Building a Risk Management Plan Dawit Hamilton and Johny Zolis Regional Sales Directors Individual Insurance and Savings 1 FOR REPRESENTATIVES' USE ONLY
SOLO Essential Dawit Hamilton, BA,CFP,CLU, CHS, PFP Regional Sales Director- Individual Insurance Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company. TM Trademark owned by Desjardins Financial Security, Life Assurance Company
Did you know? • 3.8 million Canadians live with disabilities. That is 13.7% of the adult population • 1 in 3 chance that you will experience a disability that lasts 90 days or more before the age of 65 • The average length of a long-term disability is almost 3 years • 50% of bankruptcies and mortgage foreclosures are caused by a disability 3 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY
Why Disability insurance is so important • Employment Insurance sickness benefits only last 15 weeks • Canada Pension Plan disability benefit has strict eligibility requirements • Workers Compensation provides adequate coverage but only 10% of disabilities are work related 4 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY
SOLO Essential Disability Income • Provides a tax-free monthly benefit in the event of an accident or illness • Provides protection up to age 75 for accident and to age 70 for illness • Accident coverage is affordable and easy to qualify for by answering 3 simply questions 5 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY
Target Market Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company. TM Trademark owned by Desjardins Financial Security, Life Assurance Company
A WIDE RANGE OF CLIENTS • Clients with a limited budget • Self Employed • Blue Collar jobs such as trade workers, construction workers, landscapers, roofers, drivers (taxi or truck) • Employee with group insurance • Home based workers • Newly employed 7 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY
Product Highlights 8 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY
AT A GLANCE BASE: OPTION: DISABILITY INCOME – ILLNESS DISABILITY INCOME – ACCIDENT 24-Hour Protection OR Non-Work-Related Protection OPTIONAL RIDERS ACCIDENTAL FRACTURE ACCIDENTAL DEATH OR DISMEMBERMENT � $100,000 � $400,000 � $200,000 � $500,000 � $300,000 9 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY
COVERAGE DESCRIPTION Accident coverage (basic) Issue age 18 to 69 years old � 0 day (accident only) � 30 days Waiting period � 120 days � 5 years (class 1 to 5b) � Up to age 70 (class 1 to 4) Benefit period Coverage duration Up to age 75 Option for accident � 24 hours � Non-work-related coverage only 10 FOR REPRESENTATIVES' USE ONLY
COVERAGE DESCRIPTION Illness coverage (option) Issue age 18 to 64 years old � 30 days � 120 days Waiting period � 5 years (class 1 to 5b) � Up to age 70 (class 1 to 4) Benefit period Coverage duration Up to age 70 11 FOR REPRESENTATIVES' USE ONLY
COVERAGE DESCRIPTION Accident and Illness coverage Occupation class 1, 2, 3, 4, 5 and 5b Class 1 and 2: $500 to $6,000 Monthly benefit Class 3, 4, 5 and 5b: $500 to $5,000 Current occupation 36 months Partial disability 6 months, included Assistance service Advance Medical 12 FOR REPRESENTATIVES' USE ONLY
Guaranteed acceptance for Accident coverage 13 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY
ONLY 3 QUESTIONS YES NO • Do you have physical limitations resulting from an injury or a medical condition or are � � your daily activities currently limited or restricted by an injury or a medical condition? � � • Are you currently working a minimum of 20 hours per week, 35 weeks per year? � � • Are you a Canadian citizen or a permanent resident (Landed Immigrant)? 14 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY
Accident coverage issued within five days- guaranteed 15 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY
ACCIDENT COVERAGE ISSUED WITHIN FIVE DAYS – GUARANTEED • No MIB involvement • No underwriting! • No attending physician’s statement The application is processed by the New Business team. 16 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY
No proof of income required with application 17 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY
