Beneficiary Designation – Should Your Life Insurance Beneficiary be an Individual beneficiary or your Estate?

Your beneficiary designation will determine who benefits from your estate in the event that you pass away. When buying life insurance, most people assume it’s best to name an individual beneficiary — for example, a spouse or a child. However, there are times when it makes more sense to have the proceeds of your policy go to your estate. This means making your beneficiary designation your estate and not an individual.

Here are the ins and outs of leaving your life insurance to your estate. Naming an estate as your beneficiary designation can be a good choice when you want the proceeds to meet non-traditional life insurance needs — meaning, other than to provide for a spouse or children - or needs that go beyond individual beneficiaries.

When your beneficiary designation is your estate, the proceeds of the policy are distributed according to the terms of your will, along with your other property. Your insurance proceeds are brought together with all your other assets.

Consider whether you think you’ll need to change your estate plan as you move through life. Naming your estate as your beneficiary means changes can be made more simply: through your will. You won’t have to worry about changing beneficiaries on insurance policies.

Here are some other reasons you might want to consider naming your estate as your life insurance beneficiary. You can use this strategy to:

Leave money to charities. You can specify in your will how much of your estate goes to each charity and change your instructions at any time, without naming charities as life insurance beneficiaries. Set up a trust. Leaving cash to an estate can sometimes make it easier, as the will can dictate the setup of trusts for children. This can be useful when you want to specify how money left to children is to be spent or to make provisions for children to receive funds when they reach a certain age.

Pay expenses. You can use life insurance proceeds to pay costs associated with your estate. These can include final expenses, debts and tax liabilities. There are a couple of caveats you should be aware of when considering naming your estate as the beneficiary of your insurance policy. They include the fact that policy proceeds (along with the rest of your estate) may be reduced by the cost of probate — the legal process that validates the authenticity of a will. Probate can also delay distribution of assets and your estate may be subject to legal claims from creditors.

However, under the right circumstances, the advantages of naming an estate can outweigh these considerations. If you name your estate as a beneficiary, it’s important to make sure your will is always up to date.  Together, we can explore when and where insurance proceeds will be needed and determine whether naming your estate as beneficiary makes sense for you. For more information about beneficiary designations and whether to name an individual as your life insurance beneficiary or your estate contact Gary Mandel by calling (416) 849-1653 or by visiting www.wecoveryou.ca

Retirement Planning in Canada - How to Talk to Your Parents About Their Retirement Plans

At some point, you’ll need to have “the talk” with your parents about their finances and their financial future. Retirement planning in Canada is the only way for them to keep their financial future on a solid foundation and for you to prepare yourself to provide the help they might need as they grow older.

Helping your parents make a retirement plan is about their needs, not yours, and retirement planning is not always an easy discussion to have. Parents may see your attempt to discuss their retirement plans as an intrusion - especially in families where talking about money is taboo. They may even fear that you’re trying to take control of their money. But it’s important because one or both of your parents may become ill or incapacitated and unable to manage their finances in the future.

In addition, the health care in Ontario leaves much to be desired and so if your parents want to retire in comfort, a strong retirement plan will be key. Retirement planning in Canada could consider their life insurance needs, long term care planning, critical illness coverage and more. It all depends on your parent’s health, financial circumstances and future desires.

They should be aware that without thoughtful planning, how they are cared for at that time could be entirely out of their control. It’s about their needs, their comfort and how they want to be cared for.

Don’t wait for a crisis. Talking to your parents and planning ahead for their retirement will help make sure their wishes are carried out, and potentially eliminate squabbles among family members if your parent’s wishes aren’t clear.

Retirement planning in Canada is really important and helping your parents see the benefits when making their retirement plans can make the conversation much easier.

You can avoid problems and alleviate worries concerning their retirement planning by showing your parents the benefits of sharing their financial information. Let them know that it will be easier for you to help them in the future if you have the information now. Stress that it’s important for them and their family, financially and emotionally. Some discussion points when discussing retirement planning in Canada include:

• Do your parents have up-to-date wills? If so, where are they kept?

