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Weekly Personal Finance Roundup For May 22nd 2015

May 22nd, 2015
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This week we celebrated our very own Aaron Broverman's bronze medal at the Grappler's Heart Brazilian Jiu Jitsu Tournament in New York. On Thursday, we discussed a recent decision by the Canadian insurance provider of University of Waterloo's health insurance plan to cover Medical Marijuana for a student.

We hope everyone's short week zoomed by. To cap it off, we've rounded up some of the best personal finance reads for you in the LSM Weekly Round Up.

We were happy to guest post for the Frugal Trader on his blog, The Million Dollar Journey, discussing 6 Important Tips When Buying Disability Insurance.

Benjamin Sinclair at The Motley Fool, writes about the recent IPO from Canadian e-commerce software company Shopify.

On the CanadianFinanceBlog.com, Tom Drake talks about some of the simple everyday delights of saving and how to experience more of them.

Our friend the Big Cajun Man shared a shorty-but-goodie post about how Debts Are Like Weeds.

The Canadian Couch Potato, Dan Bortolotti, dives into how changing interest rates affect fixed income securities.

Happy reading!

Should Medical Marijuana Be Covered Under Private Health Insurance Plans?

May 21st, 2015
medical marijuana health insurance
 Medical Marijuana Could Be The Next Drug Covered By Extended Health Insurance Plans

Marijuana legalization has been a major political talking point in Canada recently. But, what many people don’t know is that marijuana use for medical purposes has been legal in Canada ever since 2000, when a landmark court ruling struck down the prohibition of medical marijuana.

The use of marijuana, also known as cannabis, as a medicinal drug dates back centuries in many cultures. More recent studies have shown that marijuana can provide medical therapy for a myriad of diseases, alleviate symptoms and provide pain relief. Despite these findings, Health Canada and much of the country’s medical community have stressed that more research and trials are needed before they can endorse medical marijuana as a mainstream treatment drug.

New Rules Create A New Medical Marijuana Industry

On April 1, 2014, a new set of laws called the Marijuana for Medicinal Purposes Regulations (MMPR) came into effect in Canada. According to the MMPR, patients who require marijuana for medical use need to obtain the medication from a government approved “licensed producer”. The MMPR prohibits patients and unlicensed producers from growing their own marijuana plants or obtaining them through any other means.

Since licensed producers are the only legal source of obtaining medical marijuana, they have the power to set the prices for the drugs that they sell. Because of this “monopoly”, the cost of obtaining marijuana through these legal channels has gone up exorbitantly. Some patients are being charged as much as $12 per gram for their medical marijuana. Others have estimated their medication to cost them as much as $30,000 a year. 

It’s worth keeping in mind that while every Canadian province has a sponsored health plan that provides free health care, this plan doesn’t cover prescription medication (in most cases).

Most people are part of group health insurance plans (usually as an employee or trade association member). These group health insurance plans usually cover the cost of prescription medications that have a Drug Identification Number (DIN).

As explained above, the problem with medical marijuana is that it’s not considered by Health Canada to be a mainstream treatment drug and doesn’t have a DIN at the moment. This makes it ineligible to be included in current health insurance plans.

Because of these factors, patients who require the use of medical marijuana are expected to pay for the medication out of their own pocket.

Things Might Soon Change For Patients Medicating With Cannabis

Recently, Sun Life Financial agreed to cover medical marijuana costs for University of Waterloo student Jonathan Zaid.

The 22-year-old Zaid required the use of cannabis to deal with a chronic condition known as New Daily Persistent Headache (NDPH). People diagnosed with NDPH suffer from migraine-like pain that disrupts sleep and causes sensitivity to light and noise. Medical marijuana has been known to help ease the pain for people dealing with this syndrome.

Zaid’s NDPH syndrome left him unable to focus on his university studies. With Sun Life Financial being the official health insurance provider for University of Waterloo students, Zaid contacted the insurer and was granted reimbursement for medical marijuana that he said cost him as much as $30 a day.

While Sun Life Financial has insisted that accepting Zaid’s claim was a special exception and that it wouldn’t offer medicinal marijuana coverage to the public in its existing health insurance plans, this landmark case has raised hopes among medicinal marijuana users that insurance carriers will soon start providing coverage for their medication.

