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Staying Flexible with Universal Life Insurance
Universal life insurance provides great flexibility, and presents you with the opportunity for savings. Each universal life policy has consists of two parts: life insurance and an investment account. If you pay premiums that are higher than your cost of insurance COI and associated fees, then the rest of the money goes into the investment account. You can accumulate money in this account, and this is typically on a tax-deferred basis.
Most universal life policies have a number of funds to choose from in their investment account. They may include funds that pay interest and funds that vary in value based on stocks just like mutual funds. Earnings on the investment account may or may not be guaranteed, depending on what type of investment you have chosen.
Unlike whole life policies, universal life insurance uses current interest rates. This means that if interest rates go up, you can accumulate more money than expected in your account, and you can use that money to pay premiums. However, you also share the risk that interest rates or other investment returns may go down.
COI discount offered (%) based on funding ratio – level COI
| Age | 1.00 | 1.50 | 2.00 | 2.50 | 3.00+ |
| 0-50 | 0 | 5 | 10 | 15 | 20 |
| 55 | 0 | 3.75 | 7.5 | 11.25 | 15 |
| 60 | 0 | 2.5 | 5 | 7.5 | 10 |
| 65 | 0 | 1.25 | 2.5 | 3.75 | 5 |
Please refer to the SunUniversal Life advisor guide for full details on how the discount is calculated.
The COI discount provides an excellent advantage.
Uncover the benefit for you as clients today!
Call now 416-900-6871
Changes to the rates for health insurance products
In the continuation of historically low interest rates that have made Desjardins Financial Security to
review the rates of their permanent life insurance products, have also led them
to apply increases to some of their health insurance products. The new rates
will come into effect on June 13, 2012.
The products whose rates will increase are as below :
Harmony T65 and T75 paid up (traditional insurance only)
Harmony New Generation
Health Care Advance and Health Care Advance 65
Accelerated Health Care
Independent Living
It’s not just RRSP contributions that entitle you to lower taxes deducted at source. the CRA allows you to claim child care expenses, alimony, maintenance or support payments, employment expenses, and interest expenses and carrying charges on investment loans, among other tax deductions, to reduce the taxes you pay throughout the year.
Establishing an emergency fund
It is important to have easy access to emergency money in order to cover unexpected events such as a job loss, an illness or a major home repair.
Topping up your TFSA
Contributions to a Tax-Free Savings Account (TFSA) allow the investment growth to accumulate and be withdrawn tax-free. because TFSA withdrawals are added back
to your available TFSA contribution room in the year following the year of withdrawal, there is flexibility in using the assets for mid to large purchases.
the only disadvantage to this strategy? no more tax refund celebrations. the huge advantage? by lowering the amount of taxes that are deducted at source by your employer, you can put your money to work for you to eliminate your debt more quickly or increase your savings.
In other words, by putting the money that already belongs to you back in your pocket – and without adding a single cent of extra cash – you can be on your way to financial independence sooner.
Contact your advisor directly for information about reducing your taxes deducted at source.
Tax refund to Canadians feels like an unexpected bonus, a pleasing surprise among all the bills and taxes in the mail. In reality, however, what it means is that tax refund that you paid the Canada Revenue Agency (CRA) too much tax throughout the year. You get your overpayment back as a tax refund, but until you deposit that cheque you are essentially making an interest-free loan to the government.
Fortunately, there is an alternative. If you inform the government that you will be making non-payroll
If you have debt, target the debt with the highest interest rate first, then your mortgage. What you do with this additional cash flow depends on your situation and your goals. For financial security, debt elimination followed by wealth accumulation should be a priority over spending the ‘found’ money. RRSP contributions, for example, the Government will authorize a reduction in the taxes that are deducted at source by your employer. You can use this additional cash flow in a number of different ways – without making any shortage at all in your take-home pay.
You May Want To Rethink Your Home Buyers Plan Savings
The adjusting nature to recontribute the TFSA withdrawal without time locked limits. If HBP repayments are not made on time, the annual repayment amount is added into your income and any missed repayment amount means the RRSP room is lost almost forever,However there are no conditions on TFSA withdrawals, whereas the HBP requires you to be a first time home buyer
Whether to save in a TFSA, RRSP or both may depend on your savings needs, your eligibility for income tested benefits and your current and expected future financial situation and income level.
Alternatively, you could each contribute $5,000 a year for 5 years to a TFSA and then withdraw $25,000 plus any investment earnings tax free and with no required repayments
If you are saving for a down payment on a house, a TFSA might be a better option than saving in an RRSP and withdrawing under the Home Buyers Plan (HBP). There are several reasons for this.
There is no restriction on how much you can withdraw from your TFSA while the HBP restricts you to $25,000 from each your RRSP and your spouse’s RRSP. Similar logic could be applied to the Life Long Learning Plan. By using a TFSA to save and fund continuing education, contributors can gain increased withdrawal flexibility while eliminating any enrollment requirements or repayment conditions.
