Simplified Issue Products Life Insurance Made Easy

Simplified Issue ProductsLife Insurance Made Easy

Agenda

• Canadian Life Insurance Market

• Simplified Issue Products– What is it and for whom?– Underwriting– Purpose

• Insurance Needs Covered– Funeral and final expenses– Probate fees– Income tax surprises

• Your Business

• Golden Protection

• Golden Protection Plus

Canadians UnderinsuredCanadians Underinsured

• About 2 in 10