After his initial claim was accepted, Zaid has started a new organization called the “Canadians For Fair Access To Medical Marijuana” to push for more insurers to cover medical marijuana. Canada’s medicinal marijuana industry has also started lobbying for private insurers to cover medical marijuana claims like they do for other treatments.

That’s easier said than done, however. According to this article from the Huffington Post, the number of medicinal marijuana users in Canada has increased exponentially over the years. There were as many as 37,000 people in Canada last year who had a prescription to medicinal marijuana. If even a fraction of these people begin claiming medication costs, insurance carriers will suddenly have pay out vast sums of money in new claims.

Most insurance carriers wouldn’t be willing to sustain those levels of financial losses and will look to pass on any extra costs to their current and future customers by increasing the average costs of premiums. Raising the cost of premiums would obviously have a significant impact on the entire health insurance industry and could change the way customers approach health insurance.

Before making any changes, insurance companies need to do their market research and determine whether the demand for the inclusion of medical marijuana in current health insurance plans is strong enough and if people are willing to pay extra in order to receive coverage for medical marijuana.

LSM’s Aaron Broverman Competes in the Grappler’s Heart Tournament

May 17th, 2015
LSM logo BJJ GI
 LSM Insurance helped make history a few weeks ago at Grappler's Heart BJJ Tournament.

Thanks to our Director of New Business Lorne Marr, a black-belt in Tae-kwon-do, and Syed Raza, our Director of Marketing who trains in Brazilian Jiu-Jitsu (BJJ), we've had the pleasure of sponsoring a couple Mixed Martial Arts (MMA) competitors over the years. But on the weekend of April 25 and 26, LSM took our support of athletes to the next level and participated in something very special.

Aaron Broverman is a founding member of our blogging team – writing our articles, newsletter intros and sometimes managing our social media accounts. He also trains in BJJ, but he does it with a difference.

Aaron has cerebral palsy – a neuromuscular condition that affects his balance, coordination and the spasticity of his muscles. Basically, a lot of the things one would assume you'd need to excel at BJJ, but he does it anyway for three hours a week, every week.

Though Aaron has competed against able-bodied opponents in the past with moderate success, on that April weekend he traveled to the Renzo Gracie Fight Academy in Brooklyn, NY to compete in Grappler's Heart – North America's first jiu-jitsu tournament for competitors with disabilities.

The brainchild of Dr. John Gelber of Fightmedicine.net – a website dedicated to health promotion and injury prevention for MMA fighters – John invited Aaron to help organize Grappler's Heart as a member of the Board of Directors after reading an article Aaron wrote about his jiu-jitsu journey.

After a year and a half of planning, it finally came to fruition even though only half of the over 30 competitors actually showed up. Among them was Gina Hopkins, a fellow board member and the only female competitor who came all the way from Bristol, England to participate. All competitors were divided into divisions based on skill level and disability. Divisions included Upper Extremity Amputee, Lower Extremity Amputee, Spinal Cord Injury, Neuromuscular and Other, which included deaf, blind and developmentally challenged competitors.

Placed in the neuromuscular division, Aaron was fortunate enough to represent his gym Toronto BJJ and the Ribeiro Jiu-Jitsu Association with teammate Stephen Dustan who also has cerebral palsy. The two did extremely well, both making the podium in their division. Stephen lost in the gold medal match to gain a well-earned silver and Aaron was right behind him with a bronze. 

The next day, Aaron was fortunate enough to learn new techniques and strategies from some of the world's premiere disabled grapplers, including mma fighters Keith Miner and Nick Newell and a first degree brown belt in Judo and a blue belt in BJJ -- Matt Marcinek.

As his secondary sponsor, LSM Insurance congratulates Aaron Broverman on his hard work and was extremely honoured to contribute to his expenses during his stay in Brooklyn. Here's to continued success on your Jiu-jitsu journey as you strive for gold at Grappler's Heart next year!

Aaron in Mount Position
  Aaron Setting Up a Choke From The Mount Position
Victory over Brandon Ryan
Victory over Brandon Ryan 
Grappler's Heart Podium
Aaron Awarded His Bronze Medal On The Grappler's Heart Podium 

For more information on Aaron Broverman's Brazilian Jiu-Jitsu journey, please read an article he wrote for Fightland.com and for more information on the Grappler's Heart Tournament, go to their website.

