It has been almost two years since travel came to a halt. With normal life around the corner, many of us are beginning to catch the travel bug. However, jetting off to a holiday destination calls for travel insurance. With Travel top of mind, do you know what kind of coverage you have with your group benefits? 

Employee Benefits typically include Travel Insurance as part of the Extended Healthcare coverage. The coverage intends to protect you and your eligible dependents from potentially significant medical expenses associated with emergency treatment while travelling outside of your home province.   

Travel Insurance is important coverage, but the average plan member doesn’t always read the fine print to fully understand their coverage. Before you travel you should know:   

Eligibility – Do you have this coverage as part of your plan and who is eligible? 

Trip Duration – How many days can you be gone for before coverage ends? 

Stability Clause - Coverage may not be available to plan members who have had a change in health within a specified period of time leading up to the trip (typically 3 months).

COVID-19 Coverage - Essential travel vs non-essential travel and government advisories.

Typically, group plans only cover emergency medical coverage. You may still need to purchase trip interruption, baggage loss, or additional top-up coverage if your trip exceeds the maximum trip duration on the plan. 

When in doubt, reach out to your carrier to confirm coverage and trip plans. This is not mandatory but can give you peace of mind to know what you are covered for. Travellers should continue to check the Canadian government’s travel advisories regularly.

If you're in need of additional travel insurance, reach out to one of our experts today!

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What you need to know: Travel coverage and group benefits

The world is finally opening back up, and travel is on everyone’s mind. Whether it’s somewhere close to home, like a neighbouring province, or farther afield, like Maui, that itch that we haven’t been able to scratch is gone at long last! But with travel comes risk, especially given the complications from the last few years. Even outside of COVID-19, it’s important to ensure that any unforeseen circumstances are taken care of before leaving home. Travel insurance is necessary to ensure that you and your loved ones are protected so that you can focus on enjoying the journey.

Travel insurance, like other types of insurance, is complicated; there are rules and stipulations that might not seem like a big deal when purchasing your plan, but can come back to bite you if you need to use your coverage. Here are a few things to think about when purchasing your travel coverage that you might not have thought of before (or maybe you have, and you want another way to protect yourself!):

The dreaded pre-existing condition clause. If you have ever been to a physician, you may be at risk of having your travel policy exclude coverage for any issues arising from a condition that you have sought treatment for previously. It’s rare for someone to have an impeccable bill of health, and if there is something in your past or present that causes issues from time to time, you want to make sure that you have coverage in case of an out-of-country emergency. Suppose your travel insurance doesn’t exclude coverage for any pre-existing conditions. In that case, you are likely to pay an arm and a leg to ensure that you have peace of mind knowing that you are prepared for any situation that may arise while on vacation.

It’s common for plans to include a stability period clause, which would keep you homebound for an extended time following a medical event, regardless of whether you have been cleared for travel by your Physician. Even a condition that is stabilized with routine medication may disqualify you from coverage if you want to leave home within the timeframe that the travel insurer allows.

No matter your age or health status, travel insurance carriers will always ask you to fill out their medical forms before they quote a plan for you. If you make a mistake on their form, or if something isn’t filled out completely, you may be in for a hassle if you need to make use of your plan. On top of that, whenever you want to leave your home province, you must complete their questionnaire again. If something happens between vacations, you run the risk of paying higher premiums than you should, or being denied coverage outright.

It’s no secret that travel insurance is expensive, especially in the later stages of life when you have the time and money to explore the world. Costs are based on your age and health status and can often be more expensive than the trip itself.

Travel insurance, while it has its challenges, is necessary to protect yourself from the unseen when travelling outside of your home province. These hurdles aren’t insurmountable but do often cause significant frustration when all you want to do is enjoy a vacation.

Sagium has partnered with VUMI Canada, a world-renowned provider of Enhanced Health Care solutions, to offer a program that is affordable, doesn’t require any medical questions, and provides access to immediate healthcare anywhere in the world. Contact us today if you’re interested in learning more about this product!

4 Things You Didn't Know About Travel Insurance

Owning a second property has its luxuries. Whether it’s used for winter family ski trips or summer vacations on the lake, you may find yourself with extra tax obligations associated with the property. 

