There are numerous types of life insurance products available on the market today. When you're looking to insure a loved one, the choices can be overwhelming and it's not hard to be sold a policy that is fat with sales commissions and may not fully meet your personal needs. To help you navigate the confusing world of life insurance, here are three types of policies you should probably avoid:
1. Whole Life Insurance
While having an impressive name, whole life insurance policies may leave you lacking the coverage you need. The premise of whole life policies is they combine life insurance with an investment portion that builds up a cash value over time. What your insurance agent isn't telling you is that the management fees on the investments can erode much of their growth. Getting a term life insurance policy instead and investing the savings from the lower premium may see you get ahead in the long term.
If you have dependants to support, then shop around and get a term life insurance policy. Term life is pure life insurance where you pay an annual premium to receive a decided amount of coverage -- much like automobile insurance.
See How to Buy Life Insurance for some easy-to-follow tips.
2. Mortgage Life Insurance
It's seems like a good idea to sign up for life insurance right after the bank gives you a mortgage. No one wants to leave their spouse with a huge unpaid debt. But think again before buying into this policy. Mortgage life insurance generally only covers the outstanding principal on a mortgage should the policy owner pass away. The premiums stay the same even as the mortgage reduces as you pay it off. Does it make sense to pay the same premium for less and less value? Probably not. By skipping mortgage life insurance and shopping around for a term life insurance policy, you can cover your family above and beyond the mortgage for half the cost. See Ellen Roseman's Perils of a mortgage life policy for further details.
3. Life Insurance for Kids
You want to be the best parent possible, so right after having your baby you are sold life insurance for your child. This happens to many new parents as they navigate through the myriad costs of parenthood. But this is one cost you don't need to incur.
The general purpose of life insurance is to serve as income replacement for the insured’s dependants if the family breadwinner is to pass away. Because children are dependants, it makes little financial sense to insure them.
Many parents buy these policies because an agent sells them on the investment aspect of a cash value policy. But if you want to open an investment your child can really benefit from, put your money into a Registered Education Savings Plan (RESP) for your child’s post-secondary education. Unlike a cash value life insurance policy -- which can boast lucrative commissions for the selling agent -- an RESP has real advantages where the earnings are sheltered from tax until drawn out for the child’s education.
Your Turn: Do you have life insurance? Were you sold one of these policies?
The hustle
and bustle of the busy holiday shopping season is enough to challenge the most
experienced shopper. But when bringing along the kids, manoeuvring the gang through
crushing crowds and endless line-ups could try the patience of even the coolest
parent. These seven tips will help you avoid the tantrums and time-outs so you
can share the spirit of giving with your children—without the stress.
- Plan the day in advance. Make sure the kids are well rested and
fed, and prepare them with the objectives for the day so there are no
surprises. Shop during off-peak hours or arrive early before the stores
open to avoid parking stress. Bring water and snacks so you can easily schedule
breaks to rest and recharge. If you have too many purchases to carry, take
them back to the car, but be sure to lock them in the trunk or out of
sight.
- Make a list and check for deals. Making a list of everyone you’re buying
for this year will help you to pick the perfect present for each. If the kids
are old enough they can visit Flyerland.ca to choose gifts, then compare
prices at your favourite retailers to find the best deals before you hit
the shops.
- If you are on a tight budget, choose cash over credit. Determine your budget and pay
with cash—using credit cards makes it easier to overspend. A helpful hint
is to put the gift money for each recipient in a separate envelope to
avoid the temptation to spend more. The best part is there will be no
January credit card statement surprises!
- Teach kids good shopping habits. If your kids are old enough, involve them
in the shopping process. Give them a budget and show them how to compare
prices. This can help children learn the value of a dollar and how to
prioritize the things they really want.
- Create extra-special handmade gifts. Do-it-yourself presents from the kids are
as fun to make as they are to give! Check out the Michael’s and Fabricland
flyers on Flyerland.ca for creative and thoughtful ideas then plan a craft
day to wrap up gift giving for your entire list.
- Shop with a friend. If you have friends with children suggest shopping together. That
way, if the kids get hungry or restless, one parent can stay with them,
allowing the other time for a little solo shopping.
- Know when to call it a day. Have realistic expectations of what can
be accomplished. You may even want to plan several shorter trips rather
than feel pressured to get everything done at once. And don’t forget to
have fun!