• Do they each have powers of attorney (both for property and health care)?

• Who are the executors in their wills, and has this decision been reviewed lately?

• Will they have enough funds to continue living comfortably? To plan, they need to provide details of assets, liabilities, income and expenses, and details of financial accounts — or at least where accounts are held. As well, contact information for financial and legal advisors is necessary.

Don’t be afraid to seek expert advice. We can prepare you for a talk with your parents about finances. And if it will help, we can be part of the discussion. For more information about retirement planning in Canada and helping your parents make their retirement plans contact Gary Mandel by calling (416) 849-1653 or by visiting www.wecoveryou.ca

What Are Segregated Funds? We Make Sense of Segregated Funds, an Emerging Market and High Yield Investment

Many investors think of emerging markets only as stock market investing opportunities. But did you know that in recent years emerging bond markets have produced consistently strong returns? Currently, a growing selection of Canadian segregated funds can help you benefit from these returns and at the same time increase the diversification of your fund portfolio.

More to choose from and contrary to what many believe, emerging market bonds aren’t as risky as they once were and have proven to be a high yield investment.

Segregated funds don’t have to be confusing. A large percentage of emerging market bonds are higher-quality “investment grade,” unlike a decade or so ago. According to a major U.S. financial institution survey, 56% of emerging markets bonds is now investment grade, up from 17% in 1998. Plus, the difference in yields between emerging and developed markets can be considerable — often double or more for similar government bonds. For example, according to Bloomberg data, as of January 31, 2011, 10 year U.S. treasuries yielded 3.4%; meanwhile, 10 year government of Brazil bonds yielded 13%. That can make a significant difference in your portfolio’s fixed-income returns.

Certainly, part of that yield difference stems from the fact that emerging market bonds must pay higher interest to compensate investors for the risk of investing in emerging countries. Many emerging countries have environments of chronically higher interest rates, in which bonds must compete for investors’ cash. Latin American economic powerhouse Brazil, where central bank rates are among the world’s highest, is an excellent example.

Foreign-exchange risk must also be factored into your decision. Yet Brazil, like several other emerging economies, has had its sovereign credit ratings upgraded in recent years. The reason is emerging market governments and central banks have become much better at managing economies
and tempering boom-and-bust cycles.

In fact, some emerging economies fared better than their developed counterparts during the recent recession and have since returned to much higher growth rates. Finding opportunity in segregated funds emerging debt markets can be difficult to navigate. We recommend the professional money management of segregated funds that invest in emerging market bonds.

The selection of segregated funds available to Canadians is growing in recognition of the fact that emerging market securities are in demand and that they offer Canadians an alternative to traditional developed country bonds or corporate bonds.

Emerging market bond funds usually focus on bonds issued by governments, although some may hold debt issued by corporations. They typically aim for a combination of income and capital growth through potential appreciation in bond prices. We should look for funds that diversify holdings among geographic markets and bond types to help maximize returns and manage risk. You can also get exposure through international funds that hold debt securities of both developed and emerging markets.

We’ll be pleased to show you how emerging market bond funds can help boost your fixed-income returns, improve the diversification of your overall portfolio and help you reach your financial goals.

For more information about segregated funds and high yield investments please contact Gary Mandel by calling (416) 849-1653 or visit www.wecoveryou.ca

Life Insurance Coverage in Ontario Should Be Reviewed Annually as Life Insurance Needs Can Change

Like all aspects of your finances, insurance needs can change. Families mature, and new life insurance products come available that offer different incentives. It is always a good idea to review your life insurance coverage from time to time to ensure it offers the best possible protection.

Your evolving insurance needs depend on your current and changing life situation and your financial goals. Insurance changes should be based on an exploration of the key aspects of your life and adjusting your life insurance coverage in Ontario to better reflect your current insurance needs.