How can you reduce your capital gains tax obligation?

There are some strategies you can do to plan for the inevitable capital gains tax bill:

To shelter the gain on your second property, you may be able to use your Principal Residence Exemption (PRE) if you meet the CRA rules for usage of the property. Often, the PRE is associated with your primary residence (PR). However, if your vacation property has increased in value more than your primary residence, you may choose to use the exemption against the gain on the income property (either at sale or time of death). If you designate the vacation property as your PR for all of the years that you own it, you will be able to use 100% of your exemption. If you designate it as your PR for a portion of the years you have owned it, the following formula will apply:

Exemption Amount = Capital Gain X (Number of years designated as PRE + 1) / (# of years owned)

*The +1 accounts for the possibility of having two PREs in a year that you purchase and sell a property

For the years your second property was designated as the primary residence, your other property will not be eligible for exemption and will be subject to tax on any related gain. Effectively, you are shifting the tax bill to the property with the lesser gain.

If your vacation property is a cherished place where family and friends come together, you may be interested in keeping it in the family. Consider setting aside other assets or insurance to fund the capital gains tax bill once you pass on. Insurance can be beneficial as the policy gains are tax-free and payout at the time of death, the same time the tax bill is triggered. Your family or beneficiaries can use the insurance payout to cover this expense.

With all the planning strategies available, understanding what you want to do and why you want to do it will give the best initial clues toward the right approach. There are tax, legal and financial considerations associated with planning for a vacation property, and it is vital to have advisors in those areas to make sure plans are structured and appropriately documented. Additionally, there are emotional factors and relationship factors involved that can often thwart even the most expensive and bulletproof of plans. Having an advisor who helps lead your family conversations and understands your objectives will be the best person to mediate the team and ensure that your goals drive the plan.

Second Property? How to plan for your taxes

When discussing Estate Planning most people think of a carefully drafted will as the tool to get it done. A carefully drafted or updated will is crucial to make sure you accomplish your Estate goals, but it is only one tool in the kit! With increased government spending and the elimination of some traditional tax tools it will be more beneficial than ever to examine what tools are available to help plan your Estate effectively. 

Government spending is hitting record highs as a result of fulfilling political promises and the economic stimulation needed because of COVID. In the Financial Advisory community, we are anticipating increased taxes to help gain control of this mounting debt. Whether it be increases to Capital Gains inclusion rates, income tax rates, sales taxes, or new taxes such as Estate or Wealth taxes we know we will have to pay for the past and current level of spending. Now is the best time to prepare for this by doing some Financial and Estate Planning as there are some tried and tested strategies to help out.

Spending time with a trusted advisor to adequately discover your goals and build out your family vision is a necessity. The resulting analysis will help uncover your assets needed for you to live out your definition of financial security, hopefully until a ripe old age. Once you are convinced that your financial security is looked after, a proper analysis will define what is left for your beneficiaries and community. This is where some decisions can be made around your assets and intentions. 

Aside from your Principal Residence and your TFSA’s, everything else will be taxed throughout your lifetime and/or in your Estate. By planning ahead, you can make the decision as to where you want your money to go rather than leaving it up to Ottawa with the proceeds from your terminal tax return. Our biggest three suggestions for our clients are to:

Avoid paying tax for your entire lifetime on assets that you are going to leave behind

If you can use an asset today at a lower tax rate than you will leave it behind at then do so

There are many strategies now to deal with these planning opportunities: proper life insurance planning with the right products for your needs; RRIF burn; donation of public shares to charity (if philanthropy is a goal); Individual Pension Plans for Business Owners; corporate and trust structures; family foundations; Donation of Private Company shares in a Family Enterprise in multi-generational investment or other types of family business.

The list goes on, and it seems complicated and tedious but with proper planning with a skilled team it can be an enjoyable and rewarding process. We often see families get into arguments when there is uncertainty or misperception around their families wealth, or they become estranged upon the settling of an estate due to grief and tension.

The best time to start planning and create the efficiencies and peace of mind is now. If you want to know more or want to review your estate plan, reach out to a Wealth Strategist.

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What you need to know: Travel coverage and group benefits

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