Building a Risk Management Plan Dawit Hamilton and Johny Zolis - - PowerPoint PPT Presentation

Building a Risk Management Plan

Dawit Hamilton and Johny Zolis Regional Sales Directors Individual Insurance and Savings

1 FOR REPRESENTATIVES' USE ONLY

Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company.

SOLO Essential

Dawit Hamilton, BA,CFP,CLU, CHS, PFP Regional Sales Director- Individual Insurance

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

Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company.

Target Market

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

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Product Highlights

8 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY

9 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY

AT A GLANCE

DISABILITY INCOME – ACCIDENT 24-Hour Protection OR Non-Work-Related Protection DISABILITY INCOME – ILLNESS

ACCIDENTAL FRACTURE ACCIDENTAL DEATH OR DISMEMBERMENT

$100,000 $400,000 $200,000 $500,000 $300,000

BASE: OPTION: OPTIONAL RIDERS

COVERAGE DESCRIPTION

10 FOR REPRESENTATIVES' USE ONLY

Accident coverage (basic)

Issue age

18 to 69 years old

Waiting period 0 day (accident only) 30 days

120 days

Benefit period

5 years (class 1 to 5b) Up to age 70 (class 1 to 4)

Coverage duration

Up to age 75

Option for accident coverage only 24 hours Non-work-related

COVERAGE DESCRIPTION

11 FOR REPRESENTATIVES' USE ONLY

Illness coverage (option)

Issue age

18 to 64 years old

Waiting period

30 days 120 days

Benefit period

5 years (class 1 to 5b) Up to age 70 (class 1 to 4)

Coverage duration

Up to age 70

COVERAGE DESCRIPTION

12 FOR REPRESENTATIVES' USE ONLY

Accident and Illness coverage

Occupation class

1, 2, 3, 4, 5 and 5b

Monthly benefit

Class 1 and 2: $500 to $6,000 Class 3, 4, 5 and 5b: $500 to $5,000

Current occupation

36 months

Partial disability

6 months, included

Assistance service

Advance Medical

Guaranteed acceptance for Accident coverage

13 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY

• ONLY 3 QUESTIONS
• 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

YES NO

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

16 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY

The application is processed by the New Business team.

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.

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How to calculate rates

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Rate Table

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WHAT’S INSIDE:

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Representative’s Guide Client’s brochure Application

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Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company

Bridgeforce 2015 Professional Development Day

April 2015

Building a risk management plan in these current economic times

Canadian Retirees Are In Trouble?

Page 23 de X

2014 Survey stating that 31% were back to work full time!

Helios2 Contract What's new

distinct Guarantees

Your clients must choose one of these three Guarantees when they purchase their Contract. This choice cannot be changed.

3

FOR REPRESENTATIVES' USE ONLY

Please note that our defined terms can be found in the Contract and Information Folder.

24/47 THIS PRESENTATION IS NOT ELIGIBLE FOR CE CREDITS

Three Guarantees, three target clienteles

Wealth accumulators Business owners Retired or nearing retirement Wishing to leave an inheritance

New

FOR REPRESENTATIVES' USE ONLY 25/47 THIS PRESENTATION IS NOT ELIGIBLE FOR CE CREDITS

Prospect #1 – Jim Spendthrift

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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

• f a death

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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)

Series 7 – Saving Clients Money

*Morningstar's 2013 Global Fund Investor Experience Report

DFS GIF Balanced Portfolio 75/75 (Series 7)

2.15%

VS.

Average Balanced Fund MER In Canada*

2.15% 2.13%

Fund

Series 6 Series 7 Fee for Series 6 ($250k) Fee for Series 7 ($250k) HNW Savings

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

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36 Funds offered by exclusive and experienced managers:

Guaranteed Investment Fund managers

FOR REPRESENTATIVES' USE ONLY THIS PRESENTATION IS NOT ELIGIBLE FOR CE CREDITS

"Inheritances represent a game-changer of seismic importance for the future financial services playing field."

