Hot Off the Web
WSJ has been prolific on good insurance related articles over the past week. In “Getting a deal on your term life insurance” Clements encourages you to review the cost of your current life insurance. Not only the prices have dropped precipitously over the past 10-20 years but the policies are now level term, i.e. premiums are not changing annually. If you have an “older’ policy you may want to get a quote on a new one (Quotes are available online from many source for both Americans and Canadians, often without identifying yourself). The rates in the U.S. are significantly lower than in Canada! (This may be partly due to the rating of the quoting company but I suspect it is mainly due to the more competitive nature of the U.S. market). Also try to get one which allows conversion to a cash-value policy without a medical. Do not cancel your current policy until you have a new one! In “Are you over insured?” McQueen not only encourages you to look at the price of your current term policies, but also look at identity-theft, critical illness, accidental death, credit disability, road-side assistance, trip cancellation insurance and question their cost-benefit. And finally, Opdyke discusses how he made the decision to purchase long-term care insurance in “Thinking about long-term care…now”
On the subject of investing Rob Carrick of the Globe and Mail had a couple of excellent articles in the past week. In “For your RRSP, take a page from CPP” he shows how individual investors can build a portfolio just like the CPP (asset mix) by using only ETFs. (My personal approach on the equity side is very similar to this one both in asset mix and implementation). Not a bad model to follow. Whereas in “Onslaught of ETFs clouds the allure of tried-and-true” he cautions you about ETF clutter and suggests that you stay away from the new narrowly sliced and diced ETFs. The WSJ’s Lauricella in “When the time comes to tap home equity” covers the results of a study available at www.fidelityresearchinstitute.com on the pros and cons of the various options available to tap into your home equity when you need to do so in retirement. Options explored are: sell and buy cheaper, sell and rent cheaper, rent home and rent cheaper, obtain home-equity loan, reverse mortgage.
And finally “A new trick for avoiding estate taxes” is suggested by Ron Lieber. The idea is to use the new rule which permits $60,000 to be gifted by each grandparent to each grandchild’s 529 plan (i.e. five years of gifts at once in the US). Therefore two grandparents could eliminate estate taxes on $480,000 if they had four grandchildren.