6 Reasons Why You Should Buy Life Insurance

For many people, their first experience with life insurance is when a friend or acquaintance gets an insurance license. In my case, a college friend, recently hired by a major insurance company, contacted me (along with all of his other friends) to buy a $10,000 policy underwritten by his company.
Unfortunately, however, this is how most people acquire life insurance – they don’t buy it, it is sold to them. But is life insurance something that you truly need, or is it merely an inconvenience shoved under your nose by a salesperson? While it may seem like the latter is true, there are actually many reasons why you should purchase life insurance.

 Reasons to Buy Life Insurance

As I grew older, got married, started a family, and began a business, I realized that life insurance was indispensable and fundamental to a sound financial plan. Over the years, life insurance has given me peace of mind knowing that money would be available to protect my family and estate in a number of ways, including:
1. To Pay Final Expenses
The cost of a funeral and burial can easily run into the tens of thousands of dollars, and I don’t want my wife, parents, or children to suffer financially in addition to emotionally at my death.
2. To Cover Children’s Expenses
Like most fathers, I want to be sure my kids are well taken care of and can afford a quality college education. For this reason, additional coverage is absolutely essential while my kids are still at home.
3. To Replace the Spouse’s IncomeIf my wife had passed away while the kids were young, I would’ve needed to replace her income, which was essential to our lifestyle. I also would’ve needed to hire help for domestic tasks we’d shared like cleaning the house, laundry, cooking, helping with schoolwork, and carting kids to doctor’s visits.
4. To Pay Off Debts
In addition to providing income to cover everyday living expenses, my family would need insurance to cover debts like the mortgage so they wouldn’t have to sell the house to stay solvent.
5. To Buy a Business Partner’s Shares
Since I’m involved in a business partnership, I need insurance on my partner’s life. The reason is so if he dies, I will have enough cash to buy his interest from his heirs and pay his share of the company’s obligations without having to sell the company itself. He has the same needs (due to the risk that I might die), and he simultaneously purchased insurance on my life.
6. To Pay Off Estate Taxes
Estate taxes can be steep, so having insurance in place to pay them is essential to avoid jeopardizing assets or funds built for retirement. Use of insurance for this purpose is most common in large estates, and uses permanent (rather than term) insurance to ensure that coverage remains until the end of life.

Final Word

Some people mistakenly believe that life insurance is a scam. This is due to the fact that the money for premiums is lost if death doesn’t occur during the coverage period (in the case of term insurance), or because many people live to a ripe old age and continue to pay their permanent insurance premiums. Such naysayers compare life insurance protection to gambling, and forgo the protection entirely.
Of course, there is no bet – you will die, but no one knows when. It could be today, tomorrow, or 50 years into the future, but it will happen eventually. Life insurance protects your heirs from the unknowable and helps them through an otherwise difficult time of loss.
Do you have life insurance? Why or why not?

Contact a Licensed Advisor today to discuss your Life Insurance Needs.


Micheal Lewis

Financial Planning helps in improving risk management, improve portfolio ROI, uses metrics to manage money, among other benefits.



To do or not to do- this is the dilemma we all face in many a situation. While there is a yes and no as an answer to every dilemma, when it comes to financial planning, we would tend to lean towards the 'yes' more than the 'no'. In fact, in today's world, we would consider financial planning to rank pretty high in Maslow’s Hierarchy, and is as critical as the safety and social needs. Other than the fact that financial planning helps in bringing about discipline and achieving financial security, there are a few other reasons as well as to why you should do financial planning. Here are such top reasons:

1.Improves risk management: Taking adequate life cover and health cover is critical. When you do financial planning, you can determine the amount of cover you need with greater certainty. Thus you do not overpay for unnecessary insurance and also do not end up with a lower than necessary cover.

2.Improvement in portfolio return on investment (ROI): Financial planning takes into account various aspects like risk management, investment planning, goal planning, liquidity management and liability management. You are able to design an integrated investment plan that takes into account goals, available liquidity and risk appetite, thus helps in improving your portfolio ROI.

3.Use the metrics approach to manage your money: When you undertake financial planning, you can measure specific milestones on what you have achieved. There is a science involved in managing money and financial planning helps you do this with higher efficiency.
4.Identify good and not so good areas: Financial planning helps you bring order to your finances by identifying what is right and not right for you. For example, you may be low on insurance cover or holding investments which are performing poorly. Financial planning helps you identify this and take corrective measures.

5.Reduce your cost of personal finance: When you undertake financial planning, you can cut down on many personal finance costs. A good example is by doing away with expensive ULIP policies or any investment which carries high charges.

6.Discipline in managing money: Financial planning brings in discipline. Also, there are subtle behavioural changes when you undergo financial planning. For example, when you run a systematic investment plan (SIP), your expenses are automatically curtailed and this goes towards investments. Similarly, when you do financial planning, you become aware if your lifestyle expenses are above or below what you can afford. If it is the former, you can take necessary steps to cut back on unnecessary expenses.

7. Measure and improve asset allocation: Asset allocation is a critical element of managing your money. There has to be a fine balance struck between managing risk and returns, and the right assets need to be chosen for the same. Financial planning helps in selecting the right asset allocation mix depending on your risk and return preferences.