– Investor Economics, 2013 Household Balance Sheet

$895

Billion over the next 10 years

20%

Turnover rate in all financial assets

65%

Of successors will be age 45 or

• ver

Probate fees and more

* Source: CCH Canadian Limited, 2011. Fees vary from province to province. Information for a specific province should be consulted for an accurate figure.

The execution of a will takes time and money

The Benefit of Managing Estate Costs

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Gross MER* 10 years 15 years 20 years 25 years Average - all Mutual Funds 2.05% 0.96% 0.66% 0.48% 0.38% Average - All Segregated Funds 2.85% 1.89% 2.19% 2.37% 2.47% Estimated Annualized Estate Avoidance Advantage~ Estimated Net Management Expense Ratio Average yearly savings assuming a 10% estate settlement cost

Prospect #2 – Patrick Taxavoyder

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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

What Is A TFSA?

34

TFSA Tax Benefit Highlights

35

OAS Clawback a Concern

36 Source: http://cashflowforlife.ca/retirement-center/reduce-oas-clawback

TFSA Versus Non-Registered Savings – Tax Benefit Calculation

37

Return Differential Between a TFSA and a Non-Registered Account

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Helios2 – 75/100 i What does this Guarantee offer?

Available up to age 80.

75%

Protection at Contract maturity

The greater of:

• Market value of all

Units attributed to the Contract

• 75% of all Deposits,

less adjustments for withdrawals When the Annuitant reaches age 105.

100%

Protection

• n the Annuitant's death

The greater of:

• Market value of all Units

attributed to the Contract

• Minimum Death Benefit

Amount (equal to 100% of the value of each Deposit) Death Benefit paid quickly to the Beneficiary and not part of the Estate.

inflation

Death Benefit Reset every year

The greater of:

• Current Minimum Death

Benefit Amount

• Market value of Units

attributed to the Contract

• Inflation-adjusted value

Up to age 75.

The market value of the Units is calculated at the next valuation date following the Contract Anniversary Date. The Minimum Maturity Benefit Amount, the Minimum Death Benefit Amount and the inflation-adjusted value are decreased proportionally for any Units that may have been redeemed. Refer to the Contract and Information Folder for more information about Helios2 – 75/100 i.

Still unique in Canada!

+

FOR REPRESENTATIVES' USE ONLY 39/47 THIS PRESENTATION IS NOT ELIGIBLE FOR CE CREDITS

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THIS PRESENTATION IS NOT ELIGIBLE FOR CE CREDITS FOR REPRESENTATIVES' USE ONLY

Helios2 – 75/100 i Competitive advantages

Age This example is provided for illustration purposes only. It is not an indication of future

• results. This graph shows a

simulation of the annual automatic reset of the guaranteed Death Benefit. An inflation rate of 2.5% and fluctuating yields (10% volatility) averaging -4% were used.

Helios2 Contract Death Benefit Competition’s death benefit Market value

Death Benefit by company

Market downturns

$180,000 $160,000 $0 $140,000 $120,000 $100,000 $60,000 $40,000 $20,000 $80,000

Value ($)

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Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company.

THIS PRESENTATION IS NOT ELIGIBLE FOR CE CREDITS FOR REPRESENTATIVES' USE ONLY

Helios2 – 75/100 i Competitive advantages

Age This example is provided for illustration purposes only. It is not an indication of future

• results. This graph shows a

simulation of the annual automatic reset of the guaranteed Death Benefit. An inflation rate of 2.5% and fluctuating yields (10% volatility) averaging 0% were used.

Helios2 Contract Death Benefit Competition’s death benefit Market value

Death Benefit by company

Stable markets

$180,000 $160,000 $0 $140,000 $120,000 $100,000 $60,000 $40,000 $20,000 $80,000

Value ($)

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Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company.

THIS PRESENTATION IS NOT ELIGIBLE FOR CE CREDITS FOR REPRESENTATIVES' USE ONLY

Helios2 – 75/100 i Competitive advantages

Age This example is provided for illustration purposes only. It is not an indication of future

• results. This graph shows a

simulation of the annual automatic reset of the guaranteed Death Benefit. An inflation rate of 2.5% and fluctuating yields (10% volatility) averaging 4% were used.

