stocks, bonds and other assets to create a portfolio for their clients. The thought process is to offer a portfolio that is heavily weighted in areas that are expected to outperform the market and less weighted in those that will underperform. The intended end result? A better return than the market itself or what’s known as the benchmark.

This all sounds great, but the resources used in active management aren’t free so the cost of these portfolios is among the highest. The biggest questions to ask are…can the portfolio manager time the market such that the portfolio will beat the benchmark?  And, will it beat the benchmark by a higher amount than the added cost?

Passive Investing

Passive investing is the opposite. Instead of making educated guesses on what will over or under perform the market, these portfolios are built in the exact weighting of a particular market itself.  These funds can be based on a major index like TSX, or can be a subsection of an index, sector or geography. 

Whereas an active portfolio has the possibility to provide higher returns than the benchmark (or greater losses), passive funds will provide the same returns as the benchmark of the market it is replicating. Since passive investments require less resources, their fees are much lower.  As such, even if the funds aren’t surpassing the benchmark, the net effect can sometimes be greater (or less negative in a down market) than active. 

DIY Investing

A trend that has gained popularity with the evolution of technology is Do-It-Yourself Investing – there are a lot of new platforms where you can try your hand at building your own portfolio, whether it’s made up of passive and/or active funds.

Overall, this is the least expensive form of investing. That being said, you need to know what you are doing and be diligent in reviewing your portfolio frequently and researching the various options available to you. There is nothing worse than going on vacation and coming home to see that your stocks tanked while you were on the beach!

Which Option is Best?

At the end of the day, the best option is the one that makes you most comfortable…but having a trusted advisor to help you manage the bigger picture will ensure all of the pieces of the wealth puzzle fit properly together. After all, wealth is made up of more than just investment returns and fees…it’s a long-term strategic plan involving investments, insurance, taxes, retirement and so on, all working in conjunction to support your vision of the future.

What Have We Learned From Morneau’s Proposed Corporate Tax Changes?

Justine Zavitz

Justine Zavitz

Depending on where you get your information from, I am considered a Millennial or a Xennial. In my career, I have not experienced what I would consider to be extreme changes to the way various income is taxed. Sure, there have been increases in personal tax rates, decreases in corporate rates, various tax credits being enhanced or taken away and so on… but nothing as jolting as the proposals on changes to the taxation of CCPCs that we saw in July, 2017. 

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Family, Charity, and the CRA…Which Two Would You Choose?

Justine Zavitz

Justine Zavitz

Most of us appreciate the role that taxes play in our lives and society, but as with any money we spend, we like to be cautious to make sure we’re not spending too much. For anyone who has sat down in a meeting with me, you know how excited I get about the amazing advantages that come with permanent life insurance policies. They are financial vehicles that help with accumulating assets, preserving assets,and transferring assets in an extremely tax efficient manner. 

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Who Likes Reward Points…and Apple Watches?


Justine Zavitz

Justine Zavitz

As someone who frequently talks about life insurance, I always hear the phrase ” I won’t be the one benefitting from this, my kids (or husband/wife) will.” But Manulife is changing that; they have now created a product that rewards you…while you’re still alive! 

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