Here are three to consider:
1. Life events – Some of the key developments that can call for insurance changes include marriage, divorce, birth of children, change in income or a sudden change to your wealth. For example, perhaps your insurance needs change because your family is larger and you want to leave more for your heirs. Alternatively, perhaps you would be better suited to consider insurance products that offer a tax benefit as one example because you’ve built up your wealth, paid off the mortgage and your kids have finished their post-secondary education. A review might even reveal how we can save money on life insurance coverage. For example, if your health picture has changed for the better – perhaps you’ve lost a great deal of weight or your high cholesterol has dropped – we might be able to take advantage of the breaks on premiums some insurers offer under those circumstances and make the necessary insurance changes.

2. Beneficiaries – One thing we should always review is your beneficiaries. These are common insurance changes since they’re the ones who receive the proceeds of your policy, it’s important that we always make sure they’re who you want them be and that you’re taking care of them in the best way possible. You want to make beneficiary changes as you go through life to accommodate new children or grandchildren. When naming a person as your beneficiary, instead of your estate, the proceeds will be passed on directly to your named beneficiary. This will be private, not public record, and they will bypass probate fees. Your insurance needs depend on your current and changing situation and your financial goals.

3. Your financial situation – We should explore your life insurance coverage in Ontario in relation to your overall financial picture. Remember insurance is just one part of a long term financial strategy, which means the coverage that’s right for you depends on other aspects of your financial life. If your life insurance coverage policy includes an investment component, we can explore how it fits in with your overall plan. We’ll examine its investment performance and consider the best ways to use the cash value.

Discuss your life insurance coverage with your Ontario Insurance Advisor at least once a year. Then you’ll have peace of mind that comes from knowing that you’re well covered. For more information how you can review your Life Insurance Coverage in Ontario contact Gary Mandel at IFCG by calling (416) 849-1653 or by visiting www.wecoveryou.ca

Long Term Care Insurance Planning For When You Need Private In-Home Care in Ontario

The idea of private in-home care during a major long term illness is far more attractive than an extended stay in an Ontario long term care facility. According to the Canadian Home Care Association, 35% to 50% of Canadians over the age of 65 will require some form of long term or palliative care.

Here are some statistics:

• About 50 thousand strokes occur in Canada each year. This is the leading cause of transfer from hospital to long term care.
• 1 in 11 Canadians over 65 is affected by some sort of dementia disease such as Alzheimer’s.
• 7% of Canadians age 65 and over reside in health care institutions.

Private home care services allow individuals to remain at home surrounded by family and friends. It allows them to continue to contribute to their community. This also makes it easier for families to continue caring for their loved one.

Receiving that care in the comfort of your own home can be a way to recover from a long illness. This can also include palliative care, but no matter what the reason might be, private home care in Ontario is costly. This is why, if you would prefer to have private home care should the need arise, you should begin long term care insurance planning today so that you can meet those costs.

The level of private home care coverage in Ontario that is offered by insurers differs. Some policies might offer less financial aid for private home care than for institutional care. When planning long term care in Canada, you should consider how much private home care would cost where you live. Since costs vary throughout Canada, it’s important to be realistic. Unfortunately, many communities have a shortage of qualified home care workers. If access to private home care is important to you, then you need to keep that in mind for your decision with long term care insurance planning. You want to ensure that if you need it, home care will be affordable to you.

To be able to afford the best long term care and minimize your costs, the sooner you start planning the better. Long term care insurance planning in Ontario begins with your Ontario Insurance Agent. Long term care in Canada continues to face increased pressure and quality of care has suffered as a result of low staffing and poor living conditions. This is not how you want to live once you retire and the best way to be in a position to afford in-home care is to start long term care insurance planning now. This will give you peace of mind, knowing that your long term care is covered.

