Disability insurance is also known as disability income insurance.
Disability insurance will replace a part of your income that you were earning if you cannot return to work after an injury.
It can cover a portion of your financial needs if you cannot return to work in case of long term injury.
Usually, benefits are provided monthly so the policyholder can continue meeting their regular expenses and maintain their standard of living.
Contributions are tax-deductible: You claim your RRSP contribution as a deduction on your tax return. If your income is lower in a year, you can carry forward the deduction for your contribution to a future year when your income may be higher.
Savings grow Tax-Free: Investment earnings are tax-free as long as they are in an RRSP account. This tax-free compounding allows your savings to grow faster.
Get regular payment when you retire: You can withdraw RRSP back annually after retirement.
You can borrow from your RRSP to buy your first home.
RRSP of your spouse can reduce your combined tax burden: If you earn more money than your spouse, you can help him/her to save tax-free savings by investing in a spousal RRSP account. At the time of retirement, your tax burden is reduced.
To have earned employment income and have a T4. You need to be a Canadian citizen or Permanent Resident. Contact us for more information on the RRSP.
*Last date for making RRSP contribution for 2020 is the 1st of March 2021.