By Debbie Frye, General Manager, Flyerland.ca
Before the
snow begins to fall and the winter winds blow, it’s time to think about keeping
your family warm and safe at home and in the car during the long Canadian
winter. But the high cost of renovations, repairs and maintenance can leave you
out in the cold. These money saving tips will help you weather any winter storm
without blowing your budget.
- Spruce up your home for the holidays…for less. If you’re hosting a holiday
event, you’ll want your home looking its festive best. Check out
Flyerland.ca for seasonal deals from
The Brick on furniture, appliances, electronics and home décor from
Michaels and Bouclair that will add sparkle to any room
- Save on home improvements now. Renovating the bathroom, installing
hardwood floors or finishing the basement are great gifts to give
yourself. Many companies are offering special deals and payment plans so
you can save before the HST comes to Ontario next year. Find home improvement offers from
Reliance Home Comfort on Flyerland.ca.
Time is running out to take advantage of the Home Renovation Tax Credit.
Check the HRTC site to be sure your project is eligible for the credit—and
don’t forget to keep your receipts!
- Maintain your home to avoid expensive emergency repairs. Before old man winter comes
knocking, be sure your home is in tip top shape. For heating/air
conditioning inspections, chimney and duct cleaning, basement
waterproofing and more, visit the coupon section of Flyerland.ca for Clip
or Click coupon deals in your city.
- Clean up your lawn and garden. When preparing your home for winter,
don’t forget your yard. Be sure to rake up the leaves, otherwise the grass
can suffocate which means you’ll spend more money restoring your lawn in
the spring. Store patio furniture and other equipment to avoid unnecessary
wear from harsh winter weather. Remember to put away the garden hose and
turn off the outside water supply—freezing temperatures can cause pipes to
burst, and that’s a costly repair!
Home Depot and Canadian Tire have weekly cost saving offers just in
the nick of time.
- Plan car maintenance early. Last year auto service centres ran out of
snow tires, so this year they’re offering great deals now to encourage
people to plan ahead. If you wait you could miss out on the savings and
have to buy more expensive tires. While you’re there, be sure to have a
full winter car inspection to help avoid a breakdown or other repairs down
the road. You can also check online at Flyerland.ca to see GM’s Winter
Savings Flyer.
By Debbie Frye, General Manager, Flyerland.ca
Do you know your score? When you're looking for a loan do you know how well you'll score with lenders before setting foot in a bank?
If you're like many Canadians, chances are you've never requested a credit report or seen your credit score. In a recent survey, the Financial Consumer Agency of Canada found that only 15 percent of Canadians have requested a credit report, while only 24 percent know their credit rating. Startling numbers when you consider the vital importance of this information to your financial health. Here's a quick guide to your credit report and credit score.
What is a Credit Report?
A credit report is a "snapshot" or profile of your credit history. It shows how often you pay your financial obligations, if you miss credit card payments, or if you've gone over your credit limit. Your credit report contains these details about you:
- Personal: Your name, current and previous address(es), Social Insurance Number (SIN), current and past employer(s), date of birth.
- Credit: Any credit you have -- such as a credit card, line of credit, a loan, or a mortgage.
- Banking: Any accounts you have, history of non-sufficient funds (NSF).
- And more: Any bankruptcies, collection agency interactions, or credit report inquiries made by yourself or a lender.
A credit report is created when you first borrow money or apply for any form of credit. Over time, your banks, credit unions, and retailers send updates to credit reporting agencies about your payment habits. This information is documented in your credit report and can be made available to lenders, landlords, and employers when you're applying for credit, housing, or a job.
What is a Credit Score?
Your credit score is a number between 300 and 900. Higher numbers show you're very credit worthy while lower numbers indicate a credit risk to lenders. Most Canadians don't know their credit scores, but finding out this information can help you significantly. If you have a high score, you can use it to negotiate lower interest rates on loans. On the other hand, finding out you have a low score gives you the opportunity to improve it before dealing with lenders.
Check out this handy Loan Calculator so see how higher interest rates can cost you! So what's a good credit score? The majority of Canadians score between 700 and 850 which is considered to be a very good credit risk.
Checking Your Credit Report and Credit Score
It's a good idea to request a copy of your credit report once a year to verify the correctness of your personal and financial information. Checking your credit report can also help protect you against identify fraud since you'll see any unusual credit activity on your report.
In Canada there are two major credit reporting agencies, they are: Equifax (www.equifax.ca) and TransUnion (www.transunion.ca). Both agencies will mail you your credit report for free, or you can request to see it online for a fee. Obtaining your credit score from either agency costs around $25 and must be done online. Doing this also gives you access to your credit report.