Helios2 Contract Death Benefit Competition’s death benefit Market value

Death Benefit by company

Market upturns

$250,000 $200,000 $50,000 $0 $150,000 $100,000

Value ($)

Beating Out the Return Potential of the Guarantees on a Term Deposit TFSA

43

Original Deposit Amount = $31,000 Year CPI (%)* Inflation DB Guarantee 1999 1.8 $31,558 2000 2.7 $32,410 2001 2.5 $33,220 2002 2.2 $33,951 2003 2.8 $34,901 2004 1.8 $35,530 2005 2.2 $36,311 2006 2.0 $43,574 2007 2.2 $44,532 2008 2.3 $45,556 2009 0.3 $45,693 2010 1.8 $46,516 2011 2.9 $47,865 2012 1.5 $48,583 2013 0.9 $49,020

DB Inflation increases to $49,020!!

*Source: http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/econ46a-eng.htm

Helios2 – 75/100 i Advantages

This simulation is neither an indication nor a guarantee of future results. Please refer to the Contract and Information Folder for more details about the automatic resets of the Minimum Death Benefit Amount.

Inflation-adjusted value

• Initially equal to 100% of the value of the Deposits paid into the

Contract.

• Adjusted annually on the Contract Anniversary Date based on

the consumer price index (CPI).

• Annual adjustments end when the Annuitant turns 75.

ESTATE PROTECTION AGAINST INFLATION

Still unique in Canada!

FOR REPRESENTATIVES' USE ONLY 44/47 THIS PRESENTATION IS NOT ELIGIBLE FOR CE CREDITS

The Best Way To Guarantee Estate Value Appreciation

Page 45 de X

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2015 promotion

GLWB Bonus Rate of 5.5% for 2015

• For 2015 only, Desjardins Insurance will use 5.5% or the rate
• btained by applying the calculation formula used to determine the

GLWB Bonus Rate, whichever is higher.

• Promotion applicable to Contracts with Helios2 – 75/100 GLWB as

the selected Guarantee from which no withdrawals were made in 2015.

• Paid on the GLWB Bonus Base, which is 100% of the value of each

Deposit made since the Contract was opened. Key dates:

• New Contracts must be opened before: December 18, 2015
• Bonus will be attributed to all elligible Contracts on: December 31,

2015

Promo

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Helios2 – 75/100 GLWB

GLWB Withdrawal Percentage

Age of Annuitant One Annuitant Two Annuitants 55 to 59 3.0% 2.5% 60 to 64 3.6% 3.1% 65 to 69 4.1% 3.6% 70 to 74 4.6% 4.1% 75 + 5.0% 4.5% If the GLWB Protected Value is reset on the Contract Anniversary Date, the GLWB Withdrawal Percentage will also be reset based on the Annuitant’s age

• n that date.

FOR

47/47 THIS PRESENTATION IS NOT ELIGIBLE FOR CE CREDITS

CASE STUDY

• Joe, 45, Plumber, single
• Earns $80,000
• Been self employed for
• ver 10 years
• Has $15,000 in non-

registered assets

• Has a close relationship

with his neice and nephew

48 FOR REPRESENTATIVES' USE ONLY

49 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY

Helios2 75/100 - GLWB

50 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY

• Create his own pension plan

Call to action! For a limited time only $10,000 GLWB minimum Opportunity to make regular contributions

• Add creditor protection through the segregated fund contract
• Simplify the estate settlement through named beneficiaries

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THIS PRESENTATION IS NOT ELIGIBLE FOR CE CREDITS FOR REPRESENTATIVES' USE ONLY

Johny Zolis Regional Sales Director, Individual Savings Golden Horseshoe & GTA West 416-926-2700 ext. 2026 Toll Free: 1-877-906-5551 ext. 1635 Cell: 416-567-0442 Email: jzolis@dfs.ca Dawit Hamilton Regional Sales Director, Individual Insurance Golden Horseshoe & GTA West 416-926-2700 ext. 2066 Toll Free: 1-877-906-5551 ext. 2066 Cell: 289-439-2459 Email: dawit.hamilton@dfs.ca

Contact Information