In a nutshell, a tax shelter allows your investments to the grow free of tax. Many people think tax shelters are only for the rich but the biggest users of tax shelter is the middle class. When you buy a RRSP (IRA or 401K in the US), you are in fact buying a tax shelter. The money made inside the RRSP is allow to grow tax free until it’s taken out.
There are a few problems with a RRSP. The first is the Canadian government won’t allow you to put more than 18% of your income or $16,500, whichever is less, into a RRSP. The second problem is the money is subject to income tax when it’s taken out.
Another way to shelter income is by using life insurance. Life insurance proceeds are passed tax free to your beneficiaries. That’s good for your beneficiaries but what if you want the money? All whole life and universal life insurance policies have a cash surrender value that you get if you give up the insurance. If you take the cash, your beneficiaries get nothing and the money taken out gets taxed. Not a good deal. However, there is a way around this.
With the exception of term insurance, all other life insurance policies are made up of two components, the insurance component and an investment component. The key here is the investment component. While the money is inside the policy, its allowed to grow tax free, just like a RRSP. Knowing this, many investors put way more money than they have to into their policy. For example, a 37 year old non smoking female has to pay $622.50 a year to get $1 million of life insurance. If all she does is put $622.50 into her plan, all she’ll have is insurance. Anything above that amount goes into the investment component.
To prevent people from dumping in their life savings, the government sets limits on the maximum premium you can pay into a policy and still keep its tax shelter status. In the above example, the maximum is $41,847.61 a year. The higher your insurance needs, the higher the limit. Let’s assume that the above put $41,000 a year into her policy for 3 years and then stops after that. After paying for insurance cost the rest will go into the investment component, where it will grow tax free. If we assume an 8% yearly rate of return the policy will have a cash value of $1.3 million and death benefit of $2.15 million when our 37 year old female reaches 65. If she takes the cash, it gets taxed and she loses the death benefit. How can she take cash out, keep the death benefit and not pay taxes? By borrowing against the cash value.
A bank will lend up to 90% of the cash value on an insurance policy. So our investor can borrow up to $1.17 million from the bank to spend as she feels like. The money would not be taxed because it’s not income. The bank would capitalize the loan so she doesn’t have to make any payments. How does the bank get its money back? When she dies, the death benefit will pay off the bank loan plus accrue interest and any money left over will go to her beneficiary tax free.
So here you have an investment strategy that is completely sheltered from tax, allows you to take money out of the plan tax free, and allows you to transfer your estate to your heirs’ tax free. As with all investments, you should seek out the advice of an experience financial planner before proceeding.
jeudi 31 décembre 2009
mercredi 30 décembre 2009
By taking the time to shop for and compare auto insurance quotes, you can find the best policy that is right for you, many times you can lower the cost of your auto insurance coverage.
Many drivers see auto insurance as a necessary expense, but one that is distasteful to them. When asked if they’d pay for auto insurance if it wasn’t required by law, some admit that if they didn’t have to pay for auto insurance they’d save themselves the money.
The truth is that given the right insurance, in unexpected circumstances it can be very beneficial to have paid those insurance premiums every month. Auto insurance can provide financial protection and help prevent severe financial hardship in the event of an unexpected accident.
Shopping around and getting auto insurance quotes from several companies can allow you to compare the companies, their policies, and the cost of their premiums. In order to effectively do this though, you need to have enough information to make a real comparison between one set of auto insurance quotes and another.
This information can help you make sure that you get the coverage you need from a good company at the lowest rate.
So what should you do to make sure that you get the most accurate auto insurance quotes available? Here are some suggestions from experts:
1. Make sure that you compare similar policies.
Auto insurance quotes take into account the types of coverage you select, the amount of deductibles you’re willing to pay and a number of other factors when figuring your premium. In order to accurately compare a number of quotes, make sure that each quote you request is for the same options on your policy.
2. Give the same amount of information to each agent that you ask for auto insurance quotes.
Whether you’re comparing quotes online through a web interface or over the telephone, the amount that you’re quoted will be affected by where you live, how far you drive to work each day, how old you are, who else may drive your car, as well as a number of other factors.
The more information you can give when you ask for a quote, the more accurate the insurance agent can be with his estimate. The opposite of that holds true, too – the less information you give, the more general the quote will be. If there is any question, an agent will usually quote you a higher rate.
3. Ask about special discounts for safety features as well as safe driver points.
When you’re gathering quotes for auto insurance, be sure to ask directly about safety feature discounts and safe driver discounts that may apply in your situation. Then you can be sure that they are included in your quotes.
