Connect with us

Finance

Private Retirement Provision

Published

on

Private Retirement Provision. Various strategies can be selected for long-term asset accumulation depending on the individual life situation, age and willingness to take risks. In addition to securities, funds or real estate, insurance is also offered as a pension product.

The essentials in brief:

  • To cover your financial needs in old age, there are various private pension strategies.
  • Which variant is best for long-term asset accumulation depends on factors such as your individual life situation, your age and your willingness to take risks.
  • With the help of a capital life insurance, a private pension insurance or a unit-linked life and pension insurance, you can save up for your retirement.

The private retirement provision is basically nothing more than a long-term wealth accumulation. Depending on the particular life case, various tactics may be picked. Insurance is also sold as a pension product, in addition to shares, funds or real estate. Age and willingness to take risks also play a decisive role in the choice.

Endowment life insurance

Endowment life insurance always includes two contracts: term life insurance to protect relatives and a savings plan with a long term. At many companies, however, customers do not find out how the premium is divided between the two parts of the contract. At the end of the term, the payout is made up of a guaranteed amount and a non-guaranteed bonus.
Customers of low-income companies have experienced in recent years that the surpluses sometimes tended towards “zero”. Unlike in the past, the contributions can no longer be deducted from tax.

PLEASE NOTE WITH THE ENDOWMENT LIFE INSURANCE:

  • If you are not pretty sure whether you can keep up the term, you should not take out endowment life insurance. Because: canceling beforehand means loss!
  • Survivor protection can also be topped up with a considerably cheaper term life insurance.
  • Those who primarily want to save are better off choosing other forms of savings. There is usually the advantage that the paid-in capital can be accessed at short notice. And this with better and more calculable profits.
  • Endowment life insurance can be useful as part of a company pension scheme, for example as direct insurance. Then tax advantages beckon to the insured.
  • Anyone who decides on capital-forming  life insurance despite the disadvantages shown should pay the contributions annually. That saves surcharges. In an enclosed  accidental death insurance can be dispensed with. It is unnecessary and too expensive.
  • Agree to include the additional insurance “Exemption from contributions in the event of occupational disability”. In the event of occupational disability, the insurer will then continue to pay the contributions for the entire contract. This is not absolutely necessary if you already have (independent)  occupational disability insurance and the agreed pension is so high that the contributions can be borne without any problems.
  • High-performing companies should always be chosen to take out insurance. The experts at the consumer advice center and insurance advisors provide an overview of the market.
  • Advice and current contribution comparisons can be obtained from the advice centers of the consumer advice centers. Many also offer computer-aided, specific price-performance comparisons. Judicially approved / officially approved insurance advisors also provide an overview of the market.


Private pension insurance

When you opt for a private pension fund, you will be given an old age pension. But for the buyer, only half of the payout is certain. The other, non-guaranteed part, the so-called “profit annuity”, can be reduced by the insurer, for example depending on its business success. Private pension insurance usually offers two types of contract: the deferred pension and the immediate pension.

Please note with private pension insurance:

  • Anyone who takes out deferred pension insurance, ie the pension payment does not begin until a later point in time, must bear in mind that if they terminate prematurely they must expect major losses.
  • The contribution to a pension that starts immediately, ie the policyholder pays a single premium into the contract and immediately receives the monthly pension payment, can no longer be reclaimed. Therefore, only part of the assets should flow into the immediate pension in order to remain financially flexible.
  • If you agree to a so-called lump-sum option for the end of the savings phase with the deferred pension insurance, you can then decide shortly before the start of retirement whether you want to collect the savings in monthly bites or in one fell swoop.
  • If the repayment of the contributions plus the accumulated surpluses in the event of death during the savings phase or a pension guarantee period after the start of the pension payment is agreed, the surviving dependents may still have some of the savings after the death of the insured person.
  • Contributions should be paid annually. That saves surcharges.
  • With the deferred pension insurance,  agree to include the additional insurance “Exemption from contributions in the event of occupational disability”! In the event of an occupational disability, the insurer will then continue to pay the premium for the entire contract. This is not absolutely necessary if you already have (independent) occupational disability insurance and the agreed pension is so high that the contributions can be covered without any problems.
    High-performing companies should always be chosen to take out insurance. The experts at consumer advice centers and approved insurance advisors will give you an overview of the market.
  • Advice and current contribution comparisons can be obtained from the advice centers of the consumer advice centers. Many also offer computer-aided, specific price-performance comparisons. Judicially approved/ officially approved insurance advisors also provide an overview of the market.

