Question 1

Why do I need life insurance if I'm young and healthy?

Accepted Answer

Life insurance can be more affordable when you are younger and healthier, and qualifying for coverage may be easier. More importantly, insurance is designed to protect the people who depend on you financially. Your needs may include replacing income, covering debts, supporting your family, paying final expenses, or protecting future financial goals. Your actual need depends on your personal circumstances and existing coverage.

Source: Government of Canada — Financial Consumer Agency of Canada, Life Insurance.

Question 2

What is the difference between Term and Permanent life insurance?

Accepted Answer

Term life insurance provides coverage for a specified period, such as 10, 20 or 30 years. Permanent life insurance is designed to provide lifelong coverage, subject to the policy terms and premiums being maintained. Some permanent policies may also build cash value. The appropriate type of insurance depends on your needs, financial objectives, budget and the length of time you need protection.

Source: Government of Canada — Financial Consumer Agency of Canada, Life Insurance.

Question 3

How much life insurance coverage do I need?

Accepted Answer

There is no single formula that works for everyone. Consider the income your family may need to replace, your mortgage and other debts, education costs, final expenses, existing savings and investments, and any life insurance you already have. A needs-based assessment can help determine an appropriate amount of coverage for your circumstances.

Question 4

Can I get insurance if I have health issues?

Accepted Answer

In many cases, yes. Insurance eligibility depends on the type of policy, your health history, the insurer's underwriting requirements and other factors. Some products may require detailed medical information or an examination, while others may use simplified or limited underwriting. Coverage, exclusions and premiums can vary, so it is important to compare the available options based on your circumstances.

Question 5

Do I need life insurance if I have coverage through my employer?

Accepted Answer

Employer-sponsored life insurance can provide valuable protection, but it may not be enough to meet your family's needs. Review the amount of coverage, who is covered, the policy terms, and what happens if you leave your employer. Personal life insurance can provide additional protection that is not dependent solely on your employment.

Question 6

How does permanent life insurance work as a retirement tool?

Accepted Answer

Some permanent life insurance policies build cash value that may be accessed during your lifetime, subject to the policy terms. Depending on the policy and how funds are accessed, borrowing or withdrawing cash value can have costs, affect the policy's cash value and death benefit, and may have tax consequences. Permanent life insurance should therefore be considered as part of an overall financial strategy rather than automatically as a retirement-income solution.

Question 7

What is the difference between bank mortgage insurance and independent life insurance?

Accepted Answer

Mortgage insurance offered by a lender is designed primarily to protect the lender by paying the outstanding mortgage balance if a covered event occurs. Individual life insurance is owned by you and can provide a death benefit to your beneficiaries, giving your family greater flexibility in how the proceeds are used.

Source: Financial Consumer Agency of Canada (FCAC).

Question 8

Is mortgage insurance mandatory in Canada?

Accepted Answer

Mortgage default insurance, such as CMHC mortgage loan insurance, is different from mortgage life or mortgage protection insurance. It protects the lender against borrower default and is generally required for insured mortgages with a down payment below the applicable threshold.

Source: Government of Canada — Financial Consumer Agency of Canada.

Question 9

Can I keep my insurance if I change banks or move to a new home?

Accepted Answer

It depends on the type of mortgage insurance you have. Mortgage life insurance offered through a lender is generally connected to that mortgage and its policy terms. If you change lenders or obtain a new mortgage, you should confirm whether your existing coverage continues or whether a new application is required. Personal life insurance is different because it is generally owned by you and is not tied to a particular mortgage.

Question 10

What happens to bank insurance if I pay off my mortgage early?

Accepted Answer

Mortgage life insurance is an optional product associated with the mortgage. If the mortgage is fully paid off, the mortgage-related insurance coverage may end according to the policy terms. It is important to review the policy before assuming that the coverage continues after the mortgage is discharged. Personal life insurance, by contrast, is not dependent on having a mortgage and can continue according to its policy terms.

Question 11

How much does mortgage protection insurance cost per month?

Accepted Answer

There is no standard monthly price. The premium depends on factors such as the amount of the mortgage and your age, and the pricing structure depends on the policy. Some lender-provided mortgage life insurance premiums may remain level even as the mortgage balance decreases. Review the actual policy and compare the cost and coverage with other insurance options before making a decision.

Source: Financial Consumer Agency of Canada.

Question 12

What is the difference between RRSP and TFSA? Which is better?

Accepted Answer

Neither is automatically better. An RRSP generally provides a tax deduction for eligible contributions, while withdrawals are generally taxable. A TFSA does not provide a tax deduction for contributions, but eligible withdrawals and investment income within the account are generally tax-free. The better choice depends on your income, tax situation, available contribution room, financial goals and when you expect to use the money.

