5 Benefits on How to Protect Your Mortgage With Life Insurance

For potential homebuyers and current homeowners, a home is a costly investment with a long-term commitment. That's why every homeowner carrying a mortgage needs to get life insurance. Life insurance that covers a mortgage is called mortgage life insurance or mortgage protection insurance. This kind of insurance is designed to protect the lender, just in case they are unable to pay for their monthly mortgage fees. In this article, let's highlight five benefits on how to protect your mortgage with life insurance.

1. May protect homeowners due to sudden unemployment

With Canada's unemployment rate fluctuating every year, sometimes homeowners might face unexpected job loss due to termination or disability. The benefit of having mortgage life insurance alleviates the stress and financial burden related to unemployment by covering the period when the homeowner is out of work. At Northwood Mortgage, we offer a series of mortgage life insurance options that target the specific time frame if a homeowner loses their job, falls ill, or becomes physically disabled, causing unemployment.

2. May protect homeowners due to unexpected death

If the homeowner dies, the mortgage life insurance will cover the remaining amount left on the mortgage. Along with unemployment, death in the family can cause financial strain, especially when the homeowner passes away. Mortgage life insurance is a great benefit because homeowners are assured that after death, the mortgage will not become their family's responsibility.

3. Mortgage life insurance frees up your budget

When it comes to having mortgage life insurance, homeowners can free up their budget by the funds they get from other insurance policies. For example, the funds received from a personal life insurance or employer benefits could be used for payments on other financial obligations such as car payments, other bills, and university tuition. What would usually go towards the mortgage can be spent wisely on other expenses because the homeowner has mortgage life insurance.

4. Mortgage life insurance is convenient

Another benefit that mortgage life insurance offers is convenience. By covering unemployment, death, and other bills, it is an added layer of security in case unexpected circumstances should occur. With all its benefits, it is also easy to qualify. To purchase a mortgage life insurance policy, homeowners do not require to submit to a life insurance medical exam. This is a very convenient benefit to have for sickly individuals. In case the homeowner is denied life insurance due to medical illness, the homeowner with mortgage life insurance is financially protected.

5.Mortgage life insurance accommodates new homebuyers

For potential first-time homebuyers who can only afford a small down payment, getting mortgage life insurance can secure the home of their dreams. They can use mortgage life insurance through the Canada Mortgage Housing Corporation, which requires a 5% downpayment.

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As you can see, choosing a mortgage insurance policy should be decided carefully. However, investing in mortgage insurance can safeguard you and your family's future in the long run.

At Northwood Mortgage, we have an expert staff of mortgage agents specializing in life insurance and mortgages in Toronto, Brampton, Mississauga, and the GTA. We take the time to listen to your needs, and we cater our services to each client.

If you would like more information on mortgage insurance coverage and protection in Toronto and the GTA, we invite you to book a FREE consultation with one of our Northwood Mortgage agents by calling 416-969-8130 ext. 111, toll-free at 888-492-3690, or contact us here. Once we receive your request, one of our mortgage agents will contact you within 24-48 hours to arrange an appointment.

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The Best Estate Planning Strategies for High Net Worth Investors

Estate planning is no small feat; in fact, for most individuals, it’s an ongoing process. Even with the guidance of a team of financial and tax advisors, estate planning experts, and specialists in life insurance, annuities, and other investment alternatives, you may be shocked to learn how much of your estate could be lost to taxes. Estate tax mitigation is a key element of estate planning, but in order to be effective in minimizing tax liability, it’s vital that you understand the criteria for imposing both estate and income taxes.


In 2017, the estate tax exemption was set at $5.49 million per individual and $10.98 million for married couples. Any assets over and above these sums will typically be subject to taxation, which can reach well over 50% or more if you include the impact of any possible state estate taxes. High net worth individuals with an estate valued above these thresholds must employ a number of strategies in order to maximize the transfer of wealth to heirs and charitable interests. The good news is that only two out of every 1,000 estates will be subject to federal estate taxes this year, which is largely attributable to the efforts of expert estate planning advisors who work with high net worth investors to minimize their estate tax liability.

So, how then can you develop a solid estate planning strategy as a high net worth investor? I routinely encourage our clients to consider the approaches described below. However, before taking any sort of action, be sure to discuss strategies with your financial advisor and estate planning team. This will ensure that you make the right move for your precise priorities and requirements.

Properly Titling Assets as a High Net Worth Estate Planning Strategy

A properly structured estate should provide ample access to assets needed while you are alive without compromising your overall estate and legacy plans. While certain assets may be directly owned by you or your spouse, it is wise to make certain that other assets are safely outside your estate for estate tax purposes. Some assets such as business interests and investment portfolios, and retirement accounts will require you to maintain direct control, while other assets such as life insurance may be outside of the estate in a properly structured trust.