Weekly Personal Finance Roundup For May 14th 2015

May 14th, 2015
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We here at LSM are most definitely looking forward to this upcoming May Two-Four Weekend so to get things started we've got a solid list of personal finance articles that should help keep your wallet in check this Victoria Day. 

On LSM Insurance, we showed how Term to Age 80 products could be an affordable way to secure long-term life insurance coverage. Later in the week, we interviewed the CEOs of the two Peer-to-Peer lenders currently active in Canada, Grouplend and Borrowell.

Rob Carrick at the Globe and Mail explains why the 3 types of 'good' debt may not be that great after all.

In her Special to the Financial Independence Hub, Marie Engen explains what happens to cash if it has been left dormant in a bank account for over 10 years.

The Blunt Bean Counter explains how your date of birth could effect your personal finances.

On her blog, My Alternate Life, Jordann Brown gives some advice on how to get motivated to save more money.

Lastly, Mr. CBB gives readers his top 5 reasons why we pay too much on our grocery bills.

Have a great long-weekend folks!

The Lowdown On Canadian Peer-to-Peer Lenders

May 12th, 2015
peer to peer lenders

Peer-to-peer lending, also known as marketplace lending, is becoming a big topic in the world of personal finance. Peer-to-peer lending is where a business or private investor can lend money to unrelated borrowers without having to go through traditional financial intermediaries. Transactions take place online via a marketplace lender's website. 

There are two marketplace lenders active in the Canadian market so far, Grouplend and Borrowell. We reached out to Kevin Sandhu, CEO of Grouplend and Andrew Graham, CEO of Borrowell, to learn more about what their companies have to offer consumers.

Grouplend Logo 1

Grouplend is Canada’s first marketplace lending platform. The company is currently operating in all provinces except for Quebec, Nova Scotia and Saskatchewan. 

How Is Grouplend Different Than Other Marketplace (peer-to-peer) Lenders?

The biggest point of differentiation for us is our technology. We have best-in-class technology built by best-in-class engineers. Our algorithms look at many different data points beyond just simple credit data. That approach wouldn’t be possible without incredibly robust systems. This commitment to technology allows us to constantly optimize our rates to ensure that our borrowers are being charged the fairest price possible. It also allows industry-leading speed of funding: our borrowers have the money in their accounts within 24 hours. We also don’t charge our borrowers fees of any kind. No origination fees; no early repayment penalties. And, best of all, applying for your personalized quote with Grouplend doesn’t affect your credit score.

Are You A Financial Intermediary Like A Bank?

We are fundamentally different than a bank because we don’t carry loans on our balance sheet. We pair qualified borrowers with investors looking for fair returns on their money to create a faster, more convenient, and more affordable borrowing experience. By introducing this efficiency — stripping out the branch structure, and the legacy systems — we are able to operate with minimal overhead, further reducing the costs of borrowing.

Our technology driven approach to lending also drives a very different culture than you’d find at a typical bank. We’re constantly striving for innovation and better customer experience unlike many traditional financial institutions that have become complacent and stagnant over the years, often taking their customers for granted.

Why Should Borrowers Use Grouplend Over A Traditional Financial Institution?

When it comes to unsecured loans, we’re the fastest, most convenient, most affordable option in Canada. Applying for a personalized quote with us only takes 1 minute, and it doesn’t affect your credit score. You don’t have to stand in line at a branch, or have a face-to-face meeting; it’s all done on your time right from your phone or computer. And because we don’t have the overhead of a traditional financial institution, we can pass even more savings onto the customer. With us, you’re funded within 24 hours, and we don’t charge origination fees or early prepayment penalties. It couldn’t be simpler.

Please Tell Us More About Your 'Data Analytics' And Why Should We Care?

Banks of the past were manual and people-driven. Banks of the future will be automated and data-driven. Data is central to this thesis, and its central to who we are, as well. The more data we feed into our technology, the smarter it gets. We get better at fraud detection. We constantly learn how people interact with the platform. And, above all, we get better at determining optimal interest rates.

