A Money Management Webinar for You

Creating an online Money Management seminar is something I have been thinking of for some time, and I think that now is the time to move ahead. I would, however, appreciate a little input. Here’s what I have in mind as an initial session.

Participants would be led through a process to identify their cash flow, their current net worth, and creating a household inventory. We would discuss RRSPs and the new Tax Free Savings Account. Income protection (paycheque insurance) will be covered, including group benefits from employment. Of course, other money tips could be expected.

You could help me by replying to this post on the blog, by email, or by phone. Please let me know if there are specific topics you would like to see in an initial or followup webinar. I would also like to know whether you would prefer to have an interactive session with others, watch a prerecorded broadcast, or actually attend a group seminar that is not online. If attending a live webinar, what time of day and day of the week is best?

Season’s greeting to all!

**This message is an expression of the author’s personal opinions. The companies represented by Antony (Tony) Ratcliffe of Ratcliffe Wealth & Risk Management, as an independent agent/broker in Alberta, Canada, will not be held liable in any way for the opinions expressed herein.

Understanding Term Life Insurance

I would like to help you understand term life insurance. If you do understand, then you can jump right to some important questions: Are you paying too much for your term life insurance, are you underinsured, are you overinsured, and why should you have a personal term insurance policy? There is a lot to be written on this subject, but I am going to provide a little insight that may lead to further questions or discussion.

First, term insurance differs from permanent insurance in that it will eventually expire at a given age. Quite common are term policies that are guaranteed renewal and convertible. This means that the stated term (often 10 or 20 years) will renew for further peiods of that length without evidence of good medical health. The renewal premium rates are specified in the original illustration provided by your insurance agent and in the insurance policy. “Convertible” means that you can convert the policy to a permanent one, without evidence of good health, up to the conversion date.

In general, the premium rates for new term insurance policies have decreased. Also, please understand that it is less expensive to obtain a new policy than to pay the guaranteed premiums for the renewal period if you are still in good health. This means that you should discuss with an insurance agent whether it is in your best interest to consider a new policy at this time. A number of factors must be considered, but I would definitely be considering it close to the renewal dates for a term policy.

You may also be paying too much if you are overinsured and paying for coverage you do not need. You may be underinsured. Ask for an insurance needs analysis to see where you stand.

I want to touch on one advantage of a personal policy rather than the creditor type obtained, as an example, with a mortgage. Here’s my concern. If you obtain mortgage insurance, the insurance coverage decreases as the mortgage decreases. In later years, you may wish to buy a new property, at a higher value, or change your mortgage to a new lender. If your health is not as good, you could find yourself uninsurable or facing surcharges. If uninsurable, the best you could hope for is to have the remaining coverage amount relate to the new property. If you go to a new lender, you could be without coverage. Had you obtained a personal policy in the first place, you would still have that full amount of coverage. Also, the traditional mortgage insurance, through the lender, will pay the amount of the outstanding mortgage to the lender. With a personal policy, the beneficiary decides whether the mortgage should be paid or if monthly payments should be continued with the death benefit used for other purposes.

You do not want to buy more insurance than you need, but it is important to project future needs. Obtaining coverage while you are younger and healthy will result in lower premiums!

What would you like to know about term life insurance or other coverages?

 

**This message is an expression of the author’s personal opinions. The companies represented by Antony (Tony) Ratcliffe of Ratcliffe Wealth & Risk Management, as an independent agent/broker in Alberta, Canada, will not be held liable in any way for the opinions expressed herein.

Questions to ask yourself relating to Living Benefits

There are four questions that I like to pose. For most, the answers should lead to the conclusion that a discussion of Living Benefits with your insurance advisor is in order. Here they are:

1. Do you know someone who has had cancer, a heart attack, or a stroke, or another serious health condition?

2. Did he or she plan on it?

3. Did he or she go thorugh any unplanned emotional or financial distress at that time?

4. Would cash have helped?

The Living Benefits include Disability, Critical Illness, and Long-Term Care Insurance. One must also ensure they are adequately covered for extended medical and hospital, particularly when traveling. For a quick introduction to Critical Illness Insurance, I invite you to read my post and watch the short, linked movie: The Origin of Critical Illness Insurance.