Unit-linked life and pension insurance

The difference to other forms of life and annuity insurance with the unit-linked variants is that the deposited money is invested in investment funds, for example stock, pension or real estate funds. Since the customer usually decides for himself which funds he wants to invest in, he can change his choice at any time. With this type of investment, however, he alone bears the risk!

As a rule, there is no minimum payment, as is the case with endowment life insurance. What is paid out is what the fund has generated, and that is initially uncertain. Fund policies with high-yielding companies may again become a recommendation for more risk-averse investors.

Please note with unit-linked life and pension insurance:

  • If you need a fixed amount at a certain point in time, you should refrain from fund policies, as the rate is not always the same.
  • Before signing a contract, it is advisable to take a look at the so-called “zero line”. This is a development curve of the fund shares, in which a possible increase in value is not taken into account. Anyone who compares the zero lines of several providers receives an indication of where the contributions are likely to be better placed.
  • Contributions should be paid monthly. If you pay annually, there is a risk that you will buy when the fund price is particularly high. A unit-linked life insurance does not need to include an additional accidental death insurance. It is unnecessary and too expensive.
  • However, agree to include the supplementary insurance “Exemption from contributions in the event of occupational disability” or take the contribution into account when taking out a disability pension.
Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Finance

Top 10 tips for buying student insurance

Published

on

By

Don’t wait until the last minute

This is the first tip mentioned as it is also the most important. Although your school may not require you to have a plan until the day of school, it’s never a good idea to take too long on something as important as health insurance. It is best to start looking for a good policy early, even before you leave your home country, which ensures coverage from the moment you arrive at your destination.

Buy a plan that meets your visa requirements

Many places in the world (such as the United States) have health insurance requirements that you are required to meet to enter the country, depending on your visa. Students on an F1 visa do not have to follow federal regulations, and instead must follow the guidelines given by their institution. J1 visa holders, on the other hand, must comply with a strict list of government mandates, including coverage of repatriation, evacuation along with certified minimum periods of validity.

Do not forget the requirements of your school

Your school is aware that not all insurance plans are the same. Because of this, many schools have created an insurance waiver form, listing the requirements that an international student’s plan must meet to be considered comparable.

Find out if you need a waiver form

Some schools require not only that you purchase an international health insurance plan, but also that your insurance company complete an insurance waiver form (also known as a Conformity Form) to demonstrate that you have adequate coverage before registering for classes. After making your purchase you just have to fill out the student part of the form and send it to your insurance company so they can complete it. From there, the company will complete the rest of the form, sign at the bottom, and then email or fax a copy directly to the school.

Check your eligibility

Each health insurance plan has certain criteria that must be met in order to qualify. International student insurance options require a current student visa, but will not require insider information, such as a social security number. Sometimes these plans require you to attend school for a certain number of hours per week in order to remain eligible, so make sure you meet each of the plan’s eligibility requirements before purchasing.

See the specific benefits

Since you will most likely have the same insurance plan throughout your entire school experience, it is imperative that you know exactly what the plan does and does not cover. For starters, make sure your plan has traditional coverage like doctor visits, hospital stays, and prescription drugs, with the policy maximum high enough for you to feel comfortable with. Also, your international student insurance plan should come standardized with travel benefits like emergency medical evacuation and repatriation of remains.

Don’t spend too much

Although no one expects the cost of insurance, international student health insurance is generally affordable, considering that students are often younger and in good health. In addition to the premium each month, it’s important to take note of any out-of-pocket expenses you may incur as well.

Know your documents

Having a plan is important for your health, but as mentioned above, it is more likely that you will also need to comply with the requirements, either from the school or the country. Often international insurance plans, like our Student Secure plan, offer a visa letter with your purchase, but in case your consulate or school requires a different document it’s good to know what the insurance company offers. Not having the necessary documentation on time could delay the processing of your visa or prevent you from registering for classes.

