22 - Wednesday, June 30, 1999 - North Shore News MORTGAGES | WHEN THE BANKS SAY “NO” Ft uatuclal Se Services Lid, " VISIT OUR WEBSITE www.instafund.com : Adam Korbin Lender Broker fees may apply Avoid expensive engine repairs. Timing north shore news Demystifying demutualization THE demutualization of five major mutual life insurance companies will have a direct affect on approximately three million Canadian policy holders. This week’s column, the second in a series on demutu- belts must be replaced every 96,000 km or every 5 years. Parts & Labour AIR CONDITIONING ‘CHECK-UP ©: ©: With you air conditioning keep its cool this summer? Check it now before the Includes inspaction of belts, hases, heatwave hits. $ condenser, compressor, temp, & system pressure -MICHELIN: EXTREME: SAVINGS: $100 cif 4 Michelin MXV4 tires or $A0 off 4 Michelin Xone tires PLUS a Free Oil Change. pires June 30/99 > PRE-SUMME! OIL_ CHANGE SP a Labour to install tune-up parts i Cian ter change. Cee for Sud es Inspect all brakes for wear %and condition & inspect tire wear and pressure & inspect brake calipers, wheel cylinders and parking brake © Tire rotation f Washer fluid top-up PRE-S ZF Inspect all lights and bulks ‘Wf Inspect and lubricate door locks, latches and handles HONDA’S COMPREHENSIVE ie UMMER CHECK-UP Don’t open your hood to strangers applicable environmental levies. Ail prices are plus taxes *Offers valid until July 17/89. Not vaikl town ariy oier onoe promation or discount. 125 Martane Br. Herts Van 967-4618 PACIFIC 4] ON) DAR eaiy, elied oa 0 ue cushh § ALUMINUM SPECIALISTS alization, examines the impli- cations of this move for policy holders. The first of five major companies (comprising almost half of the Canadian life insur- ance industry) to proceed with demutualization was Mutual Lite. Like other mutual life insurance companies, Mutual Life was owned by its policy habers. These policy holders, however, voted in favour ofa proposal under which the company will become publicly held on the Toronto Stock Exchange (under the name Claricia). As part of this change, roughly one-third of Mutual’s policy holders elect- ed to receive cash for their ownership, while the rest chose to take publicly traded shares in the new company. Many people recently received a rather thick and somewhat intimidating pack- age from their life insurers, bur have procrastinated about opening and carefully review- ing their “demutualization information package.” While these weighty information packages are unlikely to be mistaken for interesting read- ing, there’s more at stake than cy name change and a quick pay day. To make a good decision when it’s time to cast your vote, it’s impor- tant to have a full understand- ing of the implications for pol- icy holders and the transition process. While there is no substitute tor professional consultation and a complete review of vour information package, here are some answers to common westions News readers had following my first column on this subject: What is the impact to my policy benefits? The short answer: none. Premiums, policy benefits and annuity payments will all remain unchanged. How many shares will I et? Check the inside of your information package or phone the company. An actuarial for- mula (nor for the faint of heart) approved by manage- ment and regulatory watch- dogs determines how the value of the mutual insurance com- pany will be allocated to par- ticipating policy holders. The size of death benefit, age of policy, cumulative premiums paid, and current cash surren- der value are all taken into account. Do I have to pay taxes on the cash or shares I receive? Take a wild guess. Payments for cash will be taxed as a dividend in the year they are received. [f you are a senior receiving Old Age Security (OAS), pay particu- larly close attention to the effect this will have on your tax return. A jump in your taxable income could make for 2 nasty surprise and an OAS clawback. Policy holders who elect to receive shares will not be taxed when the shares are received. However, the eventual sale, transfer of ownership or rolling of the shares into an RRSP will result in a capital gain being realized on the full value of the shares at that time. Before making a decision to receive either cash or shares in your insurance company, take stock of your own per- sonal financial circumstances and investment objectives. Taking shares is an invest- ment, and you should ensure that it meets your specific objectives and that you are prepared to accept the level of risk that comes with investing in the stock market. [n con- sadering your specific tax situ- ation, always seek advice from a qualified tax adviser. For more information on demutualization, visit any of the Web sites of the compa- nies involved or the Canadian Life and Health Insurance Association at . Review student loan plans enabling you to retire earlier — or richer. be Pay for adequate insurance A iio enough money for igher education bills in case of death or disability; @ With a sideline or even full- time business, pay your kids a reasonable amount (check with your accountant) to work for you. You deduct this expense in your higher tax bracket, they pay less or no tax — and save this money for their higher “44 stacking bar sHeols, 2" square. table education. If they do pay tax, they could contribute to an RRSP, which could then be used to fund col- lege expenses. Finally, discuss with the kids and write down how much financial help you are Prepared to provide and in what format —- for example, you'll pay everything as long as they keep passing, you'll just provide room and board, or you'll only match what they International Radio & T.V. Personalities earn, win or borrow. Also review student loans with them: how much it’s practical to borrow given the expected job and income. Mike Grenby is a columnist and independent _ personal financial adviser. He'll ansver questions in this column as: space allows but cannot reply personally. Contact him at PO. Box 50029, South Slope R.P.O., Burnaby, B.C. V5] 5G3; ——e- mail . Find out more about yourself from these gifted channels! SUE ANDERSON - Tarot MOREEN REED - Astrologist ELIZABETH ADAMS - Psychic Conseitant "+ CAROL ANNE - Channel | ANGELA GERHART - Aura / Angels. ANASTASIA KLONARAKIS - Clairvoyant SANDRA FISHER - Palmist ..AND MORE, CAPILAN O MALL (near food fair) Monday, June 28th - Sunday, July 4th (during Mall hours) § For information phone 263-6524 - Sue Anderson ‘