Langlois Financial Services Inc.
Volume 1, Issue 5
LFS Report
Advisory Team
Mike Langlois CSA
President, Financial Security Advisor
Email Mike

Brian Langlois CFP
Financial Planner
Email Brian

Peggy Bates ACS
Administrative Manager
Email Peggy

Charmaine Langlois
Accounting and Marketing Manager
Email Charmaine
71 Rosedale Ave. West
Unit B-7
Brampton, Ontario
L6X 1K4
Phone: 905-456-2471
Fax: 905-459-5565
info@langloisfinancial.com

If you have any investment or financial planning questions, please ask us. We may even use your question as a topic for our upcoming issues.

Protect Yourself Not Your Lender

When most people apply for a mortgage they also purchase creditor insurance from their lender. While protecting your mortgage is very important, the creditor insurance offered by most institutions may not be the best solution. What you need to realize is that creditor insurance, or mortgage insurance, is nothing more than life insurance with strict limitations.
...More

Pension income credit for ineligible clients

The most recent federal budget announced an increase to the pension income credit from $1,000 to $2,000, so the potential tax savings for those who earn eligible pension income is even more appealing....More

How Long Will YOU Be Remembered?

           Have you ever heard of Abraham Lincoln?  How about Christopher Columbus?  Almost definitely the answer is yes, and you could probably list a few things they did in their lives.  Now what is the name of your great-great grandfather and what is something he accomplished?   If you are like most people you can’t answer those two questions.  The sad reality is most of us are going to be forgotten at some point in the future.  Whether it is 50 years from now or 100 years from now, eventually the people who know us will be gone and the stories that are told about us will become fewer and fewer....More

Protect Yourself Not Your Lender

Brian Langlois CFP
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When most people apply for a mortgage they also purchase creditor insurance from their lender. While protecting your mortgage is very important, the creditor insurance offered by most institutions may not be the best solution. What you need to realize is that creditor insurance, or mortgage insurance, is nothing more than life insurance with strict limitations.
 
One of the key issues when it comes to mortgage life insurance is flexibility and control. Generally speaking, with creditor insurance your lender owns the policy. If you find a better mortgage rate at another lending institution you may have to re-qualify medically for the life insurance. Your mortgage life insurance cannot be transferred to another institution. If you die your lender automatically pays off the mortgage. Your beneficiary has no choice about how to use the funds. Also, if you make additional payments to your mortgage, your mortgage life insurance coverage decreases. So the harder you work to pay off your mortgage the faster your mortgage life insurance decreases.
 
The lack of control and ability to customize your coverage to suit your situation is another limitation of creditor insurance. Most mortgage life insurance is non-convertible term insurance. There are no cash values, no premium flexibility, and no ability to move to a permanent life insurance policy if your needs change. Since it covers the exact amount of your mortgage you have no coverage when the mortgage is paid off. Mortgage life insurance may leave you fewer options if your health changes or you become uninsurable. Your options for renewing or re-mortgaging with another lending institution may be restricted in order to retain your mortgage life insurance. Finally because the cost per thousand of coverage generally increases every year, costs may increase while coverage decreases.
 
Luckily there are other options. With personal life insurance you own the policy, not your lender. You can choose a personal life insurance policy that will better meet your family’s needs in the event of your death; including, but not limited to, their ability to continue living in their own home. Your beneficiaries decide how to use the funds; pay off the mortgage, provide a monthly income or take care of a more immediate need. It’s their choice, not your lender’s.
 
Personal life insurance allows you to switch your mortgage to another lending institution without jeopardizing your life insurance coverage. And you can feel free to make those extra mortgage payments, because your coverage is not reduced by a decline in your mortgage balance.
 
Personal life insurance is all about customization and control:
 
  •            You select the plan that meets your financial security goals. 
 
  •            Many term life insurance products are fully convertible to permanent policies. Because of this option, if your health changes and you find it difficult to get life insurance, you can keep the full death benefit and convert your insurance to one of the permanent insurance policies available at that time, without having to re-qualify medically. 
 
