Finance / Insurance Archives - PinkPlayMags

Four Tips For LGBTQ Couples Who Are Investing Together

Peter Minkoff — Fri, 09 Sep 2022 12:24:15 +0000

Every commitment a couple decides to make together can be hard, especially a financial one. It becomes a whole new partnership for those two people, which takes patience, trust, being ready to take risks, and reevaluating priorities, values and goals. However, if it is done right, it can be very rewarding.

When that couple is also a part of the LGBTQ+ community, things get a bit more complex. There are different factors that also play a role, many of them coming from outside sources such as the law situation in their country, the community they live in, families, etc. This is why, according to one survey, only 43% of LGBTQ+ couples are feeling at ease with their financial future.

Nevertheless, there are ways to overcome all the obstacles, if the will is strong enough. In this article, we will talk about some of the moves you can make; hopefully, it will put you on the right path.

Set your mutual goals

When you have your goals specified, you are well on your way. This takes a lot of talking, then putting thoughts to paper, which turn into plans, which leads you to making a financial plan and steps to making it the best couple partnership there is.

Thinking over a mutual financial plan is key. First, decide on a minimum amount you two can handle investing. Go from there. Then the maximum. If possible, apply for a mutual loan, although it is difficult in countries where same-sex marriages are still not possible. If not, then make an agreement on who will apply.

Once you have your financial plan settled, move on to your goal.

Pick the best place to invest

If you have your investment goal settled, seek the right location and social circumstances.

Let’s say you want to invest in real estate as a couple. This is always a sure thing if you have the money ready. Take your time. Research the locations you both like. Europe is always good for buying houses in tourist cities. This way, you have a great place to rent out or maybe retire and live there eventually.

Since the Mediterranean area is loved by so many LGBTQ community members, try a place not completely exploited. For example, Montenegro is still growing tourist-wise. With good real estate there, you can eventually earn high. Try renting first. There are lots of properties in Montenegro which you can turn into something amazing for you two or for curious tourists, exploring this fresh territory.

If, for some reason, this is not your thing, try investing in a fleet of vehicles, which is also a great opportunity to make a big profit. Day-to-day rentals, company long-term rentals, party vehicles – the list is endless.

Anything you set your mind to is okay, just research the location and demographics, and the investment is solid.

Always have a backup plan

Every investment has to have a backup, insurance or at least some savings put aside, in case the plan flops. Not only that, an LGBTQ+ couple usually faces prejudice and man-made obstacles, especially in countries that had not yet completely accepted their LGBTQ+ community.

Have at least some money saved for rainy days. Find good insurance for every business you start or house you buy, with reliable insurance companies. Besides that, try to avoid every area that is known for prejudice and homophobia; you certainly don’t need that while starting your new business journey.

Think of retirement savings

According to some research, only 20% of LGBTQ+ people can rely on their family and/or friends after they have come out. The percentage of LGBTQ+ people that can do that in their old age is usually, unfortunately, not higher than that. Therefore, until same-sex marriage is normal everywhere, that kind of couple can experience problems when it comes to old age, retirement, illness, or death.

Seek advice from your lawyer and financial advisors. See that you save into a private fund, of which you are both beneficiaries. Save for private caretakers. See that both of you have written each other in a will.

Every couple has their ups and downs, business-wise or not. So, trust is what you need the most, as well as the will to make it together. When you have that, you are well on your way to success.

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Give your children a holiday gift that will last a lifetime

Karl Marshall — Tue, 01 Dec 2015 18:44:13 +0000

Many Canadian parents save in an RESP for the purpose of funding their children’s post-secondary education. The federal government will contribute up to a maximum $7,200 towards each child’s post-secondary education provided you save $36,000, making the total available $43,200 (assuming your investment doesn’t lose any money and/or growth remains flat).

Like an RRSP or TFSA, an RESP is simply a vehicle that holds investments and not an investment in itself. Growth really depends on what happens with the underlying investments.

According to a recent BMO study, the cost of a 4 year undergraduate degree will rise to $140,000 for a child born in 2012, so the following questions arise:

Can you predict what the actual cost of post-secondary education will be 17 or 20 years down the road?
Will saving in an RESP alone be sufficient to fund your child’s post-secondary education?

The answers are a most likely a resounding “NO” and I would like to suggest that the real reason that all Canadians want their children / grandchildren to go to college or university is to set them up for financial success. An education is therefore (among other things) a tool for providing financial success and stability.

