By Sheryl Smolkin

When you are budgeting for your child’s college or university education, tuition, books, accommodation and food are at the top of the list. But don’t forget to consider whether or not your child will require individual health, home or automobile insurance once he/she comes from or is moving to a different city, province or country.

Health Insurance:

The Government of Saskatchewan’s Health Plan provides basic hospital and medical health coverage to residents of Saskatchewan at no charge. If an international student arrives directly from his/her home country, coverage starts on the day of arrival.

The student must have a valid study permit, proof of registered, full time status and a Saskatchewan resident address. A spouse or dependant living with the student at a Saskatchewan residence with immigration documents allowing a stay longer than six months is also eligible for coverage.

Generally students who go to school in another province but intend to return to their home province to live after graduation continue to be covered by the provincial medicare plan of their home province.

However, a student from another Canadian province who becomes a resident in Saskatchewan will be eligible for Saskatchewan Health coverage three months after setting up a residence in the province. Similar eligibility requirements apply for students moving from Saskatchewan to other Canadian provinces.

If the health plan of the province a student is leaving does not cover health cost during this three month period, he/she should have private health insurance.

Students will also require supplemental health care insurance that covers medical, dental and drug expenses not covered under the provincial medical plan. Children under 21 can be claimed as dependants under a parent’s employer-sponsored group benefits plan.

A full-time student attending an educational institution recognized under the Income Tax Act (Canada) is also considered an eligible dependent under an employer-sponsored group benefits plan until the age of 25, as long as he/she is entirely dependent on the parent for financial support.

Colleges and universities typically have group health insurance for students with the premium included in the tuition fee. It may be possible to opt-out with proof of other coverage. In cases where your child is covered under both your employer’s plan and the university’s student health and dental plan, the university plan is the first payer.

Auto insurance:

If a student with a car moves from Saskatchewan to another province or vice versa, it is important to follow the proper guidelines to fulfill the licensing and vehicle requirements of the province and ensure insurance coverage continues without interruption.

The Kanetix website has a handy cheat sheet which includes the government ministries, agencies or departments you should contact to ensure you know the applcable licensing and vehicle registration rules.

First of all, students should notify their current insurance supplier that they intend to take a car to another province to attend school. Policies and rules vary by company so they should speak with their licensed representative before leaving to avoid any lapses in coverage.

Students can learn more about the requirements of the province where they will be attending school at the links below.
British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec,  Newfoundland & Labrador, New Brunswick, Nova Scotia, Prince Edward Island 

Home insurance:

An August 2012 TD Insurance poll found half of Canadian renters under 35 do not have tenants’ insurance. In a press release announcing the results of the poll, Dave Minor, Vice President, TD Insurance sets the record straight for renters by debunking the five most common renter’s insurance myths:

Myth #1: If something happens, it will be covered by the landlord’s policy

Nearly one-third of Canadian renters under 35 (32%) incorrectly believe they are covered under their landlord’s insurance policy. But Minor says your landlord’s insurance likely only covers the building you live in and not your personal possessions or your liability for accidents.

Myth #2: My roommate has insurance, so I should be covered too since we live together

“Generally, renter’s insurance does not cover your roommate and instead only covers your own personal belongings,” says Minor. But if roommates are considering purchasing joint insurance, they should discuss how they will pay for the policy and have a clear understanding of what each roommate’s valuables are worth.

Myth #3: The chances of something actually happening are so small it’s not worth the cost

Accidents can happen to anyone, anytime, anywhere, and the financial impact can be significant. A number of common incidents and simple mistakes that are generally covered under renter’s insurance, including:

• A break-in.
• A party where there is accidental damage to a neighbour’s property or a neighbour’s property.
• A pipe freezes and breaks.

Myth #4: Renter’s insurance isn’t affordable

Renter’s insurance can be very affordable, and there are several ways to save. Purchasing auto and renter’s insurance with the same insurance provider, or through a student association can often yield discounts.

