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Choosing a Group Benefits Advisor Mar 28th
How Getting a Group Benefits Plan Works
A company that is looking for a benefits plan engages an advisor (e.g. a broker or agent) who then submits that company’s details to several insurance companies for a quote. (An experienced advisor will know which insurance companies are best suited for.... More »
Top financial innovations of the last 25 years Feb 29th
To mark MoneySense’s 25th anniversary, we dove into the top innovations that have changed personal finance since this magazine was founded in 1999. From new registered accounts and investment products to online services and developments in artificial intelligence, these are some of the biggest.... More »
No health insurance? Here’s how to keep dental costs from bankrupting you May 24th
Should you get dental health insurance? (Likely no) Can you haggle over prices with your dentist? (Yes!). The Star spoke to experts about strategies for keeping costs in check..... More »
Your FHSA timeline: What to invest in and when Nov 29th
Before you make an offer to buy your first home, you’ll have to determine your budget and save up enough money for a down payment (typically about 20% of the home’s value). That’s probably going to be a good chunk of change—Canada’s housing market is expensive, and if you put down less tha.... More »
How to qualify for EI benefits in retirement in Canada Feb 21st
Ask MoneySense
I’m a 75-year-old male, working part-time and contributing to EI every two weeks; and have for 10 years.
I do have CPP and OAS income.
Do I qualify to collect EI benefits for a period of time if I retire this year? I’ve paid contributions for 10 years and now plan to ret.... More »
Ask MoneySense
I cashed in my whole life insurance policy last year and received a T5 suggesting I have to pay tax on the full amount of my cash value. Is this correct? The cash surrender value was $27,000, I paid $28,000 in premiums, and they told me my pure cost of net insurance was $30,000, whatever that means. It doesn’t make sense to me! When I purchased the policy, I was told I could use this money for my retirement. I don’t remember the insurance agent ever saying anything about tax.
I cashed in my whole life insurance policy last year and received a T5 suggesting I have to pay tax on the full amount of my cash value. Is this correct? The cash surrender value was $27,000, I paid $28,000 in premiums, and they told me my pure cost of net insurance was $30,000, whatever that means. It doesn’t make sense to me! When I purchased the policy, I was told I could use this money for my retirement. I don’t remember the insurance agent ever saying anything about tax.
—Rasheed
Is cashing out whole life insurance taxable?
Ah, Rasheed, I am sorry to tell you the insurance company is correct. I am glad you asked this question because it serves as a warning to anyone who owns a whole life insurance policy. Before cancelling a whole life insurance policy, contact the insurance company or your agent, and ask what the taxable amount will be. You are also wondering how much is taxable.
How not to calculate the taxable amount on insurance
Many people assume the insurance cash value is just like any other investment—50% of a capital gain is taxable according to your income tax bracket…
Cancelling a Personal Health Insurance Plan
– life-insurance-quotes.ca
Can I Cancel My Personal Health Insurance Plan?
Yes, absolutely. You can cancel your plan at anytime. Generally, 30 days notice is required but depending on the insurance carrier your coverage is with and the date your next premium is due it could be shorter than this.
Are There Any Penalties If I Cancel My Plan?
When you provide the notice required, there are no financial penalties, however; some insurance carriers will not let you apply for another health and dental plan with them for at least 2 years (24 months).
Pro Tip!
It is highly recommended to give the insurance company the reason you are cancelling so that they can keep it on file. If you are cancelling because your situation has changed, and you are now covered under an employee sponsored group benefits plan it is VERY important to indicate this. In this situation you can apply for another plan anytime without being restricted to a 2 year wait period.
How Do I Cancel?
If you want to cancel your health and dental benefits plan you should reach out to your Advisor for help…