Parents should be concerned about making smart money decisions (which certainly should include saving in an RESP) for their children today, that will set them up for financial success tomorrow. In fact smart money decisions today will take care of many concerns including funding post-secondary education, and with the rising cost of post-secondary education, it is unlikely that RESPs alone will not get the job done.

We recently helped one of our clients use an insurance policy to secure the following for her son:

Guaranteed permanent insurance coverage
Guaranteed total she will pay into the policy for 20 years (no payments after 20 years) – $22,020
Guaranteed cash values over child’s lifetime – $100,000
Potential dividends of approximately $35,000 that can be withdrawn at age 30, and still have in force guaranteed life insurance coverage and cash values.
Potential legacy for her son’s children if he allows dividends to accumulate; and assuming the dividend scale remains the same – up to $1.6 million

Our client in the above scenario actually asked us for this specific financial product (pays dividends) because her parents were astute enough to use this very strategy when she was younger to help set her up for financial success. She withdrew the dividends to put toward the deposit on her home, and she still has life insurance in force that she can leave for her son when she retires. Plus her cash values are guaranteed and continues to grow.

In fact, this client is actually using some of funds that were set aside for her to set up her child for financial success.

Life insurance on children is not about the morbid thought of death, but rather about providing them with a financial gift that will last their lifetime.

This holiday season, deflate the elephant in the room, and give the ones you love a financial gift that will last for their lifetime

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Transfer wealth to your family and not the government

Karl Marshall — Sun, 18 Oct 2015 16:56:21 +0000

When someone passes away, their estate is subject to a process known as probate, and you may have heard this phrase “The will has to go through Probate” before the assets in someone’s estate can be distributed to beneficiaries.

What is probate? Probate is a legal process that confirms an executor’s authority to distribute assets of a deceased person’s estate. An estate is in simple terms, whatever they owned including real estate, bank accounts and personal effects. There are some assets that are excluded from probate, including Canada Pension Plan (CPP) death benefits, jointly owned assets with a right of survivorship RRSPs, RRIFs, TFSAs with a named beneficiary other than Estate, and insurance proceeds paid to a named beneficiary.

The Government of Ontario charges a probate fee which is a percentage of the entire estate, which means that probate is one of the factors that will reduce the amount of money that beneficiaries receive. Taxes payable upon death will also reduce the net value of the estate to be distributed to beneficiaries.

What does it mean for you and your loved ones? It means that we should be arranging our affairs in such a manner that will allow us to legally minimize probate fees and taxes upon death so that our intended bequests to our loved ones actually end up in their hands. Insurance products by their very nature are designed to allow the owner to name a beneficiary and pass the proceeds directly to a named beneficiary, bypassing probate and taxes. GICs, non-registered investments and mutual funds that you, your parents or grandparents have in banks will likely become part of the estate and subject to probate fees.

GICs, and other investments sold by insurance companies are creditor protected, pass to a named beneficiary tax free and bypass probate. GICs and non-registered investments/accounts offered by chartered banks typically do not provide any creditor protection, and will become part of your estate when you pass away. This means that these funds will form part of your total estate upon death, and be subject to probate, and the probate fees are based on the total value of your estate, and not just the value of the money you have sitting in an account at the time of death.

If you could legally pay less taxes and fees and put more money in the hands of your loved ones why wouldn’t you? The difference between families that transfer wealth in a tax efficient manner, and those who don’t. often lies in the quality of the estate planning. Unfortunately banks won’t advise you to hold some of your money in an insurance investment because they will lose business, however I have friends who are bankers who hold some of their investments in insurance products because they understand the effects probate fees can have on their families.

Deflate the elephant in the room, act today to ensure that you transfer your wealth to your family and not the government.

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Should you hire an invisible employee?

Karl Marshall — Thu, 13 Aug 2015 13:26:38 +0000

If you run your own business, it makes sense to hire an invisible employee who is always unseen, never comes in late, never calls in sick, never adds to your statutory deductions, will never cost you a dime in severance payments, and will repay you dollar in salary they received if you decide to terminate their employment.

Sounds like a pipe dream doesn’t it? Well it is not a pipe dream, it is very real and many Canadians (myself included) have already hired an invisible employee. Sadly too many us, including many self-employed Canadians have neglected to do so.