Your Turn: Have you ever checked your credit report or found out your credit score? Were you surprised?
As the
crisp autumn air turns frosty, it’s time to outfit the family with winter gear.
From coats, boots and snowsuits, to hats, scarves and mittens, plus sports
equipment for wintry outdoor activities, the costs can really snowball! Getting
the entire family ready for this snowy season can be a slippery slope to
overspending. These tips will help keep the whole gang warm and cozy while
keeping cold cash in your pocket.
- Shop early! After the first snowfall everyone will be scrambling to buy much
needed winter items. If you wait too long you may not get the best
selection, be forced to buy the wrong size or spend too much.
- Watch for sales. Visit Flyerland.ca to view the flyers for your favourite
retailers. Be sure to check the site on Fridays for new stuff on sale and
the top selection. National Sports, Bass Pro Shot, Wal-Mart, Mark’s Work
Warehouse, Zellers, Sears and more are warming up to winter with bargain
prices.
- Buy good quality. If you have several children, be sure to buy the best quality
items you can afford so they will last through more than a few winter
seasons.
- Swap with friends. Host a potluck dinner and invite friends to swap their children’s
clothes from last year. This works especially well if the kids are
different ages.
- Choose gently used. Winter clothes are durable and don’t wear very quickly, so for big
ticket items try gently used. Stores like Once Upon a Child and Value Village offer first-rate deals on second-hand
clothing to keep your little ones toasty warm.
- Try trade-in plans for sports equipment. Kids outgrown their gear so
quickly, and with expensive sports like skiing and hockey the costs can
really add up. Stores like Play it Again Sports offer plans where you can
trade-up to larger sizes on equipment each year, and that can score you
great savings.
- Sell items online. Fall is a good time to clean house, so dig out last year’s winter
stuff and advertise it online or in the local paper. You can use the money
you earn towards purchasing cool new items.
- Shop the end of winter sales. Mark it in your 2010 calendar for
February or March to shop the end of winter blowout sales. This is the
ideal time to save big on big ticket winter items and avoid the rush next
fall.
By Debbie Frye, General Manager, Flyerland.ca
Does paying off your credit card ever feel like a losing battle? It's no wonder when you consider all the sneaky tricks, hidden fees, and inventive ways credit card companies ding your hard-earned dollars when you purchase with plastic.
Sure, the new credit card rules may help protect Canadian consumers against some gouging practices, but these five tricks are probably here to stay.
1. Paying only the Minimum
Credit card companies love to highlight the Minimum Payment Due on your monthly bills. It's a trick they use to stretch out your payments for years, costing you hundreds and even thousands of dollars in interest. Under the new rules coming in January, lenders must show you how long it will take to pay off your full balance with minimum payments. But why wait?
Check out this Credit Card Calculator to get a head start today and see the real cost of paying only the minimum. Results may shock you.
2. Low Introductory and "Teaser" Rates
Credit card companies like to offer introductory low interest rates on newly issued cards, or on balance transfers to your existing card. If you tend to carry a balance, this kind of offer may save you money. But if you're not careful, these low "teaser rates" may come with unexpected surprises, says the Financial Consumer Agency of Canada:
- You can lose the interest-free period on new purchases: Skip paying off the whole balance and you'll end up paying the credit card's regular, higher rate.
- Your payments will be applied to the lower-interest-rate balance first: Most issuers apply your payments to balance transfers and cash advances before they apply them to purchases.
Before applying for an introductory offer, make sure you understand all terms and conditions. Ask the issuer what types of transactions the introductory rate applies to, when the introductory period ends, and how your payments will be applied.
3. Credit Cards on Campus
If you're a student heading off to campus, then be aware that credit card companies will have a welcoming booth waiting for your arrival. These companies like to offer free swag -- like a Frisbee, T-shirt, or even a sandwich -- in exchange for your signature on a shiny new credit card application. Don't fall for this trick that could trap you into years of debt. If you need a credit card, plan ahead by shopping for better rates, and get a lesson in paying off the balance from your folks. If you need a Frisbee, then just bring one with you.
4. Paying an Annual Fee
If you're paying an annual fee for the privilege of charging in plastic, then maybe it's time to reconsider your credit card. Many gold and platinum credit cards charge a sizable annual fee billed directly to your statement, money that could otherwise be used to pay down debt or saved for something fun. Since there are several credit cards with no annual fees on the market, pass on the prestige cards by making the switch to save some cash.
