Insurance Planning for Young Families

For young families, making sure your family is financially protected can be overwhelming, especially since there’s so much information floating online. This infographic addresses the importance of insurance- personal insurance.

The 4 areas of personal insurance a young family should take care of are:

  • Health

  • Disability

  • Critical Illness

  • Life

Health: We are so fortunate to live in Canada, where the healthcare system pays for basic healthcare services for Canadian citizens and permanent residents. However, not everything healthcare related is covered, in reality, 30% of our health costs* are paid for out of pocket or through private insurance such as prescription medication, dental, prescription glasses, physiotherapy, etc.. Moreover, if you travel outside of Canada, medical emergencies can be extremely expensive.

Disability: Most people spend money on protecting their home and car, but many overlook protecting their greatest asset: their ability to earn income. Unfortunately one in three people on average will be disabled for 90 days or more at least once before age 65. Disability insurance can provide you with a portion of your income if you were to become disabled and unable to earn an income.

Critical Illness: For a lot of us, the idea of experiencing a critical illness such as a heart attack, stroke or cancer can seem unlikely, but almost 3 in 4 (73%) working Canadians know someone who experience a serious illness. Sadly, this can have serious consequences on you and your family, with Critical Illness insurance, it provides a lump sum payment so you can focus on your recovery.

Life: For young families, if your loved ones depend on you for financial support, then life insurance is absolutely necessary, because it replaces your income, pay off your debts and provides peace of mind.

Talk to us about helping making sure you and your family are protected.

Webinar: Planning during Uncertainty

Do you have a comprehensive plan?
Have you updated your comprehensive plan to reflect the new reality?
Do you have all areas of your financial life organized?
What is the probability of achieving your financial goals given your current strategy?
Are you taking advantage of all available Government Relief Programs?

Please join Bradley Bumstead, lead Financial Planner at Clear Path Financial Planners, at 11 am PST on either Wednesday, June 3rd or Wednesday, June 10th, for a 45-minute in-depth look at how our Clear Path Go Forward Plan is helping clients successfully navigate the challenges presented by the global COVID-19 pandemic.  

You are invited to a Zoom webinar.
When: Jun 3, 2020 11:00 AM Vancouver
Topic: Planning During Uncertainty

Register in advance for this webinar:
https://zoom.us/webinar/register/WN_Z8v30QTBRcWJ2g4YS-3tnw

After registering, you will receive a confirmation email containing information about joining the webinar.

Guide to Covid-19: Government Relief Programs in Canada

The intention for our “Guide to Covid-19: Government Relief Programs in Canada” is to help businesses and individuals to cut through the noise and make sure they’re getting all the help they can receive from the federal and provincial programs.

Federal programs include:

  • Small Business Wage Subsidy

  • Canada Emergency Wage Subsidy

  • Canada Emergency Business Account

  • Canada Emergency Response Benefit

  • Student Loan Programs

Individual provincial programs include:

  • Utilities

  • Housing

  • Student Loan Programs

Financial Advice for Business Owners

We can help you determine where you are today financially and where you want to go. We can provide you guidance on how to reach your short, medium and long term financial goals.

Why work with us?

  • Worry less about money and gain control.

  • Organize your finances.

  • Prioritize your goals.

  • Focus on the big picture.

  • Save money to reach your goals.

What can a we help you with?

We can help you with accumulation and protection

Accumulation:

  • Cash Management – Savings and Debt

  • Tax Planning

  • Investments

Protection:

  • Insurance Planning

  • Health Insurance

  • Estate Planning

How do you start?

  • Establish and define the financial advisor-client relationship.

  • Gather information about current financial situation and goals including lifestyle goals.

  • Analyze and evaluate current financial status.

  • Develop and present strategies and solutions to achieve goals.

  • Implement recommendations.

  • Monitor and review recommendations. Adjust if necessary.

Next steps…

  • Talk to us about helping you get your finances in order so you can achieve your lifestyle and financial goals.

  • Feel confident in knowing you have a plan to get to your goals.

Real Estate or Investments?

One of the age-old financial quandaries asked of financial advisors is “shall I invest in property or funds?”. Predictably, the answer is not at all straightforward and depends on many factors, including your own financial style, personality and circumstances. Let’s take a look at the pros and cons of each choice to help you to be better informed about which could be the most lucrative option for you:

Benefits of investing in funds

It’s all too easy to go along with the generally-accepted myth that investing in property is a sure-fire way to secure your financial future. After all, house prices have appreciated in general terms for several years now and have become a very popular way for young people to invest for the future – this could also be, in part, down to the fact that their parents have benefited from the property booms of the past and made their own money this way, therefore presume the same will work for their children.

It’s fair to say, then, that investing the stock market is a much less common and popular way for people to invest their money. Despite market crashes, long term fund ownership is hands down the greatest creator of wealth in history and high quality funds generally not only increase their profits every year but also pay out increased cash dividends too.

Other advantages of fund ownership include the fact that you can diversify your portfolio easily, borrow against your funds easily and also benefit from the fact that funds are much more liquid than real estate, giving you maximum financial flexibility.

So, why do fewer people invest in funds than real estate?

It could be due to the two market crashes that have occurred since 2000, making people wary of getting involved in what they perhaps see as a complex and inherently risky way to make money. Many fail to take the long-term view of funds and the fact that, to financially benefit in the best way, you need to ride the highs and lows for a number of years to get a good return on your initial investment.

Another reason could be the fact that many people underestimate the real cost of home ownership. Additional costs such as maintenance, insurance and mortgage interest must be factored into investment calculations but are often not, making property a seemingly more attractive investment option.

