Review Archives - Quadrant

The facts of life (insurance)

One-third of Canadians don’t have life insurance. The main reason is that death is hard to talk about; so many people avoid it and thus don’t buy life insurance or adequately plan for what will happen when they’re gone. For instance, one myth is that an employer’s life insurance program is adequate. Generally, it’s a good start, but you may also need individual insurance not tied to an employer to fully cover all your sources of income such as commissions, bonuses and second jobs. About 80% of consumers overestimate the cost of life insurance. Premiums are based on age, overall health, whether you smoke, family history, etc. so depending on these factors it can be quite affordable. Canadians need to be aware that there are lots of options, which can help people plan for and help families through a devastating loss.

Key Takeaways:

The majority of Canadians don’t have life insurance because it is hard to talk about.
Life insurance is important for the primary wage earner, but also for a partner who doesn’t work because of all the household tasks that may need to be hired out.
Life insurance allows people to keep together what they’ve put together, which makes not having life insurance more expensive than any policy.

“Canadians believe that life insurance is important but they put off the buying decision and so it’s not usually top of people’s priorities. It should be.”

Three ways to leave a legacy through charitable giving

Philanthropy is spotlighted during ‘Leave a Legacy Month,’ in Canada. To that end, The Financial Post has a few useful suggestions to make giving a part of one’s financial routine. For the short term, cash is one way to make an impact. There are easy and efficient ways to do this regularly, for instance, by taking advantage of payroll deductions and automatic withdrawals, offered by employers and credit card services. If your goal is for longer-term estate planning after you’re gone, then you can create a personal foundation, with a mandate to disperse monies to various charities over a specified period of time. You can also bequeath assets, such as estate funds and tax shares to those organizations you wish to benefit. Donations also come with both federal and provincial tax credits. With the proper planning and professional advice, there are lots of opportunities to make a difference in our own way.

Key Takeaways:

There are many ways to make a meaningful gift to a cause close to our hearts, either in the near term or after we are gone to those organizations that matter to us.
With estate planning, one can bequeath specific amounts to go to charitable enterprises, or one can transfer stock shares.
A donor advised fund allows one to make what is tantamount to a foundation with a mandate to disperse specified fund amounts to various charities over a given period of time.

“Cash donations are the most common way to make an impact on the communities you care about and it has never been easier. Many employers offer automatic payroll deductions and charitable organizations can set up pre-authorized debit options through your bank account or credit card.”

Canadians are piling on debt, but still call debt reduction their top financial priority

While Canadians continue to piling on a lot of debt, 25 percent say debt reduction their number-one priority according to a recent CIBC poll. Household debt rose to record levels in 2017, but a positive from the survey is that 1/3 are making the necessary adjustments. 46 percent say they reduced spending on non-essential items in 2017, and 31 percent made a household budget. Although it’s believed that the $1.3 trillion in Canadian mortgage debt is a prime reason why only 16 percent achieved their financial budgets. With rate hikes expected from the Bank of Canada in 2018, questions about the economy’s ability to cope have led to a reluctance to raise interest rates quickly.