Five Financial products You Should Own
By Brenda Spiering, Editor, BrighterLife.ca
You don’t need to be born with a silver spoon in your mouth to build wealth. With the right products, you can grow and protect a healthy nest egg.
Here are five key financial products that should be part of your plan:
1. Registered Retirement Savings Plan (RRSP)
As soon as you begin your working life, you should have a registered retirement savings plan (RRSP). It’s one of the most tax effective ways to save for retirement. You’re allowed to contribute up to 18% of your earned income from the previous year to a maximum of $22,450 for 2011. (If you’re a member of a group pension plan, your contribution room is reduced by your “pension adjustment,” an amount you’ll find listed on your T4.)
Contributions are tax deductible, meaning you can net a tidy tax refund while building your savings. Plus, you can turbo charge your RRSP savings by putting that tax refund back into your RRSP as soon as you receive your cheque.
The Changing Face of Health Care in Canada
Canada’s aging population is going to have a significant impact on our health care needs and costs. According to The Sun Life Canadian Health Index, 90% of Canadians anticipate a financial impact if they were to experience a major or chronic illness. Yet only 58% are financially prepared to cover the cost of a serious illness. Are you prepared?
Why You Need An Insurance Audit
Once you’ve purchased insurance and the contract is in your hands, do you review it? Completing an insurance audit is a final and crucial step in securing coverage. It ensures you have a thorough understanding of the contract obligations and that they are actually in force.
An audit will:
- Check that any assignment was removed from the policies, if applicable
- Verify that you can use the cash value of your policy to pay for future premiums
- Check if the policy was properly drawn up: i.e. owner, beneficiary and premium payor. A taxable situation could be waiting around the corner.
- Disability contracts are tricky to evaluate; pay extra attention to the “definitions” under contractual obligations:
- Own/Regular/Any Occupation
- Residual/Partial coverage
- Waiting Period
- Accumulated days to satisfy waiting period, etc.
Three Important Benefits That Health Insurance Can Provide
In addition to basic advantages of health insurance such as covered prescriptions and dental care, there are three other valuable benefits that health insurance can offer you.
1. Income Replacement
If a disability or illness were to prevent you from being able to work, an income replacement plan can help protect you. A plan of this nature ensures you will receive a monthly tax free income, in accordance with your standard of living, until you reach the age of 65. Read more 