Source: CRA — Government of Canada.

Question 13

When should I start saving for retirement?

Accepted Answer

There is no single age that is right for everyone. Starting early can give your savings more time to grow, but the appropriate amount and timing depend on your income, expenses, debts, goals, existing savings and expected retirement income. Government programs such as CPP and OAS are only part of retirement planning, so consider your overall financial situation.

Question 14

What is the RRSP contribution deadline?

Accepted Answer

For the 2025 tax year, the deadline for RRSP contributions that qualify for a deduction on your 2025 tax return was March 2, 2026. RRSP contribution deadlines generally fall within the first 60 days of the following year. Always check the CRA's current dates for the applicable tax year.

Source: CRA — Government of Canada.

Question 15

Can I withdraw from RRSP before retirement?

Accepted Answer

Yes. If your RRSP is not locked-in, you can generally withdraw funds before retirement. The withdrawal is generally included in your taxable income and your financial institution will usually withhold tax at source. Special programs, such as the Home Buyers' Plan and Lifelong Learning Plan, allow qualifying withdrawals under specific rules without the usual immediate tax treatment. The current Home Buyers' Plan withdrawal limit is $60,000.

Source: CRA — Government of Canada.

Question 16

When can I start receiving CPP and OAS?

Accepted Answer

CPP can generally start as early as age 60 and as late as age 70. The standard age to start CPP is 65. Starting before 65 permanently reduces the monthly CPP pension, while delaying it after 65 increases the monthly amount, up to age 70. OAS can start at age 65 and can be voluntarily delayed to age 70 for a higher monthly payment. CPP and OAS have different rules, so they should not be treated as the same program.

Source: Government of Canada.

Question 17

How much do I need to retire comfortably in Canada?

Accepted Answer

There is no universal amount that everyone needs for retirement. Your retirement income needs depend on your desired lifestyle, housing costs, debts, health and other expenses, government benefits, employer pensions, personal savings and investments, and the age at which you retire. A common percentage such as 70% or 80% of pre-retirement income is a planning rule of thumb, not a Government of Canada requirement or statistic.

Question 18

What is RESP and how does it work?

Accepted Answer

RESP is a Registered Education Savings Plan that helps families save for a child's post-secondary education. The Canada Education Savings Grant (CESG) generally provides 20% on eligible annual contributions, up to $500 per year per beneficiary, or up to $1,000 when unused grant room from previous years is available, subject to the applicable limits. The lifetime CESG maximum is $7,200 per beneficiary. Investment growth remains tax-deferred inside the RESP. When money is withdrawn for education, contributions are generally returned tax-free, while Educational Assistance Payments (EAPs), which include government incentives and investment earnings, are generally taxable to the student beneficiary.

Question 19

When should I open an RESP for my child?

Accepted Answer

The earlier you start, the more time your contributions and investment earnings have to grow. Starting early can also give you more opportunity to receive available CESG benefits. However, it is never too late to start, subject to the applicable contribution and grant rules.

Question 20

What happens if my child doesn't go to university?

Accepted Answer

If your child does not attend university, the RESP may still be used for other qualifying post-secondary education programs, including eligible colleges, trade schools and other qualifying educational institutions. Depending on the circumstances, the RESP may also allow transfers to another eligible beneficiary or other options. The specific rules depend on the type of RESP and the situation.

Question 21

Does RESP only cover university?

Accepted Answer

No. An RESP is not limited to university. It can generally be used for qualifying post-secondary education programs, including eligible college, trade and vocational programs, subject to the applicable program requirements.

Question 22

What is an RDSP?

Accepted Answer

An RDSP is a Registered Disability Savings Plan designed to help eligible people with disabilities build long-term savings. The plan can receive contributions from family members or others, as well as government assistance through the Canada Disability Savings Grant (CDSG) and Canada Disability Savings Bond (CDSB). Investment growth remains tax-sheltered inside the plan until amounts are paid out.

Question 23

Who is eligible for an RDSP?

Accepted Answer

Generally, the beneficiary must be approved for the Disability Tax Credit (DTC), be a resident of Canada when the plan is opened, have a valid Social Insurance Number (SIN), and meet the applicable age requirements. The specific eligibility rules should be confirmed with the financial institution offering the RDSP.

Question 24

Do I need the Disability Tax Credit (DTC) to open an RDSP?

Accepted Answer

Yes. The beneficiary generally needs to be approved for the Disability Tax Credit (DTC) to open and maintain an RDSP. The DTC is an eligibility requirement for the RDSP, but the RDSP itself is a savings plan and is separate from the tax credit.