  •            You can choose the amount of coverage you need and it only reduces if you choose to reduce it. You don’t automatically lose your coverage because you paid off your mortgage. 
  •             Since you are the owner and you name the beneficiaries there are no restrictions on your options for re-mortgaging with a different lending institution if your health changes. Wherever you go, your coverage goes. 
 
           With the vast array of personal insurance products available, you are sure to find one that suits your needs with premiums that fit your budget. 
 
When protecting your mortgage with insurance be sure to consider all of your options.. Contact the professionals at Langlois Financial Services Inc. to help find the right coverage for you.

Pension income credit for ineligible clients

Mike Langlois CSA
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Pension income credit – Are you taking advantage?

 

The most recent federal budget announced an increase to the pension income credit from $1,000 to $2,000, so the potential tax savings for those who earn eligible pension income is even more appealing.

 

What is eligible pension income?

 

There are a number of plans and products that are eligible for the pension income credit. Eligibility also depends on your age. If you are 65 or older for the entire year, then eligible income includes:

 

  • Income from a pension fund
  • Payout annuity income out of a registered retirement savings plan (RRSP) or a deferred profit sharing plan (DPSP)
  • Income from a registered retirement income fund (RRIF)
  • Interest from a prescribed non-registered payout annuity
  • Income from foreign pensions
  • Interest from a non-registered guaranteed investment offered by a life insurance company

 

If you are younger than 65 for the entire year, eligible pension income includes:

 

  • Income from a pension plan
  • Payout annuity income arising from the death of your spouse under an RRSP, RRIF or DPSP

 

Income from the Canada Pension Plan of the Quebec Pension Plan is not eligible for the pension income credit. How else can you become eligible for the income credit?

 

Retirement income from a guaranteed investment certificate (GIC) held at a bank does not qualify for the pension income credit. However, holding a similar guaranteed investment through an insurance company is eligible for the tax credit. So purchasing a product that is eligible and offers similar benefits can make the income eligible for the tax credit.

 

Another option is to roll a small amount of an RRSP into a RRIF, taking the minimum monthly payment as income. Then, if you also meet the age requirement, the income received would be eligible for the credit.

 

To find out more about this and other tax savings strategies, contact a financial advisor at Langlois Financial Services Inc.

 

 

 

 

 

 

The information provided is accurate to the best of our knowledge as of the date of publication, but rules and interpretations may change. This information is general in nature, and is intended for educational purposes only. For specific situations you should consult the appropriate legal, accounting or tax expert.

How Long Will YOU Be Remembered?

Brian Langlois CFP
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          Have you ever heard of Abraham Lincoln?  How about Christopher Columbus?  Almost definitely the answer is yes, and you could probably list a few things they did in their lives.  Now what is the name of your great-great grandfather and what is something he accomplished?   If you are like most people you can’t answer those two questions.  The sad reality is most of us are going to be forgotten at some point in the future.  Whether it is 50 years from now or 100 years from now, eventually the people who know us will be gone and the stories that are told about us will become fewer and fewer.

                                            

          Many people have setup up charitable foundations that will continue to give to charities they believe in long after they are gone, ensuring they will be remembered forever.  Unfortunately this has always been a very expensive proposition which most people were unable to afford.  Quadrus Investment Services Inc. has recently developed a program that makes this a more realistic possibility for many people.  In their innovative Legacy program you can create a charitable account such as the John Doe Charitable Foundation without the costly setup expenses.  You would receive a tax receipt for the entire amount of your donation to setup the account, and would retain control of the assets in the plan.  Every year following the year of donation, the account would pay a grant to the charity or charities of your choice.  The plan is arranged to continue giving perpetually, so long after John Doe is gone, his charity of choice will continue to receive donations from the John Doe Charitable Foundation.

 

          No this program won’t make you the president of the United States or help you to discover a new country, but it will ensure your memory lives on forever.  This is just a brief outline of how the Legacy program works, for more details contact one of the professionals at Langlois Financial Services Inc.