 

**This message is an expression of the author’s personal opinions. The companies represented by Antony (Tony) Ratcliffe of Ratcliffe Wealth & Risk Management, as an independent agent/broker in Alberta, Canada, will not be held liable in any way for the opinions expressed herein.

The new Tax Free Savings Account

You have probably heard about the Tax Free Savings Account (TFSA) for Canadian residents. Do you understand what it means and how it might fit into your financial plan? It is apparent that there are misunderstandings, or a lack of knowledge, about how it can be used.

You can open an account now, with deposits taken as of January 1, 2009. Okay, due to the holiday, January 2 is more realistic! Every Canadian resident, age 18 and older, will have contribution room of $5,000 each year, regardless of income. This will also be indexed and rounded to the nearest $500. Unlike the RRSP, contributions are not tax deductible. However, any gain in value is not taxable, so no tax is payable when withdrawals are made.

A real advantage to the TFSA is the fact that amounts withdrawn are added back to the contribution room. In other words, you can withdraw and later return the amount to the account. This can be beneficial for a lot of financial planning strategies. You should also be aware that the types of investments vary widely from daily interest savings accounts to longer term holdings.

The TFSA will be an ideal way for people to establish their emergency fund, or rainy day account. It can have other short-term or long-term uses, so be sure to talk to your financial advisor.

 

**This message is an expression of the author’s personal opinions. The companies represented by Antony (Tony) Ratcliffe of Ratcliffe Wealth & Risk Management, as an independent insurance agent/broker in Alberta, Canada, will not be held liable in any way for the opinions expressed herein.

Left without adequate group benefits?

Many people find themselves without group medical/health benefits. This may include the self-employed, and it may be individuals who work for an employer that is unwilling or unable to provide coverage. I have also seen employees decline coverage thinking they were fully covered by their spouses’ employers. The latter may be true of health and medical coverage, but that does not extend to disability insurance. Others may have coverage that is inadequate for the employee needs.

If you do have benefits, I would like you to obtain a copy of your benefit coverage booklet. If you do not have one handy, ask your human resources department. Read the coverage carefuly–particularly limitations on prescriptions, life insurance, and disability insurance. Disability coverage will be limited in amount and, by virtue of the definitions, the duration. Your prescription costs may not be high at this time, but the it can be staggering if diagnosed with conditions that call for very expensive drugs. These may be beyond reach without adequate coverage. If you have any questions, ask for clarification.

If you do not have benefits, or you feel they are limited, do not leave yourself without coverage. Talk to a financial advisor who is licensed for life and accident & sickness products. Find out how an individual plan can provide the protection you and your family need. In financial planning, an important consideration is risk management. You do not want to build your wealth and suddenly lose it due to unforeseen circumstances.

 

**This message is an expression of the author’s personal opinions. The companies represented by Antony (Tony) Ratcliffe of Ratcliffe Wealth & Risk Management, as an independent insurance agent/broker in Alberta, Canada, will not be held liable in any way for the opinions expressed herein.

RRSP Loan Rates Increasing

I’ve received yet another notice of RRSP rates increasing next week. It looks like the opportunities for prime or prime minus are disappearing. If an RRSP loan is on your mind to ensure an income tax deduction, call your advisor (or, preferably, me) right away. Just remember, the loan proceeds can be retained in guaranteed investments. If you don’t fully understand RRSPs and whether they are appropriate for you, your advisor can help.

 

**This message is an expression of the author’s personal opinions. The companies represented by Antony (Tony) Ratcliffe of Ratcliffe Wealth & Risk Management, as an independent insurance agent/broker in Alberta, Canada, will not be held liable in any way for the opinions expressed herein.

Segregated Fund Guarantees

Diminishing value in investment accounts is definitely causing concerns. This is raising the awareness of the maturity and death benefit guarantees provided with segregated funds. A brief overview of segregated funds is provided by Empire Life. Their page also provides a link to the Canadian Life and Health Insurance Association where a number of publications are available to help you understand insurance products. One is, ‘A guide to segregated fund contracts.’ Perhaps your insurance advisor has already talked to you about the benefits of these funds. Either way, if you don’t have a clear understanding of them, I encourage you to take some time to learn a little more and ask questions.

 

**This message is an expression of the author’s personal opinions. The companies represented by Antony (Tony) Ratcliffe of Ratcliffe Wealth & Risk Management, as an independent insurance agent/broker in Alberta, Canada, will not be held liable in any way for the opinions expressed herein.