One of our favourite quotes around here is, “all data is credit data — but we need to learn how to use it.” We look at every data point that we can possibly collect, because we think that everything is potentially impactful in determining someone’s creditworthiness. Why should your interest rate be decided simply by your credit score? Your credit score is part of a much larger mosaic of information — it’s our job to see the whole picture to get you the best rate possible.

How Do Your Rates Stack Up Against The Competition?

Our rates are very competitive against any unsecured product on the market. Many of our borrowers come to us looking to consolidate their costly credit card balances, which we are extremely competitive against. Our rates range from 6.3% to 17.5%, which is anywhere from 2.5% to nearly 13% below the average Canadian credit card. At the lower end of our interest rate range, we’re competitive against unsecured lines of credit. We’re also able to win on convenience against unsecured lines when you factor in the speed of the application process and next day funding. For many of our borrowers, the prospect of not having to stand in line at a bank or up to a week for approval on a line credit is immensely appealing. Plus, our loans offer the benefit of fixed interest rates, compared to variable-rate lines. This is especially important to our borrowers in today’s interest rate environment, where rates on things like lines of credit really have no where to go but up. Locking yourself into a fixed-rate product protects you against the inevitability of interest rates rising.

From The Time I Fill Out An Application On Your Website How Soon Can I Get My Loan?

Our borrowers are funded within 24 hours of their application. Many of our borrowers are surprised with how quickly the funds arrive in their account, but what they’re even more impressed with is the amount of active time in takes on their part. The application process only takes 1 minute. We ask for a bit of documentation to verify their identity, which doesn’t take more than 5-10 minutes to upload to us. We then have a quick 3-minute phone call with the borrower to ask a few verification questions. It takes the borrower less than 20 minutes of their own personal time to go through the process, and the money is in their account the very next day.

At What Point Does A Debt Consolidation Make Sense For Consumers?

It’s a smart choice to consolidate your debt at a lower interest rate regardless of how much debt you have. Whether you have $1,000 or $30,000 on your credit card balance, there is money to be saved if you’re paying 19.9% on your credit card. Even at our highest interest rate of 17.5%, you’ll still save over $2,600 compared to 19.9% on a credit card balance of $15,000. That’s huge. At our best rate of 6.3%, the savings are more than $5,500.

Does Grouplend Charge Upfront Fees? If Not, How Exactly Does Grouplend Get Paid?

Grouplend does not charge fees to borrowers, including origination fees or prepayment fees. We make our revenue from investors who fund the loans. Our mantra is refreshingly simple loans, and that can’t be accomplished by charging confusing fees to our borrowers. Our loans are as simple to understand as they are to apply for.

Your Website Makes It Very Easy To Apply For A Loan But What Is The Process For Someone Interested In Becoming An Investor/Lender?

We are currently fully committed for new loans from existing investors but plan to be able to offer new investors an opportunity to participate in loan funding later in 2015. In order to comply with relevant regulatory and securities issuance requirements in Canada, we are only able to accept accredited investors onto the platform. To find out if you qualify as an accredited investor, please contact your provincial securities commission to find out more information.

Where Do You See The Future Of The #fintech Industry Going As A Whole And Within Marketplace Lending In Particular? 5 Years Out? 10 Years Out?

Great question. Fintech is still young in terms of the impact that it’s going to have on the wider financial industry. In 5-10 years from now, the way that people interact with their banks and other financial institutions will have completely changed. In the 1990s, Travel agents were usurped by companies like Expedia. In the 2000s, appointment television was overthrown by technology like Netflix. Fintech will revolutionize finance in a similar way to usher in the age of on-demand banking. The thought of having to walk into a branch during business hours will be unthinkable.

As far as marketplace lending is concerned, thus far — especially in Canada — we’ve only conquered a small subset of the market. Today, we only offer personal loans. A few years from now, this model will likely have spread into areas like student loans, small business loans, and maybe even lines of credit, bringing with it much more affordable rates thanks to technology-anchored solutions.

Fintech is just getting started, and the decade to come is going to very, very exciting.

Where Can We Learn More About Grouplend?

You can learn more by visiting our website.

 Borrowell

Borrowell is the second marketplace lender operating within Canada. Borrowell is working to get loans to the residents of Canada with the exceptions of the Northwest Territories, Nunavut, Quebec, Saskatchewan or Yukon.