The invisible employee I am alluding to is critical illness protection, which in simple terms is insurance that is designed to pay you a tax free lump sum when you are alive and need money, upon diagnosis of a covered illness. Life insurance pays a death benefit to your family when you pass away, critical illness insurance is all about taking care of you when you are alive. Nobody plans to get sick, and money is the last thing you want to worry about when cancer, heart attack, stroke or other life threatening conditions strike. If you remain healthy and never have a claim then you can get ALL of your money back.

If you are self-employed and your income depends on your being physically able to work, then this protection becomes even more crucial to your financial well-being. If you suffered a heart attack or received a cancer diagnosis, and had a $1 million life insurance policy, that money is a figment of your imagination as long as you are alive. It makes sense even if you are not self employed, as many benefit plans don’t offer the value that an invisible employee brings to the table

Our medical care has improved and the survival rates for many serious medical conditions have improved significantly over the years, so the question is how will you survive financially, pay all your bills and maintain your lifestyle while you recover and are unable to generate an income? The answer (assuming you don’t have a lot of cash sitting in your bank account or under a mattress) lies in ensuring that you hire an invisible employee that will pay you a tax free lump sum of up to $2 million if you get seriously ill, or refund all your money.

Deflate the elephant in the room and hire an invisible employee today. It’s one of the best financial decisions you will ever make for yourself, your business and your family

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Like a good scout, be prepared

Karl Marshall — Thu, 09 Jul 2015 15:07:05 +0000

The rationale for purchasing life insurance is pretty simple and obvious. You want to make sure that in the event of your premature death your family won’t be saddled with debt or struggle financially.

The gap that exists in the financial plan of many families in Canada (quite sadly) is the absence of critical illness insurance; and this is primarily as a result of many Canadians not being aware of its availability, the flawed perception that it is expensive, and of course the “nothing will happen to me” syndrome.

What is critical illness insurance? It is an insurance product that came into existence as a result of the efforts of a medical doctor in South Africa (not an insurance company) in 1983. His motivation came from the financial hardships experienced by patients affected by critical illnesses such as cancer, heart attack and stroke.

Critical illness insurance pays a tax free lump sum while you are alive, and this money can be used any way you wish, including making sure that there is money to cover day-to-day expenses while you are off work. If you are self employed you can risk financial ruin, especially if your full income is generated like this.

A critical illness insurance policy will not only ensure that there is tax-free cash to cover expenses such as your mortgage, rent, car payments, groceries etc, but will also provide cash to cover drugs and treatments that are not covered by OHIP, plus expenses that may come up like parking at the hospital, or out of country travel for treatment. The last thing you want to worry about in the event you are diagnosed with a life threatening condition such as cancer, heart attack or stroke, is money.

I advise my clients to also ensure that their children are also covered, because not only are childhood illnesses such as cancer, cystic fibrosis and autism rampant in Canada, but many policies provide coverage for life, and have a refund of premium option (adult policies also have this feature) if your children remain healthy and never have a claim. The refund of premium can be used to top up the money you have saved in their RESP (Registered Education Savings Plan). Your policy can literally be a forced savings plan.

Critical illness insurance will also protect your retirement savings, as many Canadians tend to deplete their savings when a life threatening illness strikes.

Deflate the Elephant and be prepared in the event the unexpected becomes reality.

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LGBT Couples need to get “A Round Tuit” too

Karl Marshall — Fri, 15 May 2015 20:00:43 +0000

Most of us are well intentioned hard working Canadians. We go to work or run our businesses with vim and vigor, and we want to provide for our families and create a bright and prosperous future.

The future is created by the actions we take today, and unfortunately too many of us take the attitude of “I will get around to it” regarding the very things that are absolutely critical in helping us reach our goals. Recently I made a casual visit (as I often do) to one of my clients, and she had a nice plaque that she picked up while on vacation in her living room titled “A Round Tuit”

Putting off getting “A Round Tuit” is like saying to a thief “I am okay with you robbing me of all that matters because I am not going to call the police. In fact make multiple visits and take all you want”

Your spouse and yourself know that you need to sit down with a lawyer and put a will and power of attorney in place, but tell yourselves that you will get a round to it, and never do. Members of the LGBTQ community have fought hard to secure the rights and freedoms that you hold dear, don’t wait until tragedy strikes before you get around to it. You know that you need to save for retirement, but money may be so tight now, and you will get around to it with when things improve financially, which might not happen.