Drawbacks of investing in funds

You really have to be in this game for the long term to see your money grow consistently and many people don’t have the discipline or patience to hold their nerve and keep their money in the same place for a prolonged period. This can often result in cashing in one’s funds too early and missing out on long term benefits. Similarly, because the prices of funds can fluctuate so much, many are too nervous about investing and don’t see the opportunities to purchase more funds at reduced prices to benefit them in the long term.

Benefits of investing in real estate

Many individuals in their twenties and thirties who are just starting out thinking about how best to secure their financial future feel more comfortable with investing in property and the notion of “owning one’s own home” – likely brought about by their parents’ influence, as discussed above. They perhaps feel more confident in the process, terminology and philosophy of real estate and believe that they are more likely to succeed in this area.

Another benefit could be the fact that, by purchasing a property, you feel that you own something tangible, as opposed to the money invested in funds and shares which could be said to exist only online or on paper.

Finally, many take comfort from the fact that it is potentially harder to be defrauded in relation to real estate as there are so many varied, physical checks that one can perform to verify the facts, such as property inspections, tenant background checks etc, whereas with funds, a lot of trust has to be given to the management company or auditors.

Drawbacks of investing in real estate

There are a number of hidden costs to real estate, particularly if your property is unoccupied for a period of time and you are still liable to pay taxes, maintenance etc. It’s also true that the maintenance of a property can be a time consuming as well as an expensive business, due to the requirement to deal with routine as well as emergency issues.

What’s more, it’s true that the actual value of real estate hardly ever increases in inflation-adjusted terms, therefore the returns can be healthy but the true value of the property doesn’t actually change. It’s due to this that many feel that investing in funds is a much more solid and lucrative way to receive good returns.

Talk to us, we can help you determine what works best for you.

 

 

Paying for Education

Post-secondary education can be expensive, however having the opportunity to plan for it helps with making sure that you’re capable to meet the costs of education. In addition, when you have a plan, it’s easier to make financial decisions that align with your goals and provide peace of mind. In the infographic, we outline 7 sources of funds for paying for post-secondary education:

  • Registered Education Savings Plan

  • Tax Free Savings Account

  • Life Insurance

  • Scholarships, grants, bursaries

  • Personal Loans, Lines of Credit

  • Government Student Loan

  • Personal Savings

If you need help planning to save for your child’s post-secondary education, contact us!

Financial Advice

An advisor can help you determine where you are today financially and where you want to go. An advisor can provide you guidance on how to reach your short, medium and long term financial goals.

Why work with a Financial Advisor? 

  • Worry less about money and gain control. 

  • Organize your finances. 

  • Prioritize your goals. 

  • Focus on the big picture. 

  • Save money to reach your goals.

What can a Financial Advisor help you with? 

Advisors can help you with accumulation and protection

Accumulation: 

  • Cash Management – Savings and Debt

  • Tax Planning

  • Investments

Protection: 

  • Insurance Planning

  • Health Insurance

  • Estate Planning

How do you start? 

  • Establish and define the financial advisor-client relationship.

  • Gather information about current financial situation and goals including lifestyle goals. 

  • Analyze and evaluate current financial status. 

  • Develop and present strategies and solutions to achieve goals. 

  • Implement recommendations. 

  • Monitor and review recommendations. Adjust if necessary. 

Next steps…

  • Talk to us about helping you get your finances in order so you can achieve your lifestyle and financial goals. 

  • Feel confident in knowing you have a plan to get to your goals.

Why You Should Consider Critical Illness Insurance

If I did a straw poll, I’m sure I’d find that the majority of those asked have some form of life insurance. The reasoning behind taking out this cover is usually centered around the desire to provide protection and security to their family and loved ones in the event of their death, which is clearly an admirable objective. But, if I asked the same group of people who of them had critical illness insurance – essentially, a policy that pays out if you become too ill to work – in all likelihood the number would be much smaller.

Why is this? It makes sense on paper that people would want to sustain their level of income in the event that they become disabled or too ill to work, yet some of the most common objections include the price, a preference to save themselves for such an event (often known as being self-insured) or simply a sense of denial that this could ever happen to them.

Critical illness insurance varies from policy to policy but typical conditions that it covers in Canada includes heart attack, stroke and cancer. Unlike other types of insurance that provide income replacement, if you are seriously ill, critical illness insurance provides a lump sum benefit that can be used in any way you choose.

The benefits of critical illness insurance

Whilst taking out any kind of insurance policy comes down to personal choice and one’s own individual circumstances, many independent financial experts recognize the benefits that critical illness insurance can offer. Here are some of them:

  • Whilst saving and self-insuring can seem like an attractive alternative, it simply isn’t an option for many. Even if you are fortunate enough to have the means to save for such an eventuality, you would need to be able to guarantee a solid and consistent return on your investment for it to outweigh the financial benefit of critical illness insurance – some estimates put this at a rate of around 10% return for 20 years.

  • Whilst some employers do offer company disability plans, they typically do not pay out the full amount of your pay cheque on an ongoing basis, which can have the potential to have a serious impact on your personal finances, just when you need such a worry the least. What’s more, one of the major advantages of a critical illness policy is that, if you are able to return to work and therefore begin earning again, you still have the benefit of the lump sum that has been paid out under the policy – offering you an incomparable measure of financial freedom to potentially pay off your mortgage or put your kids through university. Essentially, offering you much more financial freedom.

In short, there are no perfect answers in the area of your personal finances, but if you are looking for an option that has the potential to offer you a real sense of peace of mind to secure the financial future of you and your family, critical illness insurance is certainly an interesting avenue to explore.