Life Insurance & Business Succession

Life Insurance & Business Succession

by BusinessFinancialFinancial PlanningRisk ManagementUncategorised

Having a life insurance policy in place is one of the best ways to ensure your family’s financial well-being after you pass. However, it may not be only family members that require financial support in your absence. If you are a small business owner, you should strongly consider taking a policy out on yourself that will act as part of your succession plan. Below are two examples of how having a life insurance policy specifically designated to the succession of your business can be used to benefit those you leave behind.

Estate Taxes

Much thought is put into estate planning on a personal level, but if you are a small business owner, it’s important to predict the business estate taxes to be paid upon your death. Discussions with a financial advisor will help you through this process as there are many factors involved in determining how much of the business will be taxable when the business owner dies. If the business was financially successful, there could be a large tax bill requiring payment as part of the estate settlement. This is when a specifically designated life insurance policy can really save your successor. Designate in your Will what each insurance policy you hold is to be applied against to ensure no confusion if you happen to meet an untimely death.

Replacement of Talent

In a small business situation, the business owner often plays a vital role in the day-to-day operations of the company. If the owner was there at the inception of the business and has spent years mastering the business, it will not be an easy feat to replace that person if they should die unexpectedly. People can pass away without notice, and if the survival of their company depends on their specific job being done, then existing staff may need to seek outside help. Having a life insurance policy on the business owner who carries the business is a useful tool for hiring a replacement. Likely someone with the expertise to successfully run a company will come at a higher salary, and having the financial means accessible to fund that salary could mean the difference between the company sinking or the company continuing to thrive.

Life insurance policies are important to have to ensure your family is cared for after your death. However it’s imperative that you also remember to protect your company against financial ruin after your death. Be certain to have enough life insurance in place to cover any expenses associated with your passing. We would be happy to provide you with further information about securing your legacy.

How to Kickstart Your Retirement Savings Goal

How to Kickstart Your Retirement Savings Goal

by Uncategorised

Planning for your retirement comes with its fair share of concerns. With people living longer and longer, how much do you need to save so you don’t run out of money? Will the volatile markets work in your favour and help you grow your savings? How can you contribute to your retirement savings to offset these two concerns?

Not everyone has the flexibility or risk tolerance to shift to higher yielding yet more volatile investments. The safer option is trying to save more each paycheque in order to increase the amount you are saving. If you are open to putting more of your hard-earned money into savings, or if you are okay with slightly compromising your current lifestyle in order to boost your retirement, we have two approaches you should consider:

Pay Yourself First

A great way to save is taking an approach where you pay yourself first. You need to figure out the amount of money you need to save from each paycheque in order to reach your retirement savings goals. The idea behind this is for you to put your desired amount in an investment account before you spend any money on the rest of your budget. It’s an automated way to increase your retirement fund. When budgeting, you should consider this retirement savings amount as another required payment and work around it. You can consider adjusting the amount you save if other investment goals, like education savings for your children, become a new priority.

Analyze your Budget

It helps to think of budgeting in a positive sense rather than a negative. It’s not so much about restricting your lifestyle; it’s about giving you the ability to achieve long-term goals. You can analyze each of your monthly expenses and try to think of ideas as to how you can reduce or remove some costs. This will allow you to direct extra money towards your retirement savings. This could be as simple as bundling your phone, TV, and internet services or delaying the purchase of a new car for another year. You can track the money you are saving and direct it towards your retirement while watching it grow.

A financial advisor at The Beacon Group of Assante Financial Management Ltd. can help you review your current budget and savings plans, and help support and meet all of your financial objectives.

financial adviser calgary

Why Group Benefits May Put Your Family’s Security at Risk

by Uncategorised

In 2013, 37% of Canadian families relied on group life insurance without any supplementary life insurance.[1] Group life insurance is an economical and convenient solution, but many families rely solely upon it and we don’t believe it offers enough to meet all of your family’s needs. Here is why we believe you should supplement your group plan with more protection.

Group coverage is not comprehensive coverage

The most important factor to consider when it comes to life insurance is the amount of protection it offers. The coverage amount through group plans is usually linked to your annual salary. Typically it is one to three times that amount. This is not enough money to help your family maintain its standard of living and the cost of future expenses like university education for your kids. Permanent life insurance allows you to set the amount of coverage you believe your family needs.

Permanent life insurance is true to its name

 Group plans offer term life insurance, which is only temporary coverage that expires when you are no longer an employee. If you decide to leave your job and start your own business, you will lose your coverage in an instant. Permanent life insurance can last a lifetime and isn’t linked to an employer, only to you and your estate.

Reasons to get permanent coverage

Permanent life insurance may be used to serve multiple purposes. Every person has their own unique situation, but we believe everyone can benefit from life insurance in some way. For example, it can be used to create an estate for your beneficiaries to receive upon your death. You can use it to pay for your final expenses, like funeral costs or outstanding debts. It can used to preserve your estates value by offsetting your tax liabilities, like capital gains. You can even use a portion of your coverage as a donation to a cause that is dear to your heart.

Have a financial advisor help you find the right coverage

 If you are in one of the 37% of households that rely solely on group coverage, you should talk to a financial advisor at The Beacon Group of Assante Financial Management, Ltd. Your financial advisor can conduct a thorough insurance needs analysis and advise you if you have the coverage you need. They can also go over your current group coverage to make sure you have appropriate disability and critical illness coverage.

Greg Snider provides insurance products and services through Lifetime Financial Planning Inc. in the province of Alberta. Wayne Hill provides insurance products and services through Assante Estate and Insurance Services Inc. in the province of Alberta. Cory Gagnon provides insurance products and services through Lifetime Financial Planning Inc. in the province of Alberta, and through Assante Estate and Insurance Services Inc. in the province of British Columbia. Lifetime Financial Planning Inc. is an outside business activity that may offer non-securities-related financial planning services. Any specific investment recommendations provided by Greg, Wayne, or Cory must be done through Assante Financial Management Ltd. (“Assante”), a registered mutual fund dealer. Although Assante is not responsible for any service or product supplied through Lifetime Financial Planning Inc., Assante will monitor for conflicts of interest and investigate any client complaints related to services offered by Lifetime Financial Planning Inc.

[1] LIMRA, Canadian Insurance Ownership Survey, 2013.