8. Future visibility: Planning is for the future. While we have often heard quotes saying that you should live the present and not dwell on the past or worry about the future, when it comes to money, considering the future becomes very important. Financial planning helps you get visibility for next 15-20 years. You are able to get comfort on retirement and planning your money during emergency situations. This helps in achieving peace of mind and also helps you plan in case there is a gap.

9. Estate distribution: Will writing and estate planning is an integral part of financial planning. When you do financial planning you can plan your estate distribution after your time, such that disputes are avoided.

10. Professional approach: There is a professional approach in putting together a plan and tracking it. You can implement best practices with the help of your financial advisor. All this brings about greater order to your money management practices.

Financial planning is not difficult. It is easy and it pays off handsome returns over the long term.

Get a comprehensive financial plan today. It is absolutely free.

Contact Us.


Source: Moneycontrol.com


So, you found your dream home, negotiated a fair price which was accepted. You supplied all the needed documentation to your mortgage broker and you are waiting for the day that you go to the lawyer’s to sign the final paperwork and pick up the keys.
All of a sudden your broker or the lawyer calls to say that there’s a problem. How could this be? Everything has been signed and conditions have been removed. What many home buyers do not realize is that your financing approval is based on the information the lender was provided at the time of the application. If there have been any changes to your financial situation, the lender is within their rights to cancel your mortgage approval. There are 5 things that can make home financing go sideways.


1 Employment – You were working for ABC company as a clerk for 5 years making $50,000 a year and just before home possession you change jobs. The lender will now ask for proof that probation for this new job is waived and new job letters and pay stubs at the very least. If you change industries they will want to see more proof that you are capable of keeping this job.
If your new job involves overtime or bonuses of any kind that vary over time, they will ask for a 2 year average which you will not be able to provide.
Another item that could ruin your chances of getting the mortgage is if you decide to change from an employee to a self-employed contractor just before possession day. Even though you are in the same industry, your employment status has changed . This is a big deal killer.
2. Debt – A week or two before your possession date, the lender will obtain a copy of your credit report and look for any changes to your debt load. Your approval was based on how much you owed on that particular date. Buying a new car or items for the new home need to be postponed until after possession of your new home.
Don’t be fooled by “Do not pay for 12 months” sales campaigns. You now owe this money regardless of when the payments start. Don’t buy a new car and don’t buy furniture for the new home. This will increase your debt ratio and can nullify your financing.
3. Down payment source – And yet again I reiterate that the approval is based on the initial information you have provided. You will be asked at the lawyer’s office to verify the source of the down payment and if it is different than what the lender has approved, then you may be in trouble. For example, you said that you were going to save the funds and then at the last minute Mom and Dad offer you the funds as a gift. There’s no problem accepting the gift if the lender knows about it in advance and has included this in their risk assessment, but it can end a deal.
4. Credit – Don’t forget to make your regular credit card payments. If your credit score falls due to late payments, this can kill your financing. If you have a high ratio mortgage in place which required CMHC insurance, a lower credit score could mean a withdrawal of their insurance once again , killing the deal.
5-Identity Documents – This can be a deal killer at the lawyer’s office. The lawyer is required to verify your identity documents and see that they match the mortgage documents. Many Canadians use their middle names if they have the same name as their parent. Lots of new Canadians adopt a more Canadian sounding name for their day-to-day lives but their passports and other documents show another name.
Be sure to use your legal name when you apply for a mortgage to avoid this catastrophe . Finally, keep in touch with your mortgage professional right up to possession day. Make this a happy experience rather than a heartbreaking one.

David Cooke
Dominion Lending Centres - Accredited Mortgage Professional

8 great financial lessons I learned from my father

  • The Financial Industry Regulatory Authority Foundation estimates nearly two-thirds of Americans can't pass a basic financial literacy test.
  • Schools aren't instilling financial literacy along with ABCs and the three R's, but parents can educate kids about money.
  • Encourage hard work, saving and planning; teach kids about investing, budgets and giving; warn them about debt — and don't fix all their mistakes.
    My father emigrated from Taiwan in the 1960s with only $17 to his name and the clothes on his back. Though he was poor in a material and financial sense, he never considered himself poor. His mantra was that financial wealth alone does not represent one's "true wealth."
    My dad taught me not to define myself by how much I had, but by what I did with what I had. I learned early on not to let money be the sole determining factor for the decisions I made in life, but I also learned that, although money couldn't buy happiness, it could provide peace of mind, freedom and flexibility. I am thankful for the values my father instilled in me about "true wealth," but I am also grateful that he taught me about finances. My dad understood the importance of financial literacy and has left me a legacy that I am now passing on to my own three children.
    Financial literacy is having the knowledge necessary to manage personal finances efficiently. Financially literate people know how to achieve long-term goals and make healthy financial decisions.
    On the other hand, those who are not financially literate have difficulty applying financial decision-making skills to real-life situations. Not only do they tend to make unhealthy money decisions that create financial problems, they have trouble reaching financial milestones. In America today, financial illiteracy has become an epidemic. A study done by the Financial Industry Regulatory Authority Foundation estimated that nearly two-thirds of Americans can't pass a basic financial literacy test. That's a problem.
    Whereas basic literacy is a priority for public educators, financial literacy is not.
    Educators and pundits are still debating the part public schools and universities should play in promoting financial literacy — and clearly, it should be more than it is. Parents, however, do not have to wait to begin fostering financial independence in their children at home.
    Here are some things you can be doing right now to raise financially literate children.

    1. Teach your children to work hard. Children need to understand the correlation between work and earnings from a young age. If your kids are actually doing the work they're getting paid for, don't be apprehensive about paying them to work. Rewards motivate children, and money is an attractive reward. Allowing them to take on chores that they can get paid for not only teaches them the value of hard work but helps them learn how to manage their money. If they don't do their work, don't pay them.
    You can also cultivate their entrepreneurial spirit by encouraging them to offer babysitting, pet care and yard work or housecleaning services to friends, neighbors or relatives. Kids who work for pay can learn the cost in labor of an impulse buy without monumental consequences. They can also learn the satisfaction of working hard to build savings and achieve goals.
    Children who understand the value of hard work learn to be responsible for what they produce.
    2. Give your children vision. Financial planning is about defining your personal goals and creating a realistic plan to accomplish them. Discuss your family's financial objectives with your children and let them see what you do to achieve them. Encourage them to explore their own ambitions and aspirations for the future and set personal financial goals.
    Their plans and objectives can and probably will change, but learning to implement both long- and short-term goals allows them to taste success and enjoy the fruit of good planning.
    3. Help them learn to save. Helping your children learn the value of regular and disciplined savings is a gift. As soon as they are old enough to start filling up a piggy bank, they can begin saving. When the piggy bank is full, set up a savings account and let them manage their records so they can see how much they are saving over time. This will be a valuable lesson during their teen years, when they're tempted to spend savings meant for a car or college on food, clothing and friends.
    Children learn by doing. Help them create a workable budget that prioritizes savings but develops self-control. Then teach them to save regularly and systematically by establishing a timeline to reach specific goals. As they begin to experience the benefits of savings firsthand, they will start saving on their own.
    4. Talk to them about investing. Teaching your child the fundamentals of investing early is a worthy investment in their financial literacy. It does not need to be complicated. Even very young children can plant a seed and watch it grow over time. Board games that teach about money provide excellent opportunities to show children how investing works. Kids can also see how compound interest works with a compound-interest calculator, which allows them to calculate how much even a small investment now can yield in profits over time.
    You can introduce your kids to basic but important concepts such as inflation, interest rates and investing in companies they respect by merely talking with them about what's happening in the economy.
    5. Teach them to give. Children need to learn to share, because they need to learn their stuff isn't what's most important. Learning to give from what they earn not only teaches the value of generosity but helps them see that making money is not the most important thing in life.
    Organizations such as World Vision offer a gift-giving catalog that allows children to choose practical gifts such as chickens, goats and clean water for children and families in other parts of the world. Giving a portion of their allowance to the children's hospital collection in the checkout line or donating to the Salvation Army at Christmas provide opportunities for kids to discover what they value most and support it in tangible ways.
    6. Show them how to budget. Teach your children that no matter how hard they work, it's unlikely they will be able to save, invest or give without budgeting. Even young children can learn to budget by distributing their allowance in jars designated for long-term savings, short-term savings, giving and spending. Older children can transition into a more detailed envelope system and a written budget and eventually manage their budget through an app.
    Budgeting helps kids learn how to save for what they want and need without going into debt. The principles of budgeting can be taught from a young age and sustained as a child grows into adolescence and adulthood.
    7. Warn them about debt. We live in a consumer-driven culture. Even with a sound budget, debt can be hard to avoid. Children need to understand the costs and implications associated with debt so they can develop the self-control necessary to avoid bad debt and use good debt wisely. Satisfying your child's impulse by buying them what they want and justifying it by making them pay it back later is not teaching them to handle debt; it's encouraging impulse buying.
    Bad debt is anything that depreciates. Open credit card balances and car payments are bad debt. Traditionally, good debt is something that brings returns. Borrowing to finance a home or college degree has long been considered good debt, but times have changed. Americans currently owe more than $1.48 trillion in student-loan debt spread out over 44 million borrowers. We are just now beginning to recover from the sub-prime mortgage crisis that caused the 2008 financial crisis and subsequent Great Recession. Make sure your children understand that even good debt costs. Help them learn to count the cost and understand the obligations associated with debt.
    8. Don't solve their problems for them. Parents like to fix things for their kids. We don't like to see our children suffer. Unfortunately, alleviating the pain associated with bad financial decisions fosters financial ignorance, even if it's as simple as fronting the money to your 10-year-old to buy the latest video game after he nickeled-and-dimed away his allowance. Financially literate children understand that poor spending habits have consequences.

    Of course, to raise financially literate children, you need to endeavor to be financially literate yourself. Your willingness to raise your own financial IQ will not only set an example for your kids but will most likely improve your own financial situation.

    Marguerita Cheng
    CNBC contributor and CEO and cofounder of Blue Ocean Global Wealth

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