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Author Archives: Terry Zavitz

When Life Insurance is More than JUST Life Insurance

Terry Zavitz

Terry Zavitz

 

Most of us know that life insurance pays a lump sum upon your death.  Some policies are temporary and bought in case you die unexpectedly (think mortgage protection, young kids, etc), while others are permanent and bought to assist with estate plans, liquidity, funerals, legacy and so on…because we all know we’re going to die one day, right?

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The Enhanced CPP and What It Means To You

 

Terry Zavitz

Terry Zavitz

January 1, 2019 marks the beginning of increased contributions to the CPP by employees and employers alike. This increase has been implemented with the goal of ensuring that Canadians are better prepared for retirement by ultimately receiving higher CPP payments. Currently, working Canadians and employers make CPP contributions of 4.95% on earned income between $3500 and $55,900.

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Critical Illness Insurance – Who Needs It

Terry Zavitz

Terry Zavitz

More and more Canadians who are concerned about the financial costs of major disease are turning to Critical Illness Insurance (CII) to gain peace-of-mind and protect their savings. CII pays a tax-free, lump-sum benefit, for a coverable illness/accident defined in the policy contract, typically 30 days after diagnosis, as long as the insured is alive. The most common illnesses insured include cancer, stroke, heart attack, and multiple sclerosis (MS), with most contracts covering over 20 ailments. 

While Disability Insurance (DI) provides a monthly benefit to replace lost income due to a critical illness, CII helps to pay for the extra costs so often associated with being diagnosed with one. 

critical-illness-cancer-health-insurance

 

CII also helps to cover income lost during the waiting period,

a period of time in which no benefits are paid under a

DI plan, as well as top up the benefit since DI typically

covers only 85% of after tax income. 

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Maturity Options and Your RRSP

 

Terry Zavitz

Terry Zavitz

Is a RRIF or an annuity a better option?  As with most personal finance situations, it is unique to each individual.

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Life Insurance & Changing Tax Law – What is All the Noise About?

Terry Zavitz

Terry Zavitz

The 2016 proposed federal budget and introduction of changes relating to life policies issued January 1, 2017 and beyond are the focus of many articles, most of them hard to understand due to the technical jargon needed to explain these changes. The result has been a preponderance of rumors. What is all the noise about and what changes should you care about?

The proposed 2016 federal budget contains 3 provisions that affect the taxation of death benefits of existing and new life policies that are corporately owned, whether the corporation is an investment, professional or active business. They are complicated, but in reality, affect very few of these policies. The changes represent a desire by the federal government to clean up sections of the Income Tax Act (ITA) that resulted in preferred taxation i.e. they closed some loopholes. Unless your corporation owns a life policy that was previously transferred into the corporation at its fair market value (FMV) or the beneficiary of the policy is a different corporation, there is likely no change that you need to be concerned about, or better still, try to understand. If any of the two scenarios apply to you, call your insurance advisor to discuss.

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