Why should newcomers purchase life insurance and what does it cover?
In the event of death, life insurance covers the deceased’s financial commitments, such as mortgage and debts. It also provides relatives with the money they need to maintain their lifestyle and covers death-related expenses, such as the cost of repatriating the deceased to their country of origin. This money is tax-free.
How would a newcomer choose the best life insurance?
The best way to choose a life insurance product that fits your specific needs and financial situation is to consult a qualified, experienced advisor. They will guide you.
What is the approximate cost of life insurance?
The cost of life insurance varies according to your needs. Here are a few examples of term life insurance costs:
- $9/month for coverage of $100,000 on a 10-year term: 26-year-old female, non-smoker
- $47/month for coverage of $750,000 on a 20-year term: 35-year-old male, non-smoker
- $62/month for coverage of $350,000 on a 15-year term: 50-year-old female, non-smoker
Are non-Canadian citizens eligible for life insurance in Canada?
Yes, it is possible for foreign nationals to purchase life insurance. This would be the case for a study permit holder, for example. You can contact an advisor for more details.
What types of life insurance are available in Canada?
There are many types of life insurance to choose from, each with its own distinct characteristics. Examples include:
- Term life insurance
- Permanent life insurance
- Participating life insurance
- Universal life insurance
Are my immigration documents required to purchase life insurance?
No. Immigration documents are not generally required to purchase life insurance.
What other types of insurance are available to newcomers?
Different types of insurance products include:
- Critical Illness Insurance : Provides tax-free financial aid if you are diagnosed with a critical illness covered under your policy.
- Disability and Income Insurance : Provides a source of income during disability leave to meet financial commitments and concentrate on recovery.
- Accident Insurance : Provides a lump-sum payment or covers certain accident-related expenses if you suffer an accident.
- Home Insurance: Protects against damage to your home due to fire, flood, theft, water ingress, etc., whether you are a tenant or owner.
- Auto Insurance: Required by law, it protects your vehicle and wealth, and provides access to emergency assistance.
Please note that public and group insurance plans offered by employers do not always provide complete coverage. It is important to complete your coverage with the help of an advisor.
How does a newcomer build their credit history in Canada?
Your credit report is automatically created as soon as you take out a loan or apply for credit. Your credit rating develops over time based on how you manage your credit.
Positively affect your credit rating by paying your credit cards, rent, mortgage, and electricity bills on time. Negatively affect it by paying bills late, requesting multiple loans or credit cards, and exceeding your credit limit. A clean credit report is important for obtaining financing, renting an apartment, purchasing insurance, or receiving an advantageous interest rate.
What investment options are available in Canada for newcomers who want to save?
Here are some investment options for newcomers:
- Registered Retirement Savings Plan (RRSP)
- Tax-Free Savings Account (TFSA)
- Registered Education Savings Plan (RESP)
- First Home Savings Account (FHSA)
- High Interest Savings Account (HISA)
- Guaranteed Interest Fund (GIF)
- And many more
An advisor can help you choose the best investment options based on your risk tolerance and financial goals.
Can newcomers start contributing to a Registered Retirement Savings Plan (RRSP) the same year they arrive in Canada?
Yes, you can start contributing to an RRSP as long as you earn an income in Canada and have filed at least one income tax return with the Canadian government. Foreign workers and students can also start saving before becoming permanent residents.
Is it possible to withdraw funds from a Registered Retirement Savings Plan (RRSP) before returning abroad?
If the assets in your RRSP are invested in a non-locked-in plan, it is possible to withdraw them at any time. However, the amount withdrawn will be added to your taxable income for the year, and you will be taxed according to your tax bracket. Consider the tax implications of withdrawing from your RRSP.
How can newcomers plan their retirement in Canada?
Retirement planning involves many factors. Seek professional advice from a financial security advisor who can help determine your retirement goals and how much you need to save to reach them based on your income.
How can newcomers save to buy a home?
There are many tax-free plans and accounts to help you buy a home in Canada, such as:
- First Home Savings Account (FHSA)
- Home Buyers’ Plan (HBP) through your RRSP
- Tax-Free Savings Account (TFSA)
It is also important to protect your mortgage with mortgage life insurance.