Estate taxes can reduce the value of your estate by 50% or more, but these taxes apply only to assets owned directly by you. By ensuring that your assets are properly titled, you’ll be better equipped for the estate planning process.

Systematically and Strategically Reducing the Size of Your Estate

While it may seem counterintuitive, reducing the size of your estate could result in a larger transfer of wealth to your heirs as you may qualify for a lower tax bracket. An effective strategy will often include developing a plan that includes the creation of trusts, reallocation of assets to children, and qualified donations, all with the goal of helping you achieve the transfer of as much of your wealth as allowable.

Additionally, strategic gifting may also be beneficial as it entails distributing up to $15,000 per recipient each year—and it is free of taxation and does not reduce your estate/gift tax exemption. This can serve as an effective method for reducing the size of your estate in a tax-free manner.

Finally, it may be possible to pay for certain expenses for your heirs, such as college tuition, without being subject to gift taxes.This is another key area to explore with your accounting and financial team as well as your estate planning advisors.

Leveraging Qualified Charitable Donations as an Estate Planning Strategy

Another estate planning strategy is to take advantage of IRA Qualified Charitable Donations (QCDs). This serves to reduce the size of your estate while guaranteeing that your funds go to the intended recipient with minimal—if any—taxes due.

QCDs are available to IRA owners who are at least 70 ½ years old. The distribution must be paid directly to the non-profit organization. Married couples can each donate up to $100,000 per year from their own IRA, for a maximum gift of up to $200,000 per year, provided they maintain separate IRAs.

Using Trusts to Transfer Wealth from a High Net Worth Estate

Trusts often become a topic of discussion during the estate planning process, but trusts are not suitable for everyone—and not all trusts offer any substantial tax sheltering. This is because financial allocations to the beneficiary are typically considered taxable income unless properly structured.

That said, there are a number of types of trust, such as living trusts and irrevocable trusts, which serve different purposes and can be useful. Living trusts offer access to assets and offer maximum control while alive, while Irrevocable trusts seek to maximize tax exemptions on the wealth they’re passing along to heirs and charities. Therefore, it’s wise to work with your financial planner and estate planning consultants to determine which trust, if any,  may be beneficial for transferring wealth in your unique situation.

Life Insurance as an Estate Planning Tool for High Net Worth Individuals

Life insurance policies can serve as a very effective technique for conveying wealth to your loved ones—and even to charities. In fact, it’s often possible to secure a life insurance policy even later in life, imparting a greater tax-free sum to the beneficiary when you pass.


For instance, a sum of $80,000 could be used to secure a life insurance policy with a payout of up to $5 million (depending upon age and health, of course). Even when taxation on a life insurance policy is taken into account, the overall sum provided to the beneficiary would be greater than the amount of money that was paid into the policy. Life insurance should definitely be explored with an estate planning and life insurance expert if you are a high net worth individual looking for estate planning tools and investment alternatives.

Choosing the Right Estate Planning Advisor

If you are concerned about choosing a trusted advisor to work on your estate plan, you are not alone. A 2016 survey found that 53% of respondents reported challenges as they sought out the advice and guidance of an estate planning professional. To complicate matters further, many other consultants may have a role in your estate planning process as well, including your financial advisors, attorneys, CPAs, and life insurance advisors. Your individual goals are central to your estate plan; choosing an advisor that you feel can help you meet your unique objectives and overcome any challenges you may encounter is critical. In my many years of advising clients, I’ve found that while every client has their own story and their own goals, maximizing wealth transfer is typically their top priority.

source: howardkayeinsurance.com

For over 55 years, the professional team of advisors at Howard Kaye Insurance has been working with clients to achieve their estate planning goals using investment alternatives such as annuities and life insurance. Our experts have devised a number of effective strategies that serve to maximize the transfer of your wealth while simultaneously limiting and minimizing tax liability. This ensures that your loved ones and the charities that are close to your heart can enjoy the maximum benefit from your estate. Our advisors are ready to discuss your goals today, so contact our team by calling 1-800-DIE-RICH.

Buy Life Insurance with Social Security Benefits to Create a Retirement Nest Egg for Your Kids

Are you at or near the point of qualifying for Social Security benefits? If so, you may or may not need those payments to supplement your other income sources. For many of us, the focus becomes repositioning those payments to create a greater legacy for our kids or charity. We’ve dealt with this issue at length and below you’ll find a few ideas about how to handle this situation. 


Using Social Security to Buy Life Insurance

Let’s take Jim, a retired executive who has accumulated $15 million in assets over his lifetime. At 69 years old, Jim still has not turned on Social Security benefits because he knows they continue to increase each year that he waits. However, at 70 years old, the payments max out and there is no further benefit to waiting.

