Should I invest my money or buy a life insurance policy instead? + MORE Feb 8th

Insurance policy getting you down? There are always sound insurance alternatives.
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3 Odd Insurance Claims that Have Actually Been Filed Apr 21st

When mishaps occur, you want your insurance company to help. But,  what about when the claim sounds too good to be true? From a slippery slip and fall to a plane dropping blue ice over Canada, here’s a look at a few of the oddest claims filed. What’s the worst that could happen, right? 1. This.... More »
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MORTGAGE 101: Understanding Different Mortgage Options + MORE Mar 28th

To new buyers, the real estate market can appear intimidating with jargon like amortization, mortgage insurance, fixed vs variable and so on. Here are some of the key terms and mortgage types you’ll encounter when shopping for your home loan. What is a Mortgage? A mortgage is a loan offered by fi.... More »
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3 rules for maximizing charitable donations in your will + MORE Apr 13th

Q. We are preparing our wills and have been advised that charitable donations are credited at 100% in the year of death, and can be used to reduce or eliminate the amount of tax owed for that year. How do we word this in our will so our executor understands our wishes, especially when they may not k.... More »
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What to Do After Your Identity is Stolen? Apr 17th

Identity theft is a global crime where your personal or financial information is stolen to commit fraud in your name. It leads to severe financial and legal struggles. Identity thieves look for any of the following information: Full name Social insurance number (SIN) Driver’s license number Home.... More »
Q: My wife and I are both 40 and have two kids—ages 5 and 7. We are considering buying a joint last-to-die life insurance policy that would cost a fixed $7,105 per year for ten years. That’s a total of $71,050 and the policy would pay $500,000 when the last of us dies. This is a proposition from our advisor after we have made our retirement plan. We have concluded that we have enough savings to retire at 55 with a very comfortable nest egg made up of TFSAs, RRSPs, and defined benefit pension plans, as well as money in non-registered investments.
We do not have any debts except a remaining mortgage of $95,734. We also have life insurance and disability insurance with our employer that would cover our needs if one of us were to die or could not work anymore. The goal of this joint last-to-die policy would be to transfer money tax- free in the future as all other needs are covered either by our savings or our employee benefits.
I am wondering if buying this policy is really a good move and if the cost of this product is reasonable? We can afford the cost without changing our lifestyle but our advisor is not independent so the policy would be sold by its institution and that’s what makes me wary…

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Q. My wife and I are retired, in our late 60s. With interest rates expected to continue rising for the next year or two, and bond funds making almost no gains or even losing value in recent years, I have been considering converting the fixed income portion of our portfolio to GICs.  Would this be a good strategy? — Frank

A. GICs get little respect, and that’s a shame because these humble investments can play a useful role in a balanced portfolio. Frank, your strategy for substituting GICs for bond funds is an excellent one, albeit with a few caveats.

First, we’ll consider the benefits. GICs offer significantly higher yields than government bonds of the same maturity. At the time of writing, five-year Government of Canada bonds were yielding about 1.9%, while you didn’t have to look far to find five-year GICs paying as much as 3.6%.

Normally more yield means more risk, but because most GICs are backed for up to $100,000 by the Canadian Deposit Insurance Corporation (CDIC), a Crown corporation, they don’t carry any more risk than a federal bond…

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