For more information about long term care insurance planning for when you need private in-home care in Ontario contact Gary Mandel at IFCG by calling (416) 849-1653 or by visiting www.wecoveryou.ca

Financial Management Fundamentals For Those Who Have Children Who Will Receive An Inheritance In Ontario

If you’re a parent, you know how important it is to raise our children to be independent and successful. Even though we may have wonderful kids, we still worry about our children’s behaviour, who our children will marry, if they will be successful and if they will be financially responsible. You will want to make sure that your children will be able to manage their financial affairs, especially if they are going to be heirs to an inheritance in Ontario. We want to give our children the financial management fundamentals that they will need for their future.

Chances are you’re going to pass along the bulk of your wealth to your children. You’ll feel better if you know that your children are able to manage money and will be able to draw the maximum benefit from their inheritance in Ontario.

According to a poll conducted by one of Canada’s big five banks, only 58% of respondents said they were confident that their children would be able to properly manage money left to them. Your children’s behaviour towards money and the financial management fundamentals that they will need is extremely important and there are steps you can take to provide your children the information they will need to manage money they receive wisely.

Knowledge is key. Teaching your children financial management fundamentals is the first step to preparing them for the future. This is where an Ontario Insurance Advisor can come in very handy. There is a wealth of books, workshops and websites that will aide in teaching your children the basics of sound investment management. You can also work with a local Ontario Insurance Advisor to come up with a plan to prepare your children to manage their inheritance.

Many parents worry that their adult children will squander an inheritance by spending it away bit by bit, instead of using it wisely to provide for their own futures. Teaching your children how to manage money is positive in many ways. Share your insight. You know from your own experience that effective wealth management means focusing on making wealth grow overtime, through sound long-term investments, effective tax moves, and a host of other strategies that reinforce wealth accumulation.

Effective estate planning will include a combination of choosing the right insurance products and ensuring that your children are fully equipped to manage the proceeds properly in the event that they end up inheriting. For more information on financial management fundamentals for your children who will receive an inheritance, please contact Gary Mandel at IFCG by calling (416) 849-1653 or by visiting www.wecoveryou.ca

Ontario Insurance Advisors Must Protect Their Client’s Personal Information

With the internet, web-based CRMs and portals an Insurance Advisors private client data can be more at risk than ever before.

The number of threats and pitfalls of operating laptop computers are more severe and more frequent than they once were. Many Insurance Advisors in Ontario are mobile and are using laptops, so it has become increasingly difficult to protect data.

Insurance Advisors are provided with the most sensitive client data that includes but is not limited to medical, personal and financial information. We sometimes hear in the news that technology giants like Sony have had their client data hacked and when we hear these stories we quiver because this could result in identity fraud and a number of other serious outcomes.

In the US the Pentagon Federal Credit Union, a bank used by nearly 1 million U.S. service members, a single hacked laptop led to a much bigger problem. The company found that someone had hacked a laptop on its network and used it to access a company database that contained credit card numbers, addresses, Social Security numbers and other sensitive information.

Protecting client data can be expensive for an Independent Insurance Advisor and so sometimes it is not made a priority when it should be a top priority. This is why it is very important that consumers choose an Insurance Advisor who is part of an MGA (Insurance Brokerage) that takes protecting client data seriously. On the same point a consumer has every right (and should) ask their insurance advisor what their privacy policy is and what measures the organization takes to protect their client’s personal information.

On the flip side, an Insurance Advisor who is changing MGA’s or is entering the business and choosing an MGA, should be concerned with the issue or privacy as it relates to computing. Our brokerage has spared no expense in this regard because the integrity of our client data is so important.

We take great measures to ensure that our client’s data is protected and we also ensure that our agent’s data is protected by providing them with access to the same technology we use as an MGA. This month we will be co-championing a webinar with “NoPanicComputing” in an effort to keep our agents informed of the threats out there and what they can do to prevent their client’s personal information from threat of being hacked.

For more information about how Ontario Insurance Advisors can protect their client’s personal information, contact Gary Mandel at IFCG by calling (416) 849-1653 or by visiting www.ifcg.com OR or to participate in this beneficial Webinar by registering https://www3.gotomeeting.com/register/573635430