Myth #5: I’m covered under my parents’ insurance policy

Students may be covered by their parents’ policy if they live away from home while at school, but this coverage can be limited. Speak with your insurance provider to find out what coverage your child will need. Renter’s insurance is inexpensive and you may decide that it is best if your kids have their own policy.

Do you have tips for college or university students about insurance they may need once they move out?  Share your tips with us at http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card. And remember to put a dollar in the retirement savings jar every time you use one of our money-saving ideas.

If you would like to send us other money saving ideas, here are the themes for the next three weeks:

12-Sept	Kid’s allowance	How much and what your children have to do to get an allowance?
19-Sept	Extracurricular activities	How many and how much?
26-Sept	Employee benefits	Getting value for your employee benefits

By Sheryl Smolkin

There are many excellent articles about the pros and cons of mortgage insurance vs. term life insurance. But every year a new crop of first-time buyers begins their search for a perfect new home, so it seems like a subject worth revisiting.

The purpose of mortgage insurance (also known as mortgage life insurance or creditor insurance) is to pay off the mortgage when you die so your spouse and dependents are mortgage-free and have one less major expense to worry about. If both you and your spouse are working and want to protect each other, both of you need to be insured.

The first major advantage of term life insurance is that it is much less expensive than mortgage insurance.

I obtained quotes on the Cowan Financial Solutions website for standard non-smoker term life insurance for both a man and a woman aged 36 for $400,000 of life insurance for a term of 25 years. The lowest annual quotes were $556 for the man (Assumption Life) and $420 for the woman (Foresters Life), or $976 in total for both. Of course, if you plan to pay your mortgage off more quickly, you can request quotes for a shorter term.

I compared this quote to mortgage insurance information on the TD Canada Trust website. Mortgage insurance premiums are calculated based on your age and the value of your mortgage. There is no discount for non-smokers or women. With a monthly premium of 21 cents per $1,000 for each borrower 36-40 years old, the annual bill for both spouses would be $1,512 (including a 25 per cent discount for two or more borrowers).

But the cost differential is only the tip of the iceberg. After viewing a YouTube video in which Cowan Financial Solutions advisor Rita Harris explains some of the other reasons why term life insurance is a better deal than mortgage protection offered by the banks, I gave her a call to get some additional details.

Here’s what she said:

Protection: When you die, your mortgage insurance is payable directly to the bank. Term life insurance protects more than just your mortgage. Your spouse (or other beneficiary) can use the money as is most appropriate in the circumstances.

Premium Guarantee: The term life insurance premiums and benefits are guaranteed for the life of the policy. Your coverage amount is constant but can be reduced at your request. Premium levels for mortgage insurance can be unilaterally changed by carrier. As your mortgage reduces your coverage goes down but your premiums do not.

Portability: If you take your mortgage to another company, you may lose your existing mortgage insurance and have to re-qualify for new mortgage insurance coverage. In contrast, individual term life insurance is fully portable even if you move your mortgage.

Repayment: You lose all your mortgage insurance coverage when your mortgage is re-paid, assumed or in default. As long as your term life insurance premiums are paid, you can convert your insurance to a permanent plan.

Underwriting: If you buy term life insurance, the insurance company will assess the risk and establish the premiums based on your health at the time the policy is purchased. In the absence of any fraudulent activity, you know your claim will be paid out when needed in accordance with the terms of your contract. Mortgage insurance is subject to post-claim underwriting, which means technically you could be declared uninsurable when you submit a claim.

Moneyville blogger Ellen Roseman’s story about the Feldmans is only one example of a case where a bank initially denied coverage after the fact for medical reasons. CBC marketplace also did a brilliant report called The Mortgage Insurance Game.

So caveat emptor! Remember, mortgage insurance is sold by bank employees who may not be trained to explain the legal intricacies of those insurance products. You could pay premiums and think you are covered, only to realize later you are not.

