Tag: insurance

Registered Retirement Income Fund – RRIF definition explanation

What is Registered Retirement Income Fund – RRIF?
A retirement fund similar to an annuity contract that pays out income to a beneficiary or a number of beneficiaries. To fund their retirement, RRSP holders often roll over their RRSPs into an RRIF. RRIF payouts are considered a part of the beneficiary’s normal income and are taxed as such by the Canadian Revenue Agency in the year that the beneficiary receives payouts. The organization or company that holds the RRIF is known as the carrier of the plan. Carriers can be insurance companies, banks or any kind of licensed financial intermediary. The Government of Canada is not the carrier for RRIFs; it merely registers them for tax purposes. Read more for examples and further explanation including related video clips and also comments
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Irrevocable Trust definition explanation

What is Irrevocable Trust?
A trust that can’t be modified or terminated without the permission of the beneficiary. The grantor, having transferred assets into the trust, effectively removes all of his or her rights of ownership to the assets and the trust.

This is the opposite of a “”revocable trust””, which allows the grantor to modify the trust. Read more for examples and further explanation including related video clips and also comments
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Cafeteria Plan definition explanation

What is Cafeteria Plan?
An employee benefit plan that allows staff to choose from a variety of benefits to formulate a plan that best suits their needs. Cafeteria plan options may include health and accident insurance, cash benefits, tax advantages and/or retirement plan contributions.

Also known as “”cafeteria employee benefit plan”” or “”flexible benefit plan””. Read more for examples and further explanation including related video clips and also comments
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Incidents Of Ownership definition explanation

What is Incidents Of Ownership?
Any interests or rights that an individual maintains in an asset, including property and insurance, that allow the person to change, modify, use or benefit from that asset. This is important for determining estate taxes. An individual can reduce the size of his or her estate by gifting assets to beneficiaries but, to avoid estate tax on the gift, the original owner must not retain any incidents of ownership in the gifted assets. Read more for examples and further explanation including related video clips and also comments
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Universal Life Insurance definition explanation

What is Universal Life Insurance?
A type of flexible permanent life insurance offering the low-cost protection of term life insurance as well as a savings element (like whole life insurance) which is invested to provide a cash value buildup. The death benefit, savings element and premiums can be reviewed and altered as a policyholder’s circumstances change. In addition, unlike whole life insurance, universal life insurance allows the policyholder to use the interest from his or her accumulated savings to help pay premiums. Read more for examples and further explanation including related video clips and also comments
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Reinstatement definition explanation

What is Reinstatement?
1. The process of re-establishing the status of a person, company or law.

2. In regards to insurance, reinstatement allows a previously terminated policy to resume active coverage. Depending on the circumstance of the termination, such as failure to pay the premium, the insured person may be required to compensate the insurer before reinstatement occurs. Read more for examples and further explanation including related video clips and also comments
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Indexed Annuity definition explanation

What is Indexed Annuity?
A special class of annuities that yields returns on your contributions based on a specified equity-based index. These annuities can be purchased from an insurance company, and similar to other types of annuities, the terms and conditions associated with payouts will depend on what is stated in the original annuity contract. Read more for examples and further explanation including related video clips and also comments
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