4. Understand the differences in insurance terminology.
What is the difference between collision coverage and comprehensive coverage? How can raising your deductible lower your insurance costs? What will replacement transportation or glass coverage cost, and is it worth it for you? Researching the answers to these questions and knowing which options are included in your auto insurance quotes will make it far easier to decide which is the best policy for you.
dimanche 27 décembre 2009
The auto insurance looks like a choice, and not actually a necessity. Free Auto Insurance Quotes. For someone who owns a car, auto is actually a necessity to be protected in regards to your vehicle. For many states, auto insurance is mandatory and necessary in order to have a car and register it.
Having vehicle insurance protects all other drivers if there is an accident. Until you see that you have been in a car collision and suddenly are paying thousands of …
All of us will require holding the best insurance policy that is suit our living whether auto insurance, travel insurance, health insurance, car insurance or other types include to life insurance. As we will need to pay monthly or yearly that may be expensive, so it is fairly to get the most benefit from a policy we pay for on sticky schedule. In order to discover the best life insurance policy which cost us lesser while provide us the most advantage, we will need to get ourselves the most information of life insurance first.
To do this, there are several ways from to make a call to few reputable insurance companies, to get some information from someone like your relative, your friends, or your neighbor who are experience. But, the quick and easy way is to search what you need to know about life insurance from internet โ€“ the place where huge information will be provided for you. However, once you find this article (as you access the internet), it is luckily for you as here you will know about basic information as well as how to find out the best life insurance quote quickly.First of all, you should to know that there is something different between life insurance and term life insurance and this article will only focus on term life insurance.
The concept of term life insurance is not hard to understand. While most of the life insurance policies offer variety of options, term life insurance offer only limited flexibility. In addition, term life insurance does not make any cash value or any residual. It means that there is no use of term life insurance after the expiry of a policy and to continue a policy, you will need to renew it or purchase a new one.
Term life insurance remains effective for a limited, predetermined time span. A term life insurance will need you to pay regular premium during the term of your life insurance policy. And if you die during the term, death benefits will directly go to the beneficiary.
It is true that other insurance solutions provide you more readily options. Although term life insurance contain simplicity and limitations, it is still sensible among many people. The reason that why those ones prefer term life insurance policy to secure their life and financial is many times that an individual is not covered by any life insurance policy due to some reasons, but a term life insurance can fill the gap as it will protect the financial interests of their family.
Term life insurance is the best choice for people looking for life insurance coverage for a short period of time include to young working people with families. The best way to find the quote of term life insurance quickly is connect to the internet. What things to take in mind while going on searching from internet are about term of the insurance, the premium to be paid, term life insurance rate, and authenticity of the company. Look around and compare life insurance policies offered between few companies so that you can find the best one that is suit for your need.
There are many insurance companies that offer a wide variety of plans that you can choose from, you as a student cant afford to pay high prices for an insurance but by law you need to have at least liability insurance, if you can afford comprehensive is much better.
However for young people under 25 insurance costs are high due to several risks that insurance companies factor, but you can significantly reduce your costs and have a good quote by doing a few things:
if you have good school grades you may qualify for a discount
if you drive safely and careful you can also have a discount
if you enroll in a drivers education class too
if you set your deductibles high you will get cheaper insurance
ask your insurance company for any additional student discounts that you may qualify.
Another factor that can help to reduce costs is to check for insurance costs of a car before buying it, some models of cars have higher insurance costs.
have a good credit rating
Those are a few tips to keep your quotes at low prices, but every particular case is different, your age, sex, where you live, how long you have been driving all those are factors that the insurance companies check to dedice the cost.
compare different student car insurance quotes, you may find some good options also ask for student discounts. There are insurances for under $100 a month.
The everybody loves to have a car parked inside their garage. Everybody loves to let other people feel amazed seeing the greatness possessed by a car someone has. But actually, those things will remain a dream if only they do not know how to protect their cars from the possible losses that can harm the cars themselves. Therefore, to find a perfect way of defending a car should be an ultimate final destination people would come to after they have been successful buying a car. No need to be confused as well for there has been a useful service to be applied for in order to realize the mission entirely. It is the insurance service we are talking about here.
Well, basically, this kind of service is presented as a tool for people who would like to protect any aspect of their life. But specifically for cars, Autoquotenow.com is a place from where people should come in the very first place prior to anything else, indeed.
