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Russ MacDonald

Every week or so, I encounter many prospective clients who look to purchase life insurance coverage or are wishing to set up RRSP accounts to assist in funding their retirement. A common situation that comes up is that many of these clients have existing coverage in place as well as existing RRSP's that they have set up throughout the years. When I ask questions regarding the details of these plans, many clients do not know much of the particulars on them, resulting in a lost sense of their full financial picture. One thing we discuss in these meetings is consolidation. Basically, by that I mean to combine their plans into one account — all RRSP's into one and all Term Life policies into one. If you have 3 young kids at home and they wanted to go play at the park, you wouldn't take them to 3 different parks, would you? Why? Because it doesn't make sense. Why would you do so with your finances?

I ran into a similar scenario to this recently. Just last week, I met with a gentleman who wanted a review of his current financial situation. He inquired about life insurance as well as ways to increase limit income tax. After some fact-finding questions, I found out that over the years he had a few RRSP accounts set up, as well as a couple of term life insurance policies that were due to renew in 5-7 years.

With his RRSP's, he was getting regular statements on the accounts. However, he basically lost touch with the advisors he set them up through. Either they were no longer in the business or they moved to other cities to advance their career. What this gentleman found difficult was he would get numerous statements from the fund companies, so it was hard for him to track performance on the accounts. As well, he also never really felt that he had a concrete plan or a point of contact. It became somewhat stressful dealing with this for him.

We also uncovered his need for life insurance was for a total of $750,000. Like I mentioned, he had other plans in place that totaled $475,000. So get him to the $750,000 mark, he needed to purchase $275,000 additional. For this gentleman, it made more sense for him to apply for a total of $750,000 because the cost for that would be less than he was paying for all three policies combined. The nice part about life insurance pricing is that the more volume you buy the lower the cost per thousand of benefit they company charges. For him it was a no-brainer to apply for the new ($750,000) and once that was approved we would then cancel his other plans. This saved him quite a bit of money per month. The savings he was able to save was put to use by contributing them to a new RRSP account we set up. We added a couple hundred extra dollars to that contribution so that he would receive some extra money back off of tax owing for that year. We also transferred his existing RRSP accounts from the other companies so that he had one account which was easier to track.

Now he has simplified his life tremendously. He left my office feeling a very big weight off his shoulders. This can happen for many others, too. To find out if this type of idea could work in your situation please fell free to contact me today.

Russ MacDonald
Heritage Insurance Ltd.
(306) 631-9738


Learn more about our coverage options. Call Heritage Insurance, LTD at (800) 667-7640 for a free Moose Jaw SK life insurance quote.

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