Jim’s plan is to turn on the roughly $40,000 of income and have it directly deposited into his checking account. In the process, he will withhold one-third of the payment to cover taxes that will be due on the income. Jim is trying to figure out the best way to leverage those payments into an eventual legacy, either for his kids or charity, and how to do so without increasing the size of his taxable estate.

We believe Jim should use his payments to buy a life insurance policy. Doing so will allow him to access some incredible advantages not offered through other vehicles. First, to prevent his Social Security payments from increasing the size of his estate, Jim decides to set up an irrevocable life insurance trust in which to purchase the policy. He decides to make his cousin the trustee and his two kids the beneficiaries. 

Given the roughly $25,000 that is left after paying taxes, Jim can purchase over $1 million of life insurance. As soon as he makes that first premium payment, the $1 million benefit is locked in. This strategy perfectly meets Jim’s desire to create a future nest egg for his kids without increasing the size of his estate. Plus, he can do so without taking on the market risk associated with stocks and bonds. 


Charitable Giving with Social Security Payments

Now, let’s suppose Jim wanted to use those payments to support his favorite charity instead. Rather than own the policy himself, he can $40,000 each year to the charity and have them use the money to buy a life insurance policy. Why would he do this? By donating the money, he can more than likely take a tax deduction for the full $40,000, part of which is the net amount of his Social Security income.

Also, by having the charity own the policy rather than himself, he is avoiding the death benefit being included in his estate: Nothing would upset Jim more than watching 40% of his gift slip away to unnecessary taxation. Also, because his premium is now $40,000 per year instead of $25,000, the face amount of his policy has jumped from $1 million to $1.5 million.  

When we compare the results of these strategies against the alternatives, it’s hard to rationalize a different move. If Jim just took his Social Security payments, paid the tax, and gave the proceeds to charity, he would likely give them somewhere between $300,000 and $600,000 in total depending on how long he lives. By using life insurance, he creates a $1.5 million gift, even if he dies in year one! 

If the charity is wise, they can choose to only spend the interest from that lump sum and create a gift that gives forever into perpetuity. Life insurance also provides a guaranteed death benefit, avoiding the volatility and uncertainty of market investments.   


The advisors at Howard Kaye can show you how to think differently about your estate plan. A fairly simple strategy such as the one illustrated above can change lives, just by taking an extra income stream and repurposing it for the benefit of your family or charity. Call 800-DIE-RICH to speak with us today and let us start crafting a similar plan for you.

source: howardkayeinsurance.com

Auto Insurance Quote Considerations

Learn more about the car insurance is the best way to make sure you have adequate coverage and that you are also getting the best deal possible . Continue reading to understand how various factors can impact your auto insurance quote.

Buying a used car is a good way to save money on your insurance premiums, since the older models are not as valuable. If you want to keep this car for years, you should get an insurance policy that will cover most of the damage. Because insurance on a used car is cheap, you should get a comprehensive policy. However, if you do not plan to keep your car for a long time or want to save money on your premiums, you should consider dropping some items on your policy, as aesthetic repairs.

A new car is not likely to break, which means you probably do not need your policy to cover towing and similar expenses trucks. If the new car is fully paid, you should protect your investment with an accident coverage policy that might happen. And if you are still making payments on your new car, the financial institution that you are using will probably have a set of guidelines on the type of insurance policy you need to start. Otherwise, select such a comprehensive policy as you can afford to make sure that you can continue to make the payments.

If you have a good driving record and does not present any complaints, you can benefit from interesting discounts. Each insurance company has different discounts. You need to contact your insurance agent and ask about good driver discounts. You may really want to think twice before submitting a request for very minor damage that you could pay for yourself, since you will not benefit from the discount more good driver.

Other drivers can use their car if they have insurance on their behalf or if you add them to your policy. It is usually cheaper to add someone to your policy to pay for individual coverage. Contact your insurance agent to find out how to add someone to your policy will cost you. You should know that if you add your children to your policy, you can usually qualify for a good student discount if they have good grades.

Protecting more than one vehicle with the same policy is a good way to save money. This is called package insurance, and insurance agents will encourage you to take additional policies in his other car, your motorcycle or even your home. Before getting a package plan, compare coverage and price you get the other options. package plans come with good discounts but do not get the coverage that you do not really need just because you can get it at a discounted price.

Learn as much as possible about the car insurance is the best way to make informed decisions. You should take the time to compare your options to request an auto insurance quote and go about your policy carefully to make sure you are getting the best coverage you can afford.

source: autoinsurancequotes2.info

Auto Insurance Quote for Teens

Children today want to be more independent and have more freedom. But as parents who find it difficult to let them go. Everyone wants the best for their children, as parents, we want to make sure that they are in good hands. When requesting several self insurance quote , we can better understand the coverage they need at a price we can afford. Make a list of the following important factors before signing the line where the insurance policy.