Understanding the guaranteed income for life offerings

During one of our recent social media group meetings, the Social Web Meetup in particular, I happened to mention the guaranteed income for life products, known also as Guaranteed Minimum Withdrawal Benefit. My friend asked if I would arrange a small coffee meeting to provide some information. Of course I will! As I explored what I would present in that meeting and in a webinar, I realized there was a great presentation all ready to go. One of the companies I represent, as an agent, is Manulife Financial Services. They introduced the first such product, known as IncomePlus. Manulife has some really good material on their website. Included is a 15 minute video that describes IncomePlus. There are also shorter videos breaking it down into segments.

I’m definitely ready to meet over coffee to discuss how IncomePlus and other products might fit into your plan, but I feel the benefit of this professionaly prepared video is too good to pass by. Please have a look and then consider talking to me or your financial advisor. If you are interested in the coffee meeting, just let me know and you can join us or we can meet separately.

Please visit the Manulife IncomePlus website. It opens with a short introductory video. The other videos are accessed through a link on the left side.

 

Points to Ponder

I am sharing 4 points that I presented last night to those I met in Speed Networking. This event is a periodic event of the Edmonton Chamber of Commerce. It is an opportunity to meet a variety of people in a business networking setting.

Since I only had about 45 seconds with each person, the following points were made in pretty much this brevity. Of course, I welcome the opportunity to discuss them in more detail with you, or you may wish to discuss them with your current advisor.

1. Term life insurance rates are now lower, so review your needs and coverage.
2. Life insurance, yes, but protect your most valuable asset—your ability to earn a living.
3. Insurance policies can include a Return of Premiums.
4. Guaranteed investments and income for life may make sense.

**This message is an expression of the author’s personal opinions. The companies represented by Antony (Tony) Ratcliffe of Ratcliffe Wealth & Risk Management, as an independent agent/broker in Alberta, Canada, will not be held liable in any way for the opinions expressed herein.

What is important to Tony?

This question could be addressed in different ways, but I am going to focus on my work and business and my current activities. First, as many know, I am passionate about distance education and lifelong learning so, if I may, I will write about my continuing professional education. I regularly attend educational sessions presented by my various suppliers and by Advocis, The Financial Advisors Association of Canada. In addition, I take other courses. Right now, I am registered in the first of two courses toward the Registered Health Underwriter (RHU) designation. This program focuses on critical illness, long-term care, and disability insurance, in addition to group benefits.

The Chartered Life Underwriter (CLU) designation requires completion of four courses in the Certified Financial Planner (CFP) program plus 3 more. I completed the first four plus the first CLU course. Should I wish the CFP designation, I have a comprehensive and CFP exam to write. For the CLU, two more courses to go!

In my business, this is the time that I need to be talking to people. There are concerns about the volatility in the markets and the recent account statements being received. This is certainly the time to talk about the income for life programs that guarantee the amount invested, provide bonuses each year, and pay a guaranteed income. These programs take some explanation, so that is the focus of future meetings with prospective new clients. If this is not appropriate for the client, there are still principal guarantees with other investments I recommend.

Another area of concern to me is paycheque insurance. What happens if you are ill or injured? Will you have a continuing stream of income? If you do have the satisfaction of employer benefits, do you fully understand the limitations? I enjoy the opportunity to sit down and review coverage, even if just to educate. Remember, lifelong learning is a passion. Those who teach learn twice, so helping others often involves new learning for me.

Last, you should also know that I have the pleasure of being an online instructor for the University of Calgary in the Business and Professional Programs. In the spring, I taught Emergency Planning for Industry. Now, I am developing my January course, Risk Assessment. This just makes sense to me for two reasons. Everything is risk management related, from my dealings with clients to the risk management related courses. And, my graduate degree is a Master of Distance Education.

I would like to run some educational sessions for my clients and others. Please let me know your thoughts as to whether you would prefer to attend a session in person or thorugh a webinar.

**This message is an expression of the author’s personal opinions. The companies represented by Antony (Tony) Ratcliffe of Ratcliffe Wealth & Risk Management, as an independent agent/broker in Alberta, Canada, will not be held liable in any way for the opinions expressed herein.

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