Question 25

How much can I contribute to an RDSP?

Accepted Answer

There is no annual contribution limit for an RDSP, but the lifetime contribution limit is $200,000 per beneficiary. Contributions can generally be made until the end of the year in which the beneficiary turns 59, subject to the applicable rules.

Question 26

What is the Canada Disability Savings Grant?

Accepted Answer

The Canada Disability Savings Grant (CDSG) is a government grant that can match eligible contributions made to an RDSP. Depending on family income and the amount contributed, the government may provide a matching grant of 100%, 200% or 300%. The maximum grant is generally $3,500 per year and $70,000 over the beneficiary's lifetime.

Question 27

What is the Canada Disability Savings Bond?

Accepted Answer

The Canada Disability Savings Bond (CDSB) is government assistance paid into an eligible RDSP based primarily on family income. Unlike the grant, you do not generally need to make contributions to receive the bond if you qualify. The lifetime maximum bond is $20,000.

Question 28

Can I receive the RDSP bond without making contributions?

Accepted Answer

Yes. An eligible beneficiary may receive the Canada Disability Savings Bond without making contributions to the RDSP. The amount depends on family income and the beneficiary's eligibility.

Question 29

Can I catch up on missed RDSP grants and bonds?

Accepted Answer

Yes. Eligible unused grant and bond entitlements can generally be carried forward for up to 10 years. This can allow an eligible beneficiary to receive additional government assistance in later years, subject to the annual limits and other applicable rules.

Question 30

Are RDSP contributions tax-deductible?

Accepted Answer

No. Contributions to an RDSP are not tax-deductible. However, investment growth inside the plan is tax-sheltered until amounts are paid out.

Question 31

Are RDSP withdrawals taxable?

Accepted Answer

Not all of the withdrawal is taxable. Generally, original contributions are not taxable to the beneficiary, while government grants, government bonds and investment income included in the payment are taxable.

Question 32

Can I withdraw money from my RDSP before age 60?

Accepted Answer

Yes. RDSP withdrawals may be possible before age 60, subject to the plan's rules and applicable withdrawal limits. However, an early withdrawal may result in the repayment of some government grants and bonds, particularly amounts received within the previous 10 years.

Question 33

Will I have to repay government grants and bonds if I withdraw from my RDSP?

Accepted Answer

A withdrawal can trigger repayment of some grants and bonds received during the previous 10 years. Under the proportional repayment rule, the amount repaid can generally be up to $3 of grants and bonds for every $1 withdrawn, limited by the applicable assistance holdback amount. The exact amount depends on the circumstances of the plan.

Question 34

When must RDSP payments begin?

Accepted Answer

Lifetime Disability Assistance Payments (LDAPs) must generally begin no later than the end of the calendar year in which the beneficiary turns 60. Once started, these recurring payments generally continue at least annually until the plan is terminated or the beneficiary dies.

Question 35

What happens if I lose my Disability Tax Credit eligibility?

Accepted Answer

If the beneficiary is no longer approved for the DTC, the holder may generally choose to keep the RDSP open or close it. If the plan remains open, new contributions cannot be made and new grants or bonds cannot be paid into the plan while DTC approval is lost. The beneficiary may still be able to make withdrawals, subject to the applicable rules.

Question 36

What happens if I regain my Disability Tax Credit eligibility?

Accepted Answer

If the beneficiary regains DTC approval, the RDSP can return to normal operation and contributions can generally resume, subject to the applicable rules.

Question 37

Can an RDSP affect my disability benefits?

Accepted Answer

Opening and contributing to an RDSP does not generally affect federal or provincial/territorial benefits. However, withdrawals may affect certain provincial benefits in Quebec, New Brunswick and Prince Edward Island. Beneficiaries should check the rules that apply in their province.

Question 38

What happens to an RDSP when the beneficiary dies?

Accepted Answer

When the beneficiary dies, the RDSP is generally closed and certain grants and bonds received during the applicable 10-year period may have to be repaid to the Government of Canada. Any money remaining after applicable repayments is generally paid to the beneficiary's estate.

Question 39

Can an RDSP be transferred to another financial institution?

Accepted Answer

Yes. An RDSP can generally be transferred from one participating financial institution to another, subject to the applicable transfer rules. The transfer should be arranged directly between the financial institutions to avoid unintended tax or grant-and-bond consequences.

Question 40

Does OHIP cover me outside Canada?

Accepted Answer

OHIP generally provides only limited coverage for certain eligible emergency medical services outside Canada and does not cover many of the costs that can arise from an illness or accident abroad. Private travel medical insurance is therefore strongly recommended before travelling.

Question 41

What is visitor insurance and is it mandatory?