Twenty, thirty or forty years from now, you may be staring down the barrel of sickness, financial destitution, and risk losing the very things you dedicated your life working for because you never got around to it. You know the potential devastation that sickness, injury or death can inflict on your family. You don’t have any or enough life insurance, critical illness, disability insurance, or savings in place. It’s even more devastating for the self-employed who have no benefits or pension plan, but you will get around to it.

I have seen, and I am sure you have as well, the negative consequences that ensue when people fail to get around to it regarding matters that are of fundamental importance, which is why it’s time to deflate the elephant in the room and get “A ROUND TUIT” today!

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Charity begins at home

Karl Marshall — Thu, 02 Apr 2015 13:45:48 +0000

When I am not busy protecting families with Life & Critical Illness insurance, I host a radio show on a Toronto radio station every Saturday night, and last week I played a song that got me thinking about what I do every day and why. The punch line to the song is “You’ve got to show me love”

Everyone has likely heard the phrase “Charity begins at home”, and the word charity is usually associated with giving. There are a plethora of charities in Canada that raise millions if not billions of dollars every year for very noble causes, and I applaud and support the efforts of these organizations that serve our society.

Recent tragic and heartbreaking events involving the deaths of children have resulted in an outpouring of emotional and financial support for their families. Trust funds have been set up to provide financial assistance to families that have lost their breadwinner, yet another example of the charitable hearts of Canadians.

Charity doesn’t merely mean giving, it also means “Love”, therefore the nice catchy phrase “Charity begins at home” means love begins at home. What does this have to do with what I do every day? Everyone I speak to tells me that their family is number one on their scale of priorities, they love their families and their family is the reason they get out of bed every day and go to work. Everybody needs money, and this is exactly what life insurance is – MONEY

LGBT families that are left destitute as a result of sickness or death of a family member, are in that position partly because someone who “loved” them did not show them love, or felt they couldn’t qualify for life insurance because of a medical issue ,which is totally false. It is more likely because someone in my profession suffered from Shame of Selling (SOS) Life Insurance, a saying I borrowed from a stalwart in the insurance business. There is absolutely no shame in showing up and presenting a substantial cheque to a grieving spouse who lost their partner, or presenting a tax free lump sum cheque to someone who got diagnosed with cancer, making getting better the only thing they need to focus on. Each time I do that it means I helped another LGBT family make the words “Charity begins at home” meaningful.

Have you shown love to the ones you love ,including yourself? Do you have any life insurance? Do you have enough coverage? Has your agent reviewed your policies with you lately to ensure that they still suit your situation? If your answer to any of these questions is no then it’s time to deflate the elephant in the room, get a firm grasp of the meaning of the phrase “Charity begins at home”, and show love to your partner by speaking with a licensed life insurance agent or broker.

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Tax sheltering your investments using life insurance

Karl Marshall — Wed, 11 Mar 2015 14:28:16 +0000

If you have maxed out your RRSPs and used up all of your TFSA room, there are other options available which will allow you to continue to invest your money tax deferred. Most people think the only purpose life insurance serves is providing a tax free lump sum to their loved ones in the event they pass away prematurely, however, there are life insurance products that can be used as an investment vehicle. This does not take away from the primary purpose of purchasing life insurance, which is to provide a death benefit and protect the ones you love.

Life insurance is one of the best kept secrets with respect to the availability of an investment vehicle that can be used to accumulate wealth in a tax deferred environment, and it is a secret because many investors are unaware of the existence of life insurance policies that can help them accomplish their goal of enjoying tax deferred growth. If you have mutual funds, the growth in those funds are subject to capital gains taxes and have to be reported to the CRA as income annually.

How can you use life insurance to tax shelter your investments? It’s really quite simple actually! Purchase a permanent life insurance policy (Universal Life) that also allows you to deposit money into it. You can select the funds that you wish your money to be invested in, just like you would in a mutual fund, and the money in your policy grows tax-deferred. Of course this is subject to the CRA Exemption Test Rules which sets out the amount of savings that can grow tax deferred in a life insurance policy.

Another advantage of using life insurance to tax shelter your investments is that in addition to the death benefit flowing to your beneficiaries’ tax-free, the accumulated growths will also flow to your beneficiaries tax-free. If you are maximizing your RRSPs and TFSA and need another vehicle to grow your money tax deferred, maybe it’s time to consider using life insurance to help you accomplish your goals. There are limits to the amount of money that you can put into this plan for the policy to retain the tax exempt status, and there is legislation on the horizon. New rules are likely to take effect by 2017 to further limit the amount of money that can grow tax deferred in a universal life policy, so the time to act is now.