Check how long you can have the plan

Generally, plans made specifically for international students can be renewed for up to 4 years, but some plans like our Student Health Advantage plan can be maintained for up to 5 years. If you’re in a study abroad program for less than a year, a travel plan would give you traditional medical benefits, like doctor visits, in addition to benefits like emergency medical evacuation. One of these plans is the Atlas Travel plan, with prices as low as $0.79 a day.

Check your cancellation policy

Life can be unpredictable. Your school may not approve your alternate insurance plan, your visa may be denied, or you may have to return home unexpectedly for a family emergency. In the event that you no longer need your insurance plan, it’s important to understand the cancellation terms so you know if you’re eligible to receive a refund and stop future payments. Normally if you cancel your plan before the effective date you will be issued a full refund, but after this day cancellation fees may apply.

Continue Reading

Finance

Saving Money For Children And Grandchildren Makes Sense

Published

on

By

When it comes to saving for the education of the children or grandchildren, different products come into question, depending on the investment period, the desired flexibility and risk tolerance. With us you can read whether products are actually suitable for this and what advantages and disadvantages they have.

Setting the course

Before doing business, the first question you can ask yourself is why would you want the next generation to spend money? Did the grandparents give any money, should an inheritance be invested or do you just want to start with a savings plan to put something aside – as a start-up aid after finishing school and training? Depending on the occasion, goal and your expectations of the return on investment, there are various options.

  • Save for the next bike or a bigger gift in a few years

If you need the money in just a few years and don’t want to take any risks, not even for higher returns, then stick with a simple savings account or fixed-term deposit account.

  • Invest money for a few years, for example for the education of the children

If you are not dependent on the money for a longer period of time, then slightly higher returns are possible. First, banks pay higher interest rates the longer you invest the money. Take a look at the difference between a three-month fixed deposit and a ten-year savings bond. The savings bond is just as secure.

Important : Fixed is fixed, there is usually nothing to be done before the end of the term. In addition, for a longer period of time you may be able to invest the money with a little more risk, for example through an investment in the stock market, because you have time to sit out a bad phase. You can find out how to do this below. By the way, instead of an intangible financial product, you can also pay your children or grandchildren for music lessons or the club fee for sports, to name just a few alternatives. Investing in children’s education can also be an option that, in the long run, may benefit the child even more than an abstract investment.

WHAT “CONSULTANTS” LIKE TO SELL

The marketing of the financial institutions has long recognized the young target group – for customer loyalty but also as a lucrative source of income. Products have been specially created that are specifically offered to parents, but also to grandparents.

  • Education insurance, child policy, child provision

If you expect this insurance to cover your child’s education, then you are wrong. Because unlike your house or your household effects, you cannot insure your training against risks. Policyholder and contributor is usually a parent or grandparent. The service is due at the end of the contract. In most cases, this is based on the beginning of vocational training or studies. If the parent or grandparent dies before all contributions have been paid, the full benefit will still be due. In essence, there are several benefits: protection against the financial consequences of the death of the parents or grandparents, and an investment for the child. For many products, additional risks such as accident or disability are insured to a certain extent. Each insurance service costs extra.

We advise against combining different services in this way. If you want to cover the risk of death or accident, then you can. Think about what service you need and inquire about your own insurance for this purpose. The insurance cover for these products is not a perfect fit; it often does not cover possible risks as required. In addition, a price-performance comparison for the individual components is not possible and the product is not flexible. For example, it is not so easy to have the credit before the end of the contract or to suspend saving for a long time. And if this does work, then it is often associated with financial losses. To make matters worse, high acquisition and administration costs also consume the return on these contracts.

  • Pension insurance, generation policies

When it comes to old-age provision, intermediaries like to sell long-term pension and life insurance policies or so-called generation policies. The marketing departments of the insurers have come up with different names for these products. There is a simple reason why these products are popularly sold: The commission is calculated from the sum of the payments over the agreed term. The longer the term, the higher the commission for the agent and the less money is actually invested, especially in the first few years of savings. Retirement provision is primarily wealth accumulation, and there are other products such as ETF savings plans and bank savings plans (see below) that are much cheaper to get.