Accepted Answer

Visitor insurance covers medical care for people visiting Canada who do not have government health coverage. It is not legally mandatory in all cases, but it may be required as a condition of the visa in some situations. Regardless of any requirement, a medical emergency without insurance can cost tens of thousands of dollars. Review the applicable visa requirements and confirm the coverage needed before travelling.

Question 42

What is Super Visa Insurance and how does it differ from regular visitor insurance?

Accepted Answer

The Super Visa allows eligible parents and grandparents of Canadian citizens or permanent residents to visit Canada for extended periods. As of January 2025, eligible Super Visa holders can generally stay in Canada for up to five years per entry, with the possibility of extending their stay. Applicants must also have the required private health insurance coverage.

Source: IRCC — Government of Canada.

Question 43

Does travel insurance cover trip cancellation?

Accepted Answer

Coverage for trip cancellation depends on the policy and the covered reasons listed in the contract. Some policies may cover specific medical emergencies, while others may also cover certain additional insured reasons. Always review the policy terms before purchasing.

Question 44

Can I get life insurance as a newcomer?

Accepted Answer

Yes. Many Canadian insurers offer life insurance options to newcomers, although eligibility, underwriting requirements and available coverage can vary depending on immigration status, residency, medical history and the insurer. Starting early may provide more options, but each application must be assessed individually.

Question 45

Where do I start building my financial plan as a newcomer?

Accepted Answer

Key steps in order: 1) Open a bank account and start building a credit history. 2) Get temporary health insurance until OHIP starts (3-month wait in Ontario). 3) Get life insurance to protect your family. 4) Open a Tax-Free Savings Account (TFSA) and start saving. 5) If you have children, open a Registered Education Savings Plan (RESP) to benefit from government grants. Eligibility and requirements vary, so it is advisable to review your individual situation.

Question 46

Do I need private health insurance in Canada?

Accepted Answer

In Ontario, there is generally a 3-month wait before OHIP coverage begins. During this period, private health insurance may be needed. After OHIP starts, supplemental health insurance (dental, vision, prescription) may be useful since OHIP does not typically cover these services. Note: the Government of Canada has introduced the Canadian Dental Care Plan (CDCP), a federal dental coverage program for eligible Canadians without employer or private dental coverage and with an adjusted family net income below $90,000. Check Health Canada's website for current eligibility and enrolment information.

Question 47

How do I build a good credit history in Canada?

Accepted Answer

Your credit history from your home country does not transfer to Canada — you start from zero. A common first step is to obtain a Secured Credit Card. From there, paying bills on time and keeping your credit-card balances low relative to your available credit can help you build a stronger credit profile. Responsible credit use over time may open additional financial options.

Question 48

Can I buy a home in Canada as a newcomer?

Accepted Answer

Newcomers may be able to qualify for a mortgage in Canada, but eligibility depends on factors such as immigration status, income, employment history, credit profile, down payment and the lender's requirements. Some lenders and mortgage programs have specific provisions for newcomers.

Question 49

What is Key Person insurance and why is it important?

Accepted Answer

Key Person insurance is life or disability insurance purchased by a business on the life of a key individual — such as a founder, partner, or indispensable employee. If that person dies or becomes disabled, the benefit is paid to the company rather than the family, and can be used to cover losses, hire a replacement, repay debts, or maintain business continuity. It is an important risk-management tool for small and mid-sized businesses.

Question 50

What is a Buy-Sell agreement and how does it relate to insurance?

Accepted Answer

A Buy-Sell agreement is a legal arrangement that specifies what happens to a partner's share of the business upon their death, disability, or departure. Life insurance is often used to fund this agreement — the remaining partners can use the insurance proceeds to purchase the departing or deceased partner's share at a pre-agreed price. Without this arrangement, the business may face complex legal and financial consequences involving the partner's estate.

Question 51

How can life insurance be used in corporate tax planning?

Accepted Answer

Life insurance can play a role in corporate financial and tax planning, although the strategies available depend on the company's structure, objectives and specific circumstances. For example, the cash value in certain permanent life insurance policies may accumulate inside a corporation on a tax-sheltered basis and may be used in retirement or wealth-transfer planning contexts. These strategies require careful planning in coordination with a qualified tax or legal advisor.

Question 52

What is succession planning, and why does every business owner need it?

Accepted Answer

Succession planning is the process of preparing for the transfer of business ownership or management at retirement, death, disability, or other circumstances. It includes identifying who will inherit or purchase the business, how it will be valued fairly, and how the transition will be funded. Life insurance is often a key tool for funding a succession plan. Delaying this planning can put the business and everything the owner has built at risk.

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