A FLEXIBLE INSURABLE INCOME CALCULATION FORMULA Same as SOLO Disability Income OR 50% of gross revenue Gross revenue definition • The company’s revenue before operating expenses and taxes, but after deducting the cost of merchandise sold and any salary, wages or bonus paid to employees, excluding amounts paid to the insured. If your client does not hold 100% of the company’s shares, multiply the total amount by the percentage of shares they own. 18 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY
How to calculate rates 19 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY
Rate Table 20 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY
WHAT’S INSIDE: Representative’s Application Client’s brochure Guide 21 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY
22 of 23 Building a risk management plan in these current economic times Bridgeforce 2015 Professional Development Day April 2015 Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company
Canadian Retirees Are In Trouble? 2014 Survey stating that 31% were back to work full time! Page 23 de X
Helios2 Contract What's new 3 distinct Guarantees Your clients must choose one of these three Guarantees when they purchase their Contract. This choice cannot be changed. Please note that our defined terms can be found in the Contract and Information 24/47 Folder. THIS PRESENTATION IS NOT ELIGIBLE FOR CE CREDITS FOR REPRESENTATIVES' USE ONLY
Three Guarantees, three target clienteles New Retired or nearing Wealth accumulators Wishing to leave an retirement Business owners inheritance 25/47 THIS PRESENTATION IS NOT ELIGIBLE FOR CE CREDITS FOR REPRESENTATIVES' USE ONLY
Prospect #1 – Jim Spendthrift Young Executive Growing Wealth Age: 40 years old • CFO of a startup social networking company • Wants to minimize his investment fees • Has a young family he wants to take care of in the event of a death Page 26 de X
27 of 23 Get bigger accounts • Do you have clients who could consolidate their savings with you? • Are they concerned about costs? • Do you want to convince a mass-affluent or high-net-worth client to place their confidence in you? Series 7 funds • Contracts with an initial deposit of $250,000+ • 50 basis points off the management expense ratio (MER) Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company
Series 7 – Saving Clients Money Fee for Fee for HNW Fund Series 6 Series 7 Series 6 Series 7 Savings ($250k) ($250k) DFS GIF Bissett Canadian Balanced Fund 2.61% 2.00% $6,525 $5,000 $1,525 DFS GIF Fidelity True North Fund 3.04% 2.59% $7,600 $6,475 $1,125 DFS GIF CI Cambridge Cdn Asset Allocation 2.69% 2.30% $6,725 $5,750 $975 DFS GIF Balanced Average Balanced VS. Portfolio 75/75 (Series 7) Fund MER In Canada* 2.15% 2.13% 2.15% *Morningstar's 2013 Global Fund Investor Experience Report
29 of 23 Guaranteed Investment Fund managers 36 Funds offered by exclusive and experienced managers: Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company
"Inheritances represent a game-changer of seismic importance for the future financial services playing field." – Investor Economics, 2013 Household Balance Sheet 65% $895 20% Of successors will be age 45 or Billion over the next 10 Turnover rate in all financial assets years over FOR REPRESENTATIVES' USE ONLY THIS PRESENTATION IS NOT ELIGIBLE FOR CE CREDITS
Probate fees and more The execution of a will takes time and money * Source: CCH Canadian Limited, 2011. Fees vary from province to province. Information for a specific province should be consulted for an accurate figure.
The Benefit of Managing Estate Costs Estimated Annualized Estate Avoidance Advantage~ Gross MER* 10 years 15 years 20 years 25 years Average - all Mutual Funds 2.05% 0 0 0 0 Average yearly savings assuming a 10% estate 0.96% 0.66% 0.48% 0.38% settlement cost Estimated Net Management Expense Ratio Average - All Segregated Funds 2.85% 1.89% 2.19% 2.37% 2.47% Page 32 de X
Prospect #2 – Patrick Taxavoyder Thinking about the tax man Age: 60 years old • Autoworker with 5 years to retirement • Wife is a nurse, also planning to retire at same time • Heard about a TFSA savings account from his credit union with a great rate guaranteed interest rate • Worried about future OAS Clawback as a result being in a high tax bracket in the future • Has health concerns making insurance coverage too expensive 33
What Is A TFSA? 34
TFSA Tax Benefit Highlights 35
OAS Clawback a Concern Source: http://cashflowforlife.ca/retirement-center/reduce-oas-clawback 36
TFSA Versus Non-Registered Savings – Tax Benefit Calculation 37
Return Differential Between a TFSA and a Non-Registered Account 38
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