  • Home loan and savings contracts

New home loan savings contracts are currently not a profitable investment. The credit interest rate is only slightly above zero percent and if you subtract all costs from the interest, it no longer pays off as a savings contract.

Home loan and savings contracts are often sold because the brokers receive a commission for them, the so-called acquisition fee. This is usually one percent of the home loan and savings amount, and there are also annual fees.

  • Time deposit plus mutual funds

Some financial institutions offer higher interest rates for a limited period as part of promotional weeks if you also invest money in mutual funds. But be careful: you basically pay the higher interest out of pocket because you have to pay a front-end load to buy the mutual fund. This is the commission that the bank receives from the fund company. In addition, the bank will continue to receive commissions in the future based on the amount you have invested in the mutual fund. This is the sales follow-up commission, also known legally as “donation”. The excess interest is usually over after three months, whilst the new expenditures in the portfolio, at the detriment of the revenue, continue to have an impact for a long period.

This is how you can save with simple products

Children can learn how to handle money if they understand how to save. Savings books or overnight money accounts are particularly suitable for this. Both are straightforward and pose no risk. With the help of the savings account, the child can see at any time how much money he has already brought to the bank.

  • Savings books, overnight money and time deposit accounts

Some banks offer slightly higher interest rates for child accounts as part of limited investment amounts. With direct banks that do not have branch sales, even higher interest rates are possible here and there. If the child should also experience saving themselves, then a local institute is probably the first choice. After all, they also invest a lot in their marketing budget for the young target group by luring them to World Savings Day every year with promotional gifts. It’s not entirely selfless, of course, so watch out for the next local advertising campaign. After all, the bank makes a living from selling its products for fees and commissions and from issuing loans.

  • Bank savings plans

A bank savings plan is basically a savings account that you deposit into on a regular basis. In the current low interest rates, the range of bank savings plans is very manageable. However, some financial institutions still offer these products specifically for minors (e.g. as educational savings). You should pay attention to the contractual characteristics in doing so: under what circumstances is there an additional interest rate or even a bonus interest rate that depends on the term? Does the credit interest decrease if a certain investment amount is exceeded?

Can the rate be changed or suspended? Is an early (partial) termination possible or only with lower interest rates? Here, too, the money is safe, but the earnings opportunities are very limited.

Continue Reading

Finance

Car Financing: Everything You Need To Know

Published

on

By

Does the arrival of spring make you want to buy a new vehicle? The process of buying a car is rarely done without financing. Do you find the field of car loans complex? To help you understand the basics of financing at a car dealership and get your bearings, here’s some information. Already ready for a purchase, apply now!

Credit rating: the basis of your loan
The first step is to validate your credit rating. This is the basis for all loans. The higher your “score”, the easier it will be to get a loan for your future car. What is it based on? If you are a good payer (e.g., cell phone payments, credit card payments, etc.), your score will remain at a good level. As a general rule, if you have access to credit and your payments have been made on time, you will find it fairly easy to obtain the financing you need for your purchase.

  1. I have never obtained credit
    If you have never applied for financing, there are several ways to access credit, the two most common being

Option 1: Use a co-applicant (endorser)

The dealer will check the credit rating of your co-applicant. To endorse you, he or she will need to:

Have a good credit history ;
commit to guarantee the loan in case of default;
In addition, you should know that the endorsed loan will appear on your credit report as well as theirs.

Option 2: Join the First Time Buyer Program (when available)

This program allows you to obtain financing, provided you meet certain criteria (which vary from one manufacturer to another).

For example, the applicant may have to :

Provide proof of employment for at least 3 months and proof of income;
deposit an amount of cash;
respect a maximum amount to borrow for a first loan.

Did you know that? Applying for credit several times in a short period of time can hurt your credit rating. For example, applying for a car loan, furniture, a house, credit cards in too many applications in a short period of time can make future creditors more cautious.

