HFI Financial

Group of Companies



  Keith L. Hatton, CEO

of HFI Financial Group of Companies
President of Hatton Financial Inc.




REVIEWING YOUR ESTATE PLAN Whether your estate is large or modest, it is always a good idea to review it regularly to ensure that it continues to meet your objectives and keep up with any changes in your financial or family situation.  If you do not have an estate plan, perhaps now is the time to consider implementing one as it is never too soon to start the planning process.  The objective of an estate plan is the orderly distribution of one’s assets to intended beneficiaries with a minimum of taxes, expenses, and emotional turmoil.   The foundation of any estate plan is the Last Will and Testament.  This is the document that instructs your executor how your estate is to be distributed and to whom.  Unfortunately, you won’t be there [more]


CRITICAL ILLNESS FOR JUVENILES  Many people recognize the need for Critical Illness insurance to protect them from the financial risk that could result if diagnosed with a life threatening illness.  Although a difficult subject to think about, children should also be protected from this risk as well.  If our children were to become ill the emotional and financial toll it could have on the family may equal that of the parent. Juvenile Critical Illness provides options: To find and provide the best treatment and care for your child.  Often, treatment can be very expensive, especially if the best available is outside of Canada.  Most parents would not spare any expense of this nature when it comes to their children and having tax free funds for [more]

What Are Segregated Funds & Are They Right For Me?

What Are Segregated Funds & Are They Right For Me?It can be confusing in the world of investment choice.  Do you sacrifice security for higher returns?  Or do you take the safe path and go the guaranteed route locking yourself into low returns?  Fortunately for Canadian investors there is another option: Segregated Funds.   What are Segregated Funds? Seg Funds are similar to mutual funds but only sold by life insurance companies which allow for the special “insurance” feature that makes segregated funds a safer investment.   Like Mutual funds, Segregated Funds usually have similar investment choices: Equity Funds Balanced Funds Bond Fun Money Market Funds Some newer products also offer Exchange Traded Funds [more]

A New Year’s Resolution You Shouldn't Break – Saving For Retirement!

A New Year’s Resolution You Shouldn't Break – Saving For Retirement!Many of us set New Year’s resolutions for ourselves and often those resolutions have to do with finances. January is the month we say, “Ok, this year I am going to save more and spend less”. This article won’t tell you how to spend less, but it will outline two government sponsored programs available to help you save for retirement or even just a rainy day! Of course these are not the only vehicles you can accumulate money with – those include anything from putting dollars under the mattress to the most sophisticated tax shelter schemes – but these two are the most popular.   Tax Free Savings Accounts (TFSA) This is the new kid on the block established by the government as of January 1, 2009. [more]

Four Things You Need To Know About Inexpensive Term Insurance

Four Things You Need To Know About Inexpensive Term InsuranceThe most basic form of insurance and the simplest to understand is Renewable and Convertible Term Insurance. Coverage is provided for a specified term, the policy renews automatically at the end each term period until the policy expires, most commonly at age 85.  This plan has the lowest initial cost at entry, but don’t be mesmerized by the low cost because on renewal you will pay a substantial increase.  If, however, you become uninsurable before the end of the term period you will have no other option but to renew or convert it to a permanent plan if you want to keep the coverage. Most companies offer a 10 year and 20 year renewable term policy and, recently, some have started to provide a 30 year term.  So how do [more]


SEGREGATED FUNDS - INVESTING WITH A SAFETY NETInvesting today is not for the faint of heart.  Fortunately for Canadians, segregated fund products offered by many life insurance companies provide a safety net for nervous investors.   Segregated Fund product presents some interesting opportunities for people looking to get more stability in their investment portfolios.     100% Maturity and Death Benefit Guarantee   At a time when most companies are reducing their guarantees to 75%, companies like Standard Life are offering 100% guarantees for both maturity value and death benefit.     At the maturity date, the value of the investment will be the greater of the market value or 100% of the sum of deposits less any [more]

Guaranteed Level of Cost Insurance – Get it While You Still Can!

Guaranteed Level of Cost Insurance – Get it While You Still Can!The equity markets of the past four years plus the prevailing low interest rate environment have combined to have a dramatic effect on the Canadian life insurance industry.  What this means for consumers is that many of the products that are currently being used for effective estate plans and long term financial planning may soon no longer be available, or if they are, they will be priced significantly higher than they are today. The four primary factors that enter into the pricing of a life insurance product are mortality, expenses, persistency and investment returns.  It is the latter that is of considerable concern to the life companies.  Recently, long bond rates fell to the lowest rate seen in 100 years.  The [more]


HOW MUCH RISK CAN YOU TOLERATE?  Part ThreeOver the past two months we have examined some of the risks that challenge most of us.  It is almost impossible to avoid risk entirely. Knowing where the pitfalls lie and planning for them will certainly help.  You might, however, want to consider shifting the risk to someone else, like a life insurance company.  Life insurance companies are in the risk business and they have products and services that can assist you in dealing with risk.  Some of these are as follows:   Segregated Funds provide both maturity and death benefit guarantees so as to protect your invested capital from loss.  The investment options offered in these plans range from pure equity funds, to bond funds and fixed income [more]


