Frequently Asked QuestionsHere are some of the most frequently asked questions about financial services and insurance coverage. Click on the question to read the answer. Financial ServicesWhat is a mutual fund? InsuranceIs my swimming pool covered by my home insurance policy? Financial ServicesWhat is a mutual fund?A mutual fund is a pool of assets contributed to by investors who share similar investment objectives. The mutual fund is managed by professional portfolio managers and advisors in accordance with a disclosed investment strategy in order to achieve the mutual fund's objective. Mutual funds provide a cost-effective way of owning diverse investments based on the knowledge and attention of professional money managers. There is a wide variety of mutual funds available in Canada (some 4000) to help investors achieve their personal financial goals. For example, the investment strategy of any given fund can be designed to provide lower or higher risk options. This in turn provides opportunities for investors who plan to invest their money for longer or shorter periods of time. Some funds are designed to provide investors with regular income; others may provide capital growth and income. There are also funds that can be turned into cash easily if the need arises. Funds can be invested entirely in the stocks of Canadian companies, Canadian bonds issued by companies, federal or provincial governments, or other Canadian assets. Some funds focus on foreign investments; still others are a blend of Canadian and foreign investments. For each mutual fund, a prospectus is filed with the relevant securities commission. A prospectus provides a detailed description of the mutual fund, including:
Disclaimer: commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. How is income tax collected on mutual funds?It is a good idea to find out what the fiscal repercussions will be when you select a mutual fund. A financial professional can answer many of your questions. However, it is recommended that you talk to a tax consultant, who will assess your personal situation. How can I calculate my net worth?Your net worth is obtained by adding up your total assets (what you own) and subtracting your liabilities (what you owe). Calculate your Net Worth easily by using our online tool. When should I update my net worth?Update your net worth calculation at least once a year in order to track your progress. How can I increase my net worth?
What is the "Rule of 72"?A simple rule of thumb for estimating how quickly your assets will grow. Take the number 72 and divide it by your rate of return – this will tell you how long it will take to double your assets. If you are earning 8%, your assets will double every 9 years, (72/8). How much should I be saving?Get into the habit of saving a regular amount of at least 10% of your income each month and use the balance for your expenses. This is known as the "pay yourself first plan". Have this amount regularly transferred to a separate account on a monthly basis. How can I maximize my RRSP contribution?You should start by building a financial plan to ensure you:
Once you have assessed all of your family's needs, you can develop a strategy to maximize your RRSP contributions. The sooner you start investing in an RRSP, the greater your tax-free earnings will be. Your RRSP will grow faster when you make regular contributions up to your maximum allowable amount. Your maximum allowable amount is shown on the notice of contributions issued by the federal government when you file your tax return each year. The amount is a percentage of your earned income for the previous year. When the time comes to make your RRSP contribution, you may not have enough cash available to make the full contribution. You may want to consider a loan to make up the difference. There are loans specifically designed for investing in an RRSP. If you can pay off the amount you borrow in one year, borrowing money can be a great way to keep your RRSP growing. As an added benefit, you will receive a tax refund on your contribution amount that will help you pay back the loan. Consult one of our financial professionals to help you build your plan. Insurance
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Options |
Description |
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Increased liability limits |
Up to a maximum of $2,000,000. |
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Collision coverage |
Covers damage to your vehicle in the event of an accident. |
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Comprehensive coverage |
Provides coverage for theft, fire, vandalism, cracked windshield and other perils. |
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Loss of use coverage |
Provides coverage for a rental vehicle while your vehicle is being repaired after an accident. |
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Rental vehicle coverage |
Extends physical damage coverage to rented vehicles in Canada and the United States. |
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Optional Benefits: |
Can increase the maximum levels of accident benefits coverage on your policy. In addition, you can choose to index your accident benefits coverage to ensure it stays in line with the Consumer Price Index. If you have benefits available through your employer or elsewhere, you may not need to buy optional benefits. We can help you decide which optional benefits, if any, are appropriate for you. |
Is there other coverage I should consider on my home policy?
Yes. Home, condominium and tenant policies are generally issued with a standard set of limits and coverage. You may find that you need additional coverage to meet your specific circumstances. There are a number of options for you to choose from that can enhance your property coverage:
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Options |
Description |
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Increased personal liability limit |
Up to $2,000,000 may be available. |
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Antiques & collectibles coverage |
Specifically insures these items so you can realize their true value in the event of a loss. Often an appraisal will be required. |
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By-laws coverage (for homeowners) |
Provides coverage for additional costs to repair or rebuild your home to comply with local laws. This is particularly important for older homes. |
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Earthquake coverage |
Can be added to your policy. |
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Coverage for: |
Increases the limits on these items, beyond your standard coverage, to suit your requirements. Contact us for details on your policy. |
Can I be sued for more than the amount of liability insurance I purchase?
Yes. Your amount of liability insurance is never disclosed to anyone during a lawsuit. If you are successfully sued for an amount greater than the limit of liability insurance you carry, you will have to make up the difference from your own personal assets. This could mean the loss of your home, investments, RRSPs and ultimately bankruptcy. That is why you should review your liability limits with an insurance professional to determine a limit that is appropriate for your circumstances.
What happens to my auto insurance after an accident?
Your insurance policy will be reviewed after every loss. If the loss is not your fault, your policy will most likely receive no rate increase. If you are deemed to be responsible, your policy may be re-rated with a higher rate charged at renewal or, at worst, the policy will not be renewed and you will have to look for coverage elsewhere.
What options do I have for paying my home or auto policy?
We have many different payment options available to you. They vary slightly based on which insurance company you choose. Most companies offer the following plans:
- One Pay: payment in full by the policy effective date.
- Instalment Plan: two, three or four equal instalments, with the first due on the policy effective date and the others due in set increments (usually 30, 60, or 90 day intervals). A small service charge usually applies to each payment. The number of instalments, payment interval and service charge vary slightly from company to company.
- Electronic Funds Transfer (EFT) program: payments are automatically withdrawn from your bank account. A 3% charge is added to the full premium amount.
Some of the insurance companies we represent have programs available where no service charge applies to any of the payment plans offered.
What does "replacement" value mean?
For home insurance, the replacement value guarantee allows you to replace the insured item with a new item of the same kind and quality if that object is destroyed or rendered unusable. In this case, the insurer does not apply any depreciation.
For automobile insurance, the owner of a new vehicle can also take out a replacement value guarantee. Various options are available in the case of a total loss, ranging from the reimbursement of the initial purchase price to the replacement of the destroyed vehicle with a new vehicle that has the same features.