A "Guaranteed" Option

When it comes to life insurance you may be inclined to avoid the "bells and whistles" that are available on your policy, believing they are simply being up-sold. But the benefits of some riders deserve serious consideration, as they can save you a great deal of aggravation down the road. Among the most valuable riders are those that guarantee your insurability down the road. For example: If you were to buy an original insurance policy at age 50, but determine that you needed increased coverage 10 years later, you would face fresh underwriting at age 60. You have two things working against you: (1) you're older, so your costs will most likely be higher; and (2) you may have an insurability issue that you didn't have 10 years ago.

Enter the guaranteed insurability option (GIO), which allows the insured to buy additional coverage within a set timeframe typically 10 years without undergoing another round of medical underwriting. But, you cannot simply request this option on a hunch you might need it rather, you have to disclose to the insurer why you want that ability to buy more insurance later on. One of the best examples would be a business owner who can legitimately demonstrate that their business should be worth more ten years down the road than it is at the time they take out the original policy. There is often an increase in the cost of the policy, but in many cases it can be well worth it.

And, the GIO rider is not restricted to life policies. There is potentially an even greater need for guaranteed insurability on income replacement, or disability insurance, policies. For example: A 45-year old earning $60,000 per year may buy disability insurance to cover their current T4 income but, over the ensuing decade, they could be earning many times more than what they were earning when they first bought the policy. Having a rider that says as you make more money, you can buy more coverage without medical evidence can be a very attractive 'perk'.

Local Business Owners Pretty Happy

Around 84 per cent of small-business owners in Ottawa are happier owning and running their own business than being an employee, according to numbers released by the TD Small Business Happiness Index last week. Overall happiness ranked at 27 per cent, placing owners in the city at the third-happiest in Canada -- just behind Calgary (30 per cent) and Montreal (29 per cent). According to TD, the following factors contributed to small-business happiness:

• Pride and accomplishment from owning your own business (93 per cent);
• Volunteering or donating money to local charities or sports teams (93 per cent);
• Feeling a "deep personal connection" to employees and customers (85 per cent).

Other benefits included being your own boss and setting your own schedule, although long hours were a staple of business -- at an average of 50.4 hours a week, among the top three in North American cities surveyed. Forty-three per cent of owners worked more than 60 hours a week. The survey was conducted by Environics Research, and polled 1,213 small-business owners between May 13 and June 15 -- including 101 small business owners in Ottawa.

Focus on Real Estate

The annual rate of housing starts across the country slipped to 189,200 last month, a 1.6% decline from the June rate, says Canada Mortgage and Housing Corp. The agency blamed the decline on a decrease in urban single starts and a reduction in rural starts, but that the drop was partially offset by multiple starts. Of note:

• Urban starts increased by 1.9% to 169,300 units in July.
• Urban multiple starts increased by 13.4% to 101,400 units
• Single urban starts dropped 11.3% to 67,900 units.
• July's annual rate of urban starts decreased 14.8% in BC, 2.6% in Ontario, and 0.4% in Quebec.
• Urban starts increased 37.7% in the Atlantic Region and 14.4% in the Prairie Region.
• Rural starts were estimated at an annual rate of 19,900 units in July.

However, CHMC also reports year-over-year figures show housing starts in Ottawa bumped up 40 per cent to 763 units in July. Most starts in the city core came from apartments -- 235 starts out of a total of 281. Meanwhile, town homes fuelled the bulk of the growth in Nepean, Kanata and Goulbourn, while single homes formed the majority in Osgoode and Rideau Township.

"Intense activity was witnessed in all housing types, most notably in the apartment segment. As well town homes reached the highest year-to-date totals in 15 years driving total housing starts higher," stated Sandra Prez Torres, CMHC's senior market analyst for eastern and northern Ontario. "Job growth has reached record levels in recent months, helping to maintain activity in the Ottawa housing market. First-time purchasers were still prevalent as the demand for town homes and apartments has been the primary driver of growth so far this year." Year-over-year, old Ottawa led the number of housing starts in the region, although on a year-to-date basis Nepean held the most housing starts.

In a related story, the Financial Consumer Agency of Canada (FCAC) has completely updated its consumer mortgage guide, The ABCs of Mortgages, to take into account the different needs of Canadian consumers. The FCAC says it is essential that consumers get informed before they plunge into the world of real estate. It could save them money and headaches "The financial market is complex. That's why we strive to develop tools and resources that are easy to consult and use," says FCAC Commissioner Ursula Menke. "We cannot stress enough how important it is to shop around before signing a mortgage agreement. The ABCs of Mortgages contains a range of objective information that will help consumers make informed choices about their mortgages."

The revised version of the guide is divided into four parts: each one addresses a specific topic, making the publication more concise and easier to read. "Whether consumers are preparing to buy their first home, taking out a home equity loan, renegotiating their mortgage, or searching for ways to pay off their mortgage faster , the new version of The ABCs of Mortgages will help them find the information they need more quickly," adds Menke.