How Is Borrowell Different Than Other Marketplace (peer-to-peer) Lenders?

The marketplace lending model has been very successful internationally. We’ve taken the best of that business model—fixed term loans, interest rates tailored to each consumer and an easy online experience—and adapted it for Canada. We’re proud to offer a large range of loan options, with fixed rate loans up to $35,000 and a choice of 3 and 5 year terms.

Are You A Financial Intermediary Like A Bank?

We provide personal loans tailored for each individual. As a marketplace lender we match institutions looking to lend with people looking to borrow. We operate exclusively online and don’t have an expensive branch network to run, so we can pass the savings onto the customer. Banks and other lenders lend from their own balance sheets. We’re doing for borrowing what companies like eBay and Airbnb do for their markets, by bringing buyers and sellers together for the benefit of both.

Why Should Borrowers Use Borrowell Over A Traditional Financial Institution?

We provide an online platform that connects borrowers with lenders, offering for many people more affordable interest rates than credit cards and banks. Before, you had to choose between the convenience of a credit card and the affordability of a bank loan. The credit card is costly and the bank loan is inconvenient. With Borrowell, you no longer have to choose between convenience and affordability. You can apply from the comfort of your own home in a matter of minutes and get an interest rate customized to you.

Please Tell Us More About Your 'Data Analytics' And Why Should We Care?

We use data to provide customized rates to borrowers. A customer’s credit history is central to how we underwrite our loans, and we also look at information that helps us predict how likely it is that a borrower will repay on schedule. This gives Canadians a great alternative to borrowing from a bank or using credit cards.

How Do Your Rates Stack Up Against The Competition?

Borrowell’s rates start from 5.9% APR. Credit card rates in Canada are typically 19.9% or 29.9%. Many people who qualify for our loans receive lower rates than they’re currently paying – our median offer on a 3 year loan is 12.25% APR. Borrowell rewards Canadians who’ve worked hard to build good credit by giving them lower interest rates.

From The Time I Fill Out An Application On Your Website How Soon Can I Get My Loan?

We present loan options instantly on our website. If you proceed with your loan, verification and funding can take between 2 - 4 days depending on your financial institution.

At What Point Does A Debt Consolidation Make Sense For Consumers?

Debt consolidation can be a smart move if you have any debt, including a credit card balance, and can find an alternative with a lower rate. It’s quick and free, for example, to check your rate at Borrowell.

Does Borrowell Charge Upfront Fees? If Not, How Exactly Does Borrowell Get Paid?

At Borrowell, we have no hidden fees. You can check your rate and apply for a loan in less than a minute, completely free of charge. All loans feature an affordable fixed rate, so your regular monthly payment will never increase. And you can repay your loan in full at any time – with no prepayment penalties – to eliminate future interest payments. When you apply for a loan through Borrowell, you’ll find out right away if you’re eligible to receive a loan option. Qualified applicants will find out their loan amount, interest rate, origination fee and annual percentage rate (“APR”).

Your Website Makes It Very Easy To Apply For A Loan But What Is The Process For Someone Interested In Becoming An Investor/Lender?

In Canada we aren’t able to take individual retail investors on as lenders, so we have focused on institutional lenders. We have great people and companies who have invested in us, including Equitable Bank, which is an innovative Canadian bank that’s a great supporter of what we’re building. We also have high profile individual investors, such as John Bitove, who founded the Toronto Raptors and companies like SiriusXM in Canada.

Where Do You See The Future Of The #fintech Industry Going As A Whole And Within Marketplace Lending In Particular? 5 Years Out? 10 Years Out?

Fintech is really taking off in Canada right now. We’re seeing great companies offering solutions in areas like wealth management and small business lending. For marketplace lending, technology will provide an even better customer experience - computers can check a fake ID better than the human eye. You’ll also see marketplace lenders expanding their products as they learn more about their customer - SoFi in the US has went from student loan refinancing to mortgages. A member of the Borrowell team just published a great blog post about fintech that I’d highly recommend.

Where Can We Learn More About Borrowell?

By visiting our website. Here you’ll find more info on the loans we offer and different ways to get in touch with our customer services team.

Term Insurance To Age 80: Making Life Insurance Simpler

May 11th, 2015
Term insurance age 80

If you have a family, or loved ones that you want to protect in the event of your death, you have probably considered life insurance. There are a myriad of options available including permanent life insurance and term life insurance.