Burying your head in the sand and not exploring your options is the elephant in the room. Tap into the tools available to you that can make a significant contribution to your financial fitness.

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Is your most precious asset protected?

Karl Marshall — Sun, 15 Feb 2015 19:28:38 +0000

Nobody wants to think about becoming disabled but it happens. Most people I have spoken to in my over 20 years working in the insurance industry were concerned about losing their job, having enough money in retirement, loss or damage to their home or vehicle, yet not giving a second thought to what would happen if they couldn’t work and their pay cheques stopped coming in.

If you have acquired assets, chances are your income is the reason you enjoy your current lifestyle, but what if you became disabled today? Would your income be significantly reduced, or worse, disappear altogether? How would you pay your for things like your mortgage, children’s education, trips to a warm place in the winter, or the basic necessities of everyday life? Would CPP provide enough to replace your income?

You may be reading this and saying well “nothing will happen to me”, however your fellow Canadians who have lost their homes and have had their lives turned upside down as a result of an unexpected injury or sickness probably said the same thing. You may be thinking well “I don’t earn that much anyway”, however if you are age 35 and earning $75,000 per year, your income earning potential over the next 30 years is at a minimum $2,250,000 and your ability to earn is your most precious asset – Is it protected?

In Canada, there is a one in three chance of becoming disabled for 90 days or longer at least once before age 65. Disability is real and its effects can be financially devastating, and not only can disability cause you to deplete your savings, it can also plunge you into debt. The last thing you need to worry about if you are disabled and can’t work, is money.

Disability insurance provides you with a monthly cheque in the event you become disabled or seriously ill and can’t work, and is designed to replace a portion of your income. There are policies that will ensure that as long as you are disabled and can’t perform the duties of your own or regular occupation, you will receive a monthly cheque up to age 65. If you don’t become disabled you can get part or all of your money back at age 65. If you think of all the money you spent over the years on car insurance, never had a claim and never received a dime in refunds, you will see that disability insurance makes even more sense because either way you get paid.

If you have disability coverage at work ask yourself if the coverage is enough, and if you are self-employed then disability insurance is simply a no-brainer. The elephant in the room is burying your head in the sand and neglecting to seriously consider adding disability insurance to your financial fitness plan. It is like heading outside in minus 20 degree temperatures wearing shorts and a golf shirt.

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The 40% includes LGBTQ

Karl Marshall — Wed, 04 Feb 2015 20:22:37 +0000

According to The Canadian Cancer Society a staggering 40% of all Canadians will develop cancer in their lifetime.

I was never good with numbers however it seems to me these days that an alarming number of Canadians are being diagnosed with one form of cancer or the other, and the disease doesn’t appear to discriminate. During the months of October, November and December 2014 our brokerage delivered critical illness insurance claim cheques totaling over $1Million to Canadians who were diagnosed with cancer, and the demographic included clients who were members of the LGBTQ community.

We can speculate and can make predictions based on facts, figures, and trends, but the truth is nobody knows for sure who will develop cancer or any other disease for that matter. One thing I do know for sure, as a professional who also sells life insurance, is that more people are becoming seriously ill than there are people dying. In fact our health care system is so awesome that people are living longer. This is reflected in the fact that critical illness insurance is typically about three times the price of term life insurance; the incidence of cancer is greater than the incidence of death and insurance companies are paying out more per year in critical illness claims than they do in death claims.

I don’t know what percentage of Canadians will develop cancer, but I do know that members of the LGBTQ community do develop cancer and are included in the 40% that the Canadian Cancer Society thinks will develop this disease. The fundamental question you should be asking yourself is “if myself or my partner got diagnosed with cancer, would serious financial stress ensue?” If the answer is yes, then you should seriously consider adding critical illness insurance to your financial fitness program.

Critical Illness insurance pays out a tax free lump sum to you provided you survive 30 days of a diagnosis of cancer, stroke, heart attack (to name a few of the covered conditions). It is insurance that pays you while you are alive, and if you remain healthy and never have a claim (meaning you are not included in the 40%), then you can receive a partial or full refund of your premium depending on the policy you purchased. You can qualify for critical illness insurance even if you have serious medical conditions. Don’t assume that you won’t qualify because you have other medical conditions.

Thinking that you won’t develop cancer, and not being screened for cancer, is the Elephant in the Room. Deflate it today by getting screened by your doctor and make sure you are financially prepared in the event you do fall into the 40%.

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