HOW MUCH RISK CAN YOU TOLERATE? Part TwoLast month we discussed how much risk you could tolerate depending on your life situation.  This month we will consider other risks to which each of us are exposed:     Market Risk:  We all have experienced the effects of a volatile market and the havoc it can cause both financially and emotionally.  Since mid 2008 the market has experienced “saw tooth” rates of return and many have fled the equity markets in an attempt to avoid this volatility and the risk that comes with it.  For those that were in the process of retiring and were still in equity funds, many had to put retirement on hold.   Business Risk:  It has been estimated that those who own and operate businesses have 50% or more [more]


HOW MUCH RISK CAN YOU TOLERATE? Part OneWill Rogers, the American humorist, when talking about the investment schemes in North America at the time, said “I am lessconcerned with the return on my money, than I am with the return of  my money”.  Will was aware of the truth that the higher the potential rates of return on an investment, the greater chance of loss.   The dictionary defines risk as the exposure of someone or something valued to danger, harm or loss.  If that something of value is your financial security the question is “How much risk can you tolerate?”  The answer to this question for each of us depends on a number of different factors.  A few of these are:   Your Age: Generally, the older you are the more [more]

Got an RSP and Turning 71?

Got an RSP and Turning 71?  If you have been accumulating wealth in a Registered Savings Plan and are turning 71 this year or next, you should be aware of the decisions you have to make.  The Income Tax Act says that you have to terminate your RSP’s by December 31st in the year you turn age 71.  In doing so, you basically have three options:   You can withdraw all the funds in your RSP in one lump sum.  Unless you have a negligible amount in your registered plan this is not a good option.  It kind of defeats the whole plan in having an RSP in the first place. You can transfer the balance of your Registered Savings Plan into a Retirement Income Fund (RIF).  This is a simple process involving the transfer of the assets. You can [more]

Is Your Insurance Planning Affected By The Recent Budget?

Is Your Insurance Planning Affected By The Recent Budget?    On March 21st, Finance Minister Jim Flaherty tabled his 2013 Federal Budget.  Some of the provisions of that document has or will have an impact on some life insurance products and/or strategies.  However, let’s start on a positive note. The Lifetime Capital Gains Exemption has been increased from $750,000 to $800,000 starting in 2014.  For the years after 2014, the LCGE will be indexed to inflation.  The Lifetime Capital Gains Exemption applies to capital gains realized by individual taxpayers on disposition of certain qualified property – shares in a Qualifying Small Business Corporation or eligible farm and fishing property.   For those individuals who have already claimed the old limit of [more]

Do You Fly South for the Winters?

Do You Fly South for the Winters?  RESIDENCY GUIDELINES FOR CANADIAN SNOWBIRDS  After another harsh winter, many Canadians dream of joining the large number of Snowbirds who make their way to the dry warmth of California, Arizona and Florida each winter season.  If you are contemplating, or already are, becoming a Snowbird and whiling away the winter months in warmer climes south of the border it is important to understand how the new U.S. Tax laws apply under these circumstances. The last thing you would want is to find that the Internal Revenue Service considers you a US resident making you liable for U.S. income tax or subject to U.S. penalties or both. There are many Canadians who have the long held belief that as long as they spend less than [more]

How Much Life Insurance Does A Business Need?

How Much Life Insurance Does A Business Need?  It is common business practice for a company to use corporate owned life insurance in several situations.  This article will identify those situations and discuss appropriate amounts of coverage for each of them.   SHAREHOLDERS’ AGREEMENTS – It is customary for a company with more than one shareholder to have in place an agreement between the shareholders which predetermines a course of action for specific situations.  This agreement should include a Buy/Sell provision which deals with how a share interest will be purchased or redeemed in the event that a shareholder relinquishes or wishes to relinquish his or her shares in the company, including the death.  The corporation will then insure each of [more]

Whole Life: A Whole New Investment Class

Whole Life: A Whole New Investment ClassThe recent developments in investment markets and the poor performance that has resulted have brought about a new appeal to an old workhorse.  For investors looking for a diversification in their investment portfolio and a more tax efficient fixed income investment alternative, a compelling argument can be made for the use of Whole Life Insurance.   Whole Life is a permanent insurance contract with level lifetime guaranteed premiums and tax advantaged cash value growth. If the contract also pays the policyholder annual dividends the Whole Life contract is referred to as participating.  These dividends can be taken in a number of different ways but the option most often selected to provide the [more]


FAMILY BUSINESS SUCCESSION AND ESTATE EQUALIZATION Most parents feel strongly about ensuring that their children are treated equally in their will. For many, this is a moral obligation, and, on the surface that would seem easy to accommodate. Often, however, this is not the case. Most estates are not totally liquid at the death of the testator and some assets are harder to divide than others. This is particularly true when a family business is involved, especially when many business owners have up to 80% or more of their wealth tied up in the family enterprise. How do we deal with the children who are not involved in the business when the children who are will receive the family company shares as their inheritance? While the desire may be to treat the children equally, [more]

The Stability of the Life Insurance Industry in Canada

The Stability of the Life Insurance Industry in CanadaGiven the problems encountered by some large financial institutions in the United States, how concerned should we be about the state of the life insurance industry in Canada?  It is a fact that over the past decade the number of life insurance companies operating in Canada has decreased dramatically.  This decrease is mainly due to the mergers and acquisitions of the existing companies.  For example, those individuals who maintained policies issued by Maritime Life, Commercial Union, North American Life, or Aetna Life, now find themselves insured by Manulife Financial. Today, insurance is one of the most closely regulated industries in Canada. Unlike the United States, in Canada, there is a government [more]