Term life insurance is simple and easy to understand and generally have predictable and very affordable premiums. It can be a great complement to permanent life insurance if that coverage doesn’t give you a large enough dollar amount to fulfill your life insurance needs. For example, a permanent policy covers you for life, but you may need more during your middle-age years to protect the cost of a mortgage.

A term policy to cover the life of the mortgage in conjunction with a permanent policy can be beneficial. It can also sometimes be obtained without a medical exam. Below, term life insurance will be discussed in detail and you will be provided some reputable sources for term-to-age-80 life insurance policies.

Term Life Insurance is Easy to Understand

Term life insurance is one of the easiest types of insurance you can get. As the name implies, term insurance is a policy that is valid for a set amount of time.

The term is usually flexible and can range anywhere from 5 to 40 years. If you pass away during the term of the insurance a fixed benefit amount will be released to your beneficiaries.

The policy can be renewed if the term expires; although, the premiums will be lowest if you sign up when you are young and healthy. You will be expected to pay higher premiums each time you renew.

Term Life has Predictable and Affordable Premiums

The main difference between term and permanent life insurance is that with term life insurance the death benefit doesn’t build value as the person who is insured ages.

This makes term life insurance incredibly affordable and the premiums are reasonable for most families. The premiums for term life insurance are also more predictable and stable. You know exactly how much will come out of your account each month and can easily incorporate the cost into a budget.

Term Life Insurance is a Great Top Up

If you already have permanent life insurance through your work, term life insurance can be a great supplement to this coverage. You may not have enough life insurance with the plan provided by your employer and you may want your family to be financially secure in the event of your death.

Term Life Insurance Can Be Easy to Obtain

If you are concerned about how you will do on a medical examination, you can find plans that will accept you without one. No physical exam, no blood work, no EKG, no urinalysis test. This can be useful for people with a history of health issues but who still want to protect their families.

There are companies that will help you, and you don’t have to go without insurance because of your medical history.

Let’s turn to discuss four reputable providers of insurance companies that offer Term-to-age-80 insurance.

Wawanesa’s Term-to-age-80 Plan

Wawanesa’s LifeStyle Term insurance is available for anyone aged 18-70 and you can apply for a 10, 20, or 30 year term. You can set the benefit up to $1 million. Depending on how much insurance you want, you may have to undergo a physical medical exam including blood work and an EKG.

With this plan you can also add a joint first-to-die clause on their policy in which a beneficiary can receive the death benefit or convert the policy into permanent life insurance for themselves if the co-applicant passes.

Wawanesa also offers a child protection waiver, a disability waiver, and accidental death options than can be added onto a policy.

Industrial Alliance’s Term-to-age-80 Plan

Industrial Alliance has three main Term-to-age-80 plans. The first is a Pick a Term option. You can be insured for a term from 10 to 40 years and it helps you cover your financial obligations. This is a great option if you are still paying off a house and other significant debts.

Another option you have with Industrial Alliance is a traditional term life insurance policy for 10 or 20 year terms. This company even offers an Alternative T20 plan which allows applicants life insurance for a term of 20 years with guaranteed acceptance with no medical exam.

All of their plans have premiums that will never increase during the term of the insurance.

SSQ Insurance’s Term Plus

Offering policies with terms of 10, 15, 20, 25, 30 and 35 years, SSQ’s Term Plus gives you a wider variety of choice. The premiums are guaranteed and the term is renewable every five years without having to provide evidence of insurability.

Also, with evidence of insurability, you can convert your policy to a permanent policy up to age 70. The insurance amount may increase under the guaranteed insurability benefit, and individual, joint and multi-life coverage is available.

For those unsure of if they want a term or permanent policy, this plan gives you the option to choose without switching companies or polices.

Assumption Life’s Flex Term

Assumption Life also offers terms of 10, 15, 20, 25, 30 and 35 years and is designed for people ages 18 – 65. If you are seeking a benefit of $249,999 or less, you don’t need a medical exam to apply for Assumption Life’s Flex Term coverage.

Disability insurance under this plan can provide a monthly disability income up to $3,000. Meanwhile, critical illness coverage maxes out to $25,000.

