Home > Frequently Asked Questions
Frequently Asked Questions
How much insurance do I need?
Does my spouse need insurance coverage?
What will I need to retire?
How long do I have to pay for insurance?
Is it a good idea to insure children?
Should I pay down my mortgage principal or purchase an RRSP?

Q. How much insurance do I need?
A. The best answer is that, for each person the amount of insurance needed is different.  A beginning is understanding the reason for the coverage.  Ask yourself, “If I died today, what would I want to leave my family and do I wish to leave any donations, etc.”  We often do a Capital Needs Analysis in order to help you determine what amount of coverage one needs.

Q. Does my spouse need insurance coverage?
A. If the spouse contributes financially to the home, then you probably should have some coverage.  If dependent children exist, then most definitely coverage is required.

Q. What will I need to retire?
A. Your retirement needs are dependent on your years left to retirement, whether or not you have a pension plan, whether or not you are a contributor in some percentage to the Canada Pension Plan and if you have been a contributor to RRSP’s over the years.  Your pension income needed often ends up being some 50% to 75% of your last 10 years income.  What you are planning to do in your retirement years will also help determine this answer.

Q. How long do I have to pay for insurance?
A. Most insurance is designed to be paid until age 65 of for life.  In many instances, however, dividends earned can be used to shorten this payment period to 10 to 15 years.

Q. Is it a good idea to insure children?
A. There is nothing wrong with insuring children as long as the intention is to protect their future insurability should they suffer a health problem as a child or young adult.  There are other benefits to insuring children such as the long premium and the cash accumulation, but protecting future insurability is most valuable to the child later in life.

Q. Should I pay down my mortgage principal or purchase an RRSP?
A. This is a common question and the general answer is “purchase an RRSP and use the tax refund to pay down the mortgage principal.”  This answer needs to take into consideration the interest rate on your mortgage and the potential in the market, etc., but normally this is the best answer.

Highfield Financial Group
Site design by Indie Design House