5. Staying loyal to "Loyalty Programs"
The cost of a "free" reward ticket may be costing you a small fortune in fees and a higher interest rate. Do yourself a favour by doing the math -- if the fees paid for your card add up to more than the free reward, then find yourself another card with more attainable perks. It makes little sense to stay loyal to a credit card program that just doesn't fly for you.
The FCAC has a long list of Service Fees on Credit Card Transactions to help you navigate the expense of paying with plastic.
Your Turn: Is there a credit card trick that has cost you?
The holiday
shopping season will soon be here. If you were a little naughty last year and
waited until the last-minute to get organized, imagine how nice it would be to get
ready early and avoid the stress of the holiday rush. These tips will help you
plan ahead and get into the holiday spirit, giving you more time to enjoy the
festive season with family and friends.
- Make your list and check it twice. Jot down every person you’re buying for this
year—don’t forget the secret Santa exchange at work and your children’s
teachers—and keep to the list.
- Set a budget…and stick to it. Decide how much to spend on each person and
stay with the plan. Even a little overspending on some people can add up
to a lot. Visit Flyerland.ca for lots of great gift ideas at super savings.
- Big family? Be creative. A big extended family can blow any
holiday budget, but there are clever ways to save. Pick names so each
person only has to buy one gift within a set budget.
- Buy out of town presents early. If you’re mailing gifts, be sure to buy
and send them early to avoid paying premium shipping costs and to ensure
they arrive on time for the big day.
Don’t forget the ease of Gift Cards, Shoppers has a terrific
variety
- Save with do-it-yourself gifts. Baking breads, cookies and candies or making
homemade items with the kids can be thoughtful presents for teachers, coaches
and other instructors. Michael’s offers lots of jolly ideas.
- Organize group gifts at work. When buying for the boss, involve the
entire team instead of making one person responsible. A fun idea is to
plan a theme gift and have everyone contribute.
- Set aside time to send holiday greetings. Make a list to determine how
many cards to buy then set aside an afternoon or evening to write and send
them. You may want to design your own greetings on the computer or send
online cards this year.
- Plan for holiday parties. If you’re hosting the annual yuletide get
together decide early where it will be held, as popular venues book up
fast. You can save on home parties by enlisting the help of others—plan a
potluck or provide the food and ask guests to bring their own beverages.
If you’ve been invited out, don’t forget the hostess gift. Check
Flyerland.ca for original ideas—and if you see a great deal, be sure to
stock up!
By Debbie Frye, General Manager, Flyerland.ca
Standing in the supermarket checkout line waiting for your food to scan can be as much fun as watching paint dry. But if you watch carefully and spy a scanner price error, you could score that grocery item for free.
Mistakes on electronic price scans are common at the grocery store. The U.S. Federal Trade Commission has found that errors occur in 1 out of every 32 regularly priced items. Errors are more common on sale items, with 1 out of 28 items being overcharged to consumers. The cost of being overcharged at the till can add up to many dollars per month per family.
But in Canada, spotting a scanner error could save you up to $10 per item. The Retail Council of Canada has a Scanner Price Accuracy Voluntary Code that states:
- If the correct price of the product is $10 or less, the retailer will give the product to the customer free of charge; or
- If the correct price of the product is higher than $10, the retailer will give the customer a discount of $10 off the corrected price.
As a consumer, all you have to do to qualify is watch as your groceries are scanned at the checkout and verify that prices are accurate. If you see an error, don’t be afraid to ask the cashier to give you the item for free. If your cashier is unaware of the policy, ask for a manager or go to the customer service desk to claim your free food.
Over the years I've used the Scanner Price Accuracy Voluntary Code to my benefit. This year alone I've claimed at least $20 in free groceries due to price scanning errors. At times I've had to explain the code to confused cashiers, but many times I've walked away with free food by just asking. Many participating supermarkets post this code at checkout, so don't be wary of asking whenever you see a mistake. Being overcharged at the till can really add up!
The occasional free food item is great, but to help you keep weekly grocery costs down be sure to plan ahead with a shopping list.
Download this free Printable Grocery Shopping List to help you:
- Save money by curbing impulse food buys.
- Identify healthy and frugal foods on a single master list.
- Save time grocery shopping.
- Never forget another grocery item.
See the Retail Council of Canada for a list of stores that are committed to accurate scanner pricing with the Scanner Price Accuracy Voluntary Code.
Your Turn: Do you spy scanner price errors at the grocery checkout? Do you say something about it?
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October 2009