Benefits from Flex Term may range from $50,000 and $4,000,000. Assumption Life guarantees their Flex Term life and disability premiums, won’t increase over time.

Weekly Personal Finance Roundup For May 8th 2015

May 8th, 2015
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This week on the LSM blog we featured Living Benefits expert Kelsey Blinkhorn's recommendations on critical illness insurance. Later in the week we put together a list of things that many of the world's most successful investors do in common when it comes to investing.

We noticed a bunch of great articles throughout the web on topics such as compound interest, frugality versus cheapness and the increase to TFSA limits. 

Bridget Casey shares the very cool story of Laurie Pickard, at student living in one of the poorest countries in Africa, who completed a series of MOOCs (Massive Open Online Courses) which made up the equivalent of an MBA program curriculum.

Sarah Milton from Retire Happy explains what the rule of 72 is regarding compound interest and how you can benefit from it.

Tawcan provides a poetic look into the meaning of frugality

Big Cajun Man wants to know if he is becoming cheap or if he is simply being frugal with this hilarious post

Boomer and Echo provide a financial makeover for this realistic scenario.

Mark from My Own Advisor takes a firm stance on the TFSA limit increase

Gail Vaz-Oxlade gives up some great actionable tips on how to plan ahead for not-so-routine expenses.

Kyle Prevost from Young and Thrifty explains how to diversify and allocate your assets without tearing your hair out.

Happy reading and enjoy your Mother's Day weekend!

7 Everyday Habits of The World’s Most Successful Investors

May 6th, 2015
Habbits Successful Investors

Investing is a lot harder than it sounds. For every success story out there, there are multiple stories of failed investments that are never told.

If you are a new investor looking to be successful, it’s important that you take a look at how some of the world’s most successful investors act and approach the industry.

Many of these aforementioned investors also share similar habits that have proven to be a key to their financial success. Let’s examine seven everyday habits that these successful investors all follow.

1. Set Goals For Yourself

Before you think about investing, set goals for yourself. These goals should answer some basic questions such as your reasons for investing and your expected financial returns.

Think of these goals as the guiding force for your investments. Once you have set your goals and follow them, your investment choices will become more focused and disciplined. Every choice you make should be solely focused towards accomplishing your goals.

2. Start Investing As Early As Possible

Contrary to popular belief, you don’t need to reach a certain age before you should start thinking about investing. It’s never too early to start investing. Especially if you are doing it to plan for your retirement.

Remember, investments mature over time. So, the earlier you invest, the greater your chances for a bigger payout in the future.

Many younger people put off at the idea of investing because they are under the impression that it takes a hefty principal sum to invest. This couldn’t be further from the truth. There are investment opportunities in the market for people in nearly every income bracket. All it takes is a little research to find out which investments suit your situation the best.

3. Avoid Changing Your Goals After You Invest

If you began your investments with certain goals in mind, try to avoid changing those goals.

This isn’t to say that you should never change your goals. After all, an individual’s circumstances and needs can gradually change over the course of their life. If you need to re-think your existing goals because of this, that’s fine.

But, if you try changing your goals impulsively, you might end up getting sidetracked. In today’s investment industry, you’ll be presented with a lot of risky choices that will promise huge payoffs. While you shouldn’t completely ignore these opportunities, never change your existing goals in order to accommodate those risky choices.

4. Take Responsibility For Your Investments

Always remember this: you are the one in control of your investments. Not your broker, financial advisor or anybody else.

While you can delegate the management of your investments to others, the ultimate responsibility for the well-being of your investments solely lies with you. It also goes without saying that you stand to be the most affected if your investments prosper or decline.

Monitoring your investments regularly, studying the market and making informed decisions are just some of the ways you can take responsibility for own investments and ensure that they work to your benefit.

5. Build Up Your Savings And Use Them Wisely

From cutting down on unnecessary expenses to learning to live on less money, there are plenty of ways to build up your total savings.

You obviously can’t be a successful investor if you don’t have any principal money to invest. That’s why it’s imperative that you save as much money as possible for your investments.

With that being said, never spend all or even most of your savings on investments (unless these are completely safe investment options with a guaranteed return of principal). For older investors who have built up their nest egg, segregated funds may be a good fit as they offer guarantees on the principal investment should there be a sharp decline in the market.