This website is an online provider for what we can call as a service of auto car insurance. This website contains complete information about such matter and thus, every little thing we are searching for are available in this website until we can surely feel comfortable on the belongings we possess. And since the rates are one thing we need to think of upon anything else, this website allows you to pick the auto insurance quote with the lower rate which enables you to save up to $600 when you have applied for the service right away. Uniquely, this website also provides the service based on the state where you are living at in current. That means you can simply compare the rates on a state toward another state’s easily.
To apply for the service is also something nice through this website. You would only require yourself to fulfill a special field existed inside the website with your very own zip code and then you can straightly have the car insurance quote all the way. So complete this website is that you can even see some other features of articles provided by it. For instance, if you are going to look for more information about this car insurance, this website allow you to access the feature of car insurance guide it provides. After all, the conclusion is that you can rely on this website for anything you desire upon car insurance services. So please feel free to log it on whenever you want to.
The Auto insurance is one of those bills we would rather not pay each month, but is as necessary as the light bill. As with any insurance, especially auto insurance, you never know how important it is until you need to file a claim!
The auto insurance market has become so competitive with new companies arriving on the scenes. And, have you ever seen as many auto insurance commercials on TV? It seems as though every other commercial is auto insurance related.
Many people do not realize the competitive nature auto insurance companies have been forced into, but it is definitely to our benefit. It is almost as competitive as the cell phone market, ALL insurance companies want their little piece of the pie and are even giving free auto insurance quotes to get you to convert to their company. The industry as a whole realize that many customers are looking to save money and cut monthly costs any way they can, and cutting auto insurance costs is one of the easiest.
There are other auto insurance companies that can save you money online like Outsurance or you can shop and compare multiple free auto insurance quotes. This will get you the best auto insurance quotes from the best companies so you can compare prices at one time.
I hear many car buying customers say “I have been with a certain company so long, I’d hate to switch.” What if it could save you several hundred dollars per year, would that equate to getting a raise? Has your auto insurance provider ever called you and said, I am going to lower your car insurance rates? Why not save some money where you can. You may be able to trade and get the car you have been dreaming of if you were able to save some money on your auto insurance!
The problem is, auto insurance is not a luxury, it’s a necessity. It can save you hundreds, maybe thousands of dollars, if you are, at one time in your life, involved in a car accident. Almost all car insurance companies provide monthly payment plans, which are quite easy to bear. Because the premiums are based on numerous factors, like age, gender, driving history, your credit history, and what kind of car you are driving. If you have more than tickets for exceeding the speed limit or you have been implied in several accidents, the price of your premium will be definitely higher.
The significance of automobile insurance is lost on many vehicle owners till the time they are unfortunate enough to run into some kind of the loss bearing event involving their vehicles. Such folks apparently see insurance as an expense and not as an investment as they ideally should. This reasoning has strong fundamental basis for it speaks of a situation where one can actually make good on certain damaging losses that may otherwise remain so.
There are different types of auto insurance covers to choose from and in this respect a good agent or broker can work with the customer to decide the cover options that provide the best protection at a price that is affordable to the customer. However the customer would stand to gain considerably in the long run if he takes the trouble of understanding certain basic factors that determine the cost of his auto insurance cover.
Deductible is the amount that the policy holder agrees to pay in the event of a claim. Moreover by choosing a higher deductible the policyholder can reduce his premium. The importance of deductible cannot be ignored while considering cheap insurance program. Usually a higher deductible lowers the insurance cost and therefore if the customer’s driving record is good, then he can increase his deductible and pay a lower premium.
Vehicle make and model
The make and model of the vehicle matters a great deal in determining the cost of insurance. For instance, an expensive car would have a higher cost of insurance for the simple reason that any damage or loss to the car would cost the insurance company more than what it would if the car was of standard make.
Vehicle security devices
When the policy holder make his vehicle secure by installing security systems such as an alarm or a tracker device it will enable him to get his vehicle insured at a cheaper rate. This is because the presence of such devices considerably minimizes the risk of theft and therefore insurance companies do not hesitate to provide auto insurance that is affordable.
NCD (No Claims Discount)
Most auto insurance companies offer NCD to policy holders with a claim-free track record for a specific period. In fact this is a major factor in determining the cost of automobile insurance which becomes evident when a driver with an eventful history checks out the cost of insuring his vehicle.
Finally it is always helpful to take advantage of the stiff competition in the market by checking out the quotes of a good number of automobile insurance providers before selecting any one company. The differences though not substantial, do matter in the overall calculations before deciding on an insurer.