  1. I’ve had trouble with my credit rating in the past
    Have you borrowed in the past, but were unable to meet your payment obligations? It is still possible for you to obtain a loan through your dealer’s second and third chance credit. Of course, a variety of different criteria must be met, depending on the financial institution. For example, obtaining the loan could be conditional on the signature of a co-applicant or a considerable down payment to demonstrate your commitment. Did you know that? A second or third chance credit loan can help you gradually rebuild your credit rating. Financing a vehicle, considered a long-term loan, will show creditors your good will to respect your commitments. However, you must be rigorous and maintain your payments until the end of the loan!
  2. Interest rates: what are the differences?
    There are 2 types of rates, usually associated respectively with the purchase of a new car and a used car.

Preferred rates

Usually reserved for new vehicles, most manufacturers’ rates are between 0% and 3.99%. The interest rate offered at the time of your purchase will be set by the manufacturer depending on the model of vehicle chosen and the term. It will be approximately the same across Canada.

Standard rates

Usually reserved for used vehicles, they vary between 3.69% and 9.99%.

Three main criteria usually determine the standard rates, which can be fixed or variable depending on the financial institution:

The year of the vehicle: from a certain year, fixed by the financial institution, the rate could be increased.
The total amount to be financed: for example, certain interest rates are only available for amounts financed of $7,500 or more.
The term: sometimes a rate increase may be necessary if the term is longer than a certain number of months.

Obtaining the loan at the dealership
Financing is always available at the dealership. It allows you to :

be accompanied in case of problems with the loan;
centralize the entire purchasing process in one place;
add loan insurance to your financing or lease that protects you in the event of death, accident, illness or critical illness.
Did you know that? When it comes to financing, it’s the finance managers of the dealerships you’ll meet. They are professionals supervised by the Autorité des marchés financiers (AMF) who are subject to several rules and practices that are frequently verified.

  1. How are repayment terms and payments set?
    To establish a term that suits you, you will have to rely on your personal budget and the management of your finances. If your credit rating is good, it will be up to you to set the amount you can pay per year and determine the payment terms. Choosing a payment frequency, weekly, biweekly or monthly, will not make a big difference on the interest paid in the end.

You can then think about the term: that is, how many months you would like to pay off your loan. Sometimes you may want to pay off your payment over a longer period of time to get the vehicle model you want with the monthly payment you originally set. Consider also the possibility of giving a cash amount, or leaving your vehicle in exchange, to adapt your monthly payment to your initial budget. In the case where the dealer takes back your vehicle in exchange, this allows for tax savings. An advisor on site will be able to offer you several options in order to obtain the monthly payment that suits your budget.

Did you know that ? Not all financing terms (weekly, bi-weekly, semi-monthly and monthly) are offered at all financial institutions. It is therefore necessary to make arrangements in advance and to validate the options offered at the dealership in question.

  1. What happens if I want to sell my vehicle before it is fully paid off?
    If you wish to sell your vehicle, there are several options available to you, the two most common of which are

Option 1: Leave the vehicle in trade-in at the dealership when you purchase or lease a new vehicle.

If there is still a lien (i.e. there is still an active balance on the loan) on the trade-in vehicle, the dealer will send a check directly to the original financial institution.

Did you know that? Although the dealer often gives you less than market value since your vehicle is dedicated to resale, you may save taxes on your purchase. For example, if your new vehicle costs $40,000 and the dealer gives you $10,000 for your old vehicle, you will only pay sales tax on $30,000. Plus, it’s a good option if you don’t want to deal with the headache of selling to a private party!
Option 2: Selling to a private individual

When selling to a private individual, you must ensure that you have repaid your loan in full. There are several rules governing the sale to a private individual, particularly with regard to the QST. Ask the SAAQ in advance to avoid unpleasant surprises.

Did you know that? A buyer could (and should) ask you for proof that the vehicle is duty free, i.e. that the debt is fully paid at the time of purchase. He may ask you for an official document from the Register of Personal and Movable Real Rights (RPMRR). You will have to pay $9 and enter your serial number to obtain it.

What you need to remember when buying a vehicle from a dealer
Buying a vehicle at a dealership means talking to an advisor who can guide you. Do not hesitate to clearly express your needs and your budget from the start. By having this basic information, they will be better equipped to help you buy the vehicle that meets your needs and budget. It’s their job to help you feel good about your purchase! Ready to get financing for the vehicle you want? Apply today!

Continue Reading

Trending

Copyright © 2017 Zox News Theme. Theme by MVP Themes, powered by WordPress.