Are you self employed? Have an income but it does not reflect your lifestyle? Let’s face it - you may have a number of expenses that reduce your "taxable income." So a traditional disability policy will not cover you properly. The solution is consider getting a policy (disability) that will cover your mortgage payments 100 per cent - even if you show no income! This can cover the life of your mortgage up to 25 years (or five years, or what have you). After you satisfy the requirements for a six-month total disability, your Blue Cross coverage takes care of the mortgage payments and protects you from perhaps draining your RRSPs or savings account.
Even if you have a (disability) policy currently this will not affect any payouts you may be given. In effect, your lifestyle would change little. The cost for this is about 1 per cent of the mortgage payments. As an example, a $200,000 mortgage with payments of $1200 per month would cost $475 to cover 60 months of mortgage payments or $72,000!! (assuming the person is 35 years old) At age 45 this would be $1,152 to cover the $72,000 or 60 months, still not a bad price for no medical! If you had to use your RRSPs after taxes even at a low tax rate this will cost you over $90,000 after you paid your taxes!
If you structure this properly this could be tax-efficient - see my other website, www.mortgageplans.ca
Please contact me for more detail!
Brian Poncelet, CFP
(905) 338-7689 (24hrs)
brian@Disability Insurance Quotes
***Owing to limited resources and time commitment, only people with family incomes of $110,000 or more
should call. (OR $60,000 in RRSPs)