1. Driving history. Always explain to them how important a good driving history is. Your rate will always reflect this.

2. Set an example first, make sure that you follow all laws and teach them to do the same.

3. Saving is also the security is not logical to have your teen drive a Honda or a Volvo than a fast car and furious sports? Or a heavy SUV? Or a Mercedes-Benz or Porsche. The safest and cheapest car your teen or less power you have will equate to a lower premium.

4. A vehicle that has a history of accident damage will only increase your premium rates. Buying a vehicle has a clean title, make sure it is not a salvage title. How do you know? It’s easy, just ask for a Carfax.

5. Make sure the car your teen drives has all the safety features like air bags and anti-lock breaks. This will not only protect your child, it will also reduce your insurance rates.

6. Make sure your child does his homework. Teenagers who excel in school can sometimes get special discounts with certain insurance companies.

7. Increase your cover, you never know how many cars the teenager will bump into.

8. Lecture their children. This is not pleasant for your children, but they need to remember safe driving measures as always the seat belt, no texting while driving, limit the passengers in the car, etc. The less the cheapest accidents the self insurance .

9. Just like at home, there should be ground rules that the teen should follow while driving. Otherwise, if they do not follow them to reach the earth. Driving a vehicle is a level of maturity and it is meant to be taken seriously.

10. Get the most secure self quote as you can. The more the better, often insurance companies will increase their premiums if they see that you have been with them for a number of years.

As a parent, you are responsible for educating your teen about the responsibilities of driving a vehicle on the road. They are also responsible for their passengers and other drivers on the road. Make sure they realize the impact of being caught driving under the influence (DUI) for themselves and the lives of others as well. Just have a good insurance self is not enough to get them off the hook. We want to protect them not only today but tomorrow as well, following the above tips, we can ensure that they receive the best insurance policy for the lowest price possible.

source: autoinsurancequotes2.info

How Liability Insurance Can Protect You in a Slip and Fall Accident

Mortgage lenders require homeowners to purchase a home insurance policy and for good reason – standard insurance plans come with a range of coverage options that protect you in a variety of scenarios. One example of circumstances that benefit from the ownership of home insurance is a slip and fall accident.


If a neighbor, stranger or friend slips and falls on your property and holds you responsible, you have two financial safety nets through your homeowners insurance: personal liability protection and medical payments coverage. Which type of insurance protection will qualify you to file a claim is all dependent on whether there’s a lawsuit.

Personal liability coverage

 

Personal liability insurance protection is the part of your policy that covers you if the injured party decides to sue. Liability coverage will protect you during most instances when you’ve sued. Typically, your policy will allot you a minimum of $100,000 per claim for legal defense, although this amount varies from policy to policy.


Certain exclusions apply – liability won’t provide you any financial aid for lawsuits pertaining to mental, physical or sexual abuse; the sale, manufacturing or distribution of a controlled substance or the transmission of a communicable disease. In other words, criminal activity won’t qualify for defense money, but normal mishaps, such as a dog bite or your average slip and fall accident, will probably leave you eligible to file a claim.


If you feel like you’re at particular risk for lawsuit, you can always look into taking out an extension on your liability coverage, which typically starts at $100,000. Homeowners with large dogs or swimming pools can and should purchase greater liability coverage limits.

Medical payments coverage

 

Medical payments coverage, frequently referred to as MedPay, is the alternative to personal liability coverage if someone has experienced a slip and fall accident on your property. MedPay is the portion of your insurance policy that will qualify you for a claim if no lawsuit is filed. For example, if the mailman trips on your front steps but doesn’t want to sue, MedPay can help with his medical expenses. Policies typically start with $1,000 per injured person. You can also choose to purchase higher limits, if you like.


When it comes to slip-and-fall accidents, look to your homeowners insurance policy. Regardless of whether the injured party decides to sue, you have options. Your insurance can provide you financial aid for the person’s medical expenses or your legal defense if a lawsuit is filed. Alternatively, if you’re the person who fell but you don’t want to bankrupt the responsible party, recommend that he or she take a look at his or her home insurance policy. With adequate coverage, you’ll get the funds you need and the other person will be able to afford all your costs. Call a licensed insurance agent today to learn more about home insurance coverage. Ask about the types of protection typically included in a standard policy. You’ll find that you’ll likely receive coverage for things such as fire and theft but also for legal defense if you get sued.

source:  http://homeinsurance.com/blog/2013/01/04/how-liability-insurance-can-protect-you-in-a-slip-and-fall-accident/