Do you have tips for people shopping for life insurance in order to protect their mortgages? Share your tips with us at http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card. And remember to put a dollar in the retirement savings jar every time you use one of our money-saving ideas.

If you would like to send us other money saving ideas, here are the themes for the next three weeks:

25-Jul	Telecommuting	Jobs where you can work from home
1-Aug	Vacation	Staycation ideas that can save you money
8-Aug	Garage sales	How to make money on your garage sale

By Sheryl Smolkin

I’ve read so many horror stories about people losing their life savings because they became seriously ill when travelling in the U.S. that I’ve become a bit paranoid about having enough travel insurance.

That’s probably why for many years we have purchased an annual travel policy in addition to coverage available from both of our employers and our credit card company. I figure that if something happens, one or more of the companies will make us whole.

But like many other people, I really never thought about needing travel insurance for trips to other Canadian provinces. A 2012 survey by TD Insurance revealed that 29 per cent of Canadians believe they only need travel insurance if they travel internationally and 35 per cent admit they have travelled out of their home province without it.

However, when I talked to TD Insurance VP Dave Minor, he reminded me that existing provincial plans do not necessarily cover all expenses that may be incurred if a medical emergency occurs in another part of the country.

For example, if you have an accident water skiing in B.C. and you must be transported by air ambulance back to Saskatchewan, your Saskatchewan Medical Care Insurance Plan will not foot the bill. Similarly, if you have a serious heart attack in Halifax when you are travelling alone, flying a family member out to be with you would normally be an out-of-pocket expense.

Because an accident or illness can happen anytime, Minor says travel insurance is also important even if you only cross-border shop in the U.S. a couple of times a year. “For people who travel across the border on a regular basis, we recommend an annual plan. When you look at the per trip cost vs an annual policy, it will pay for itself after three or four trips.”

You can compare prices and features of available travel insurance coverage from a number of carriers here. However, the cheapest policy will not always deliver the best value.

For many years we have purchased the annual TD Meloche Monnex Wide Horizons policy which is available to members of professional and alumni associations. For $187.77/year (at age 63) we are covered for unlimited trips of up to 30 days outside our home province plus hospital and medical expenses up to $5 million. The cost of the policy increases with age and customers over 85 pay $2473.54/year for the same coverage.

If you have any medical conditions or you are on medication when you apply for travel insurance it is very important to fully disclose this information and discuss it with your carrier so you understand whether any potential medical expenses for pre-existing conditions are excluded.

Also, if your vacation plans include engaging in risky activities like para-sailing, bungee jumping, mountain climbing or other extreme sports, be sure to clarify whether or not the policy will pay if you have an accident in these circumstances.

Here are some questions you should ask when you are purchasing travel insurance.

1. What is the maximum each policy will pay above provincial medical insurance limits?
2. Is there an age limit or medical criteria for who can apply?
3. Does age affect the kind of coverage I can expect?
4. How does the policy define a pre-existing condition?
5. Will a pre-existing condition of mine affect my coverage?
6. Are there any medical exclusions that apply to me?
7. Will I have to pay a deductible? If so, how much?
8. Does the policy contain a co-payment clause? What percentage of medical expenses will I have to pay?
9. Will the insurance company pay the hospital or physician directly? Or will I have to pay the full amount myself, and then be reimbursed later by the company?

I also particularly like this Tip Sheet from CBC Marketplace called “What you need to know about (the tricky world of) travel health insurance”

Do you have tips for people shopping for travel insurance? Share your tips with us at http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card. And remember to put a dollar in the retirement savings jar every time you use one of our money-saving ideas.

If you would like to send us other money saving ideas, here are the themes for the next three weeks:

18-Jul	Buying a home	Mortgage insurance vs life insurance
25-Jul	Telecommuting	Jobs where you can work from home
1-Aug	Vacation	Staycation ideas that can save you money