Remember, many investments can be a risky business. Even the best investors have taken their share of losses and failures. Before you invest, always ensure that you have enough money saved in an emergency fund for you to stay on your feet financially in case your investments take a loss.

6. Reinvest Your Dividends

Once you start to see your investments grow, it becomes really tempting to want payouts right away. After all, who doesn’t want to reap the benefits of their hard work, right?

But, unless you really need the payout, you’re much better off reinvesting dividends from your current investments. It goes without saying that reinvesting dividends have the potential to pay out much larger dividends in the future.

So, you’re basically trading smaller short term gains for bigger long term gains. That’s a trade off most successful investors are always willing to make.

7. Understand The Concept of Risk/Reward

Let’s be honest, most of the top investors in the world didn’t get to their current financial level by always playing things safe.

There are times where you will be presented with risky trade opportunities that project huge payoffs. This is where you will need to do the proper research required to determine whether the payoffs are worth the risk. Remember 'projections' are not 'promises' so exercise your own due diligence before putting your money at risk.

In most cases, you should aim to have a risk/reward ration of at least 2:1 on any trade. This ensures that any potential payoffs from this trade will be at least twice as big as a potential loss.

Critical Illness Insurance Expert: Kelsey Blinkhorn

May 4th, 2015
Kelsey Blinkhorn Benefits Group
Kelsey Blinkhorn From Blinkhorn Benefits Group

Kelsey Blinkhorn GBA, CHS, CPCA 

Blinkhorn Benefits Group

1. What Type of Critical Illness Insurance Do You Own?

I own a non-cancellable, level premium to age 75 policy with a face amount of $100,000. My policy includes both return of premium on death and return of premium on surrender.

2. What Factors Did You Consider When Determining The Coverage Amount

I purchased my policy at age 23. At the time, I determined the appropriate amount of coverage was between 1x and 2x my annual income.

3. Do You Think People Underestimate The Importance of Critical Illness Insurance And If So Why?

I do. Through medical advances, individuals are living through illnesses such as heart attacks, stroke and cancer. Critical Illness insurance provides the means to alleviate the financial stress when battling an illness. I think we would all agree that limiting financial stress would help in such a challenging time of one’s life. Focus should be on recovery, not on how you are going to pay your bills.

4. What Are Some Limitation Or Exclusions Should People Watch Out For?

With any insurance contract your enter into it is important to understand when your policy will pay and when it will not. The pre-existing condition clause, exclusion and limitation sections and illness definitions will help you understand when your policy will pay and when it will not. An experienced insurance advisor will help you navigate the various policies in the marketplace so you can make an informed decision.

5. If You Had To Choose Between Critical Illness And Life Insurance Which One Would You Choose And Why?

Both. Term life and term critical illness insurance are both relatively inexpensive. My advice is that some coverage is always better than none. Will $10,000 in your bank account alleviate some stress when battling cancer? You bet. You can always work within your budget to ensure you are covered both in the event of death and illness.

Weekly Personal Finance Roundup For May 1st 2015

May 1st, 2015
Weekly RoundUp 08

This week at LSM Insurance we published an infographic on insured annuities vs GICs. In this infographic we looked at the pros and cons of each and see which one provides the greater return for retirement income. 

With a new report out from Moody's Investor Service, we look at what could happen to insurers if the Bank of Canada keeps interest rates low

Finally, we reviewed Wealthing Like Rabbits by Robert Brown, a fun personal finance book that covers the topics of RRSPs, debt, mortgages and other aspects of personal finance. We are giving away three copies of the book with four ways to enter so make sure to check out the review

Barry Choi from Money We Have asks the question, is pet insurance worth it? He believes that setting up a pet savings account is a better alternative.

Jessica Moorhouse wrote an article on her blog Mo Money Mo Houses about her search for a house in Toronto and how she was lucky to get out early.

The Globe And Mail's Kerry Taylor investigates what a $1 million house looks like in Toronto.

Young And Thrifty gives 10 solid financial tips for newlyweds. My favourite point is to talk openly about your finances with your significant other. Communication is key in any relationship, especially regarding the finances. 

Fabulously Broke In The City wrote an article about what retirement means for her and how it would change her lifestyle. 

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