When you convert your RRSP to a RRIF or Registered Retirement
Income Fund, you continue to enjoy the benefits that you had
with your RRSP including tax-sheltered growth, investment control
and flexibility. RRIFs bring other benefits: they allow you
to vary your income stream from year to year (subject to a minimum
amount set by Canada Customs and Revenue Agency) and to make
additional withdrawals when needed.
For a pension plan to have tax exempt status, it must be registered
under the Income Tax Act and under either the federal Pension
Benefits Standards Act or under a provincial Pension Benefits
Act. Contributions are tax deductible by an employee and employer
within the federal taxation limits.
Any Canadian resident who is under age 69 with qualified earned
income can contribute to a Registered Retirement Savings Plan
(RRSP). The amount you can contribute depends on the income
you earned in the previous year and limits established by
Canada Customs and Revenue Agency. Benefits include tax-sheltered
growth, investment control and flexibility.
Regular Care of a Physician
To be considered totally or residually disabled, you must
be under the care of a physician that is appropriate in nature
and frequency for the condition.
'Regular Occupation' Definition of Disability
Some individual disability contracts use a 'regular occupation'
definition, which means that as long as you're not working
because you can't do your regular job, you're considered disabled.
However, you're no longer considered totally disabled if you
go to work at a new occupation. So, for instance, if you were
a dentist and lost the use of your arm, you would be considered
disabled. If you later start to work in a different field,
your total disability benefits would cease. You'll often find
income replacement plans that provide a 'regular occupation'
definition but only for the first two or five years of a disability.
After that, the definition may switch to an 'any occupation'
definition. This allows you a reasonable length of time to
change careers and resume a working life. This definition
does not apply to group benefit plans.
If your disability recurs within a specified time period from
causes that are the same as or related to the cause of your
prior disability, the subsequent disability is considered
a continuation of the first for the purposes of individual
disability insurance plans.
Some individual disability policies include a residual disability
definition, which typically means you're not totally disabled,
but due to sickness or injury, have an income loss of 20%
or more. Regular care from a physician is required.
An investment or co-mingled fund offered by a Canadian life
insurance company that invests in a portfolio of securities
on behalf of several investors. It is held separate from the
insurer's general assets and provides various insurance benefits.
For a critical illness insurance policy, this is the number
of days you must survive following the diagnosis of a covered
impairment in order for the benefit to be payable. This period
is normally 30 days following diagnosis in the definition
of the corresponding covered impairment.
Total Accumulated Value (Market Value)
The total accumulated value (or market value) of your plan
is determined as the sum of the accumulated unit value credited
to your plan in each segregated fund.
Depending on the specific individual disability insurance
policy, the definition for total disability may be based on
the regular occupation, own occupation or any occupation,
or a combination of these.
For group benefit plans, 'total disability' normally means
that solely because of an illness or accidental injury, you're
unable to perform the essential duties of your own occupation
(type of work, not just your own job) for a certain period
of time (often 24 months), and from then on unable to work
at any occupation for which you are or may reasonably become,
fitted by education, training or experience.