Dust Bunnies and Cobwebs: What’s Gathering Dust in the Corners of Your Life?

Let’s face it, we all feel better after a good spring cleaning. We find items we can use, give away to others who will appreciate them and just purge what will never be useful for anyone. Similarly, dusting off your insurance files might save you a few bucks, help you get rid of redundancies and make you feel better.

Here are a few questions to help you get started.

• Beneficiaries: Have you updated these documents recently: countless court cases over unintended and conflicting beneficiary designations? Think of your pension plan, RRSP, TFSA, group life insurance and private policies. Be sure your will does not conflict with those.
• Renewed Rates Forgotten: Has your term policy renewed at prices out of the market range? Should you challenge the medical and get new coverage for a fraction of the premium?
• Redundant Riders: Are you paying for riders that may no longer have value at this stage of life? Riders like AD&D (accidental death and dismemberment) on a life policy or future insurability on an old disability contract are some examples.
• Coverage: Do you still need all that coverage if you have paid off the mortgage and your kids are on their own?
• Policy Structure: Is your permanent policy (universal life or whole life) properly structured? Review investment options, funding methods and extra features that may be cannibalizing the plan.
• Premium Frequency: Can you switch from monthly to annual payment to save 5-7 per cent on premiums?

Sometimes, spring cleaning is about finding space for new items. Equally, once you have freshened up your insurance portfolio, there may be room to include more current term plans at better rates or a new strategy to reduce tax and secure a lasting legacy.

The above is what to look for if you are doing this on your own, but it is not an exhaustive list. To be sure you have covered it all, it’s best to involve your insurance professional for a thorough cleaning.

In the next issue, we will look at reusing and recycling an old insurance policy.

Statistics and factual data and other information are from sources RJL believes to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities nor is it meant to replace legal, accounting, taxation or other professional advice. We are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The information is furnished on the basis and understanding that RJL is to be under no liability whatsoever in respect thereof. This is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., Member - Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd. (“RJFP”), a subsidiary of Raymond James Ltd., which is not a Member - Canadian Investor Protection Fund. When providing life insurance products, Financial Advisors are acting as Insurance Representatives of RJFP. Raymond James Trust Services are offered by Raymond James Trust (Canada) in the provinces of British Columbia, Alberta, Saskatchewan, and Ontario, and by Raymond James Trust (Québec) Ltd. in the province of Québec. Trust Services are not covered by the Canadian Investor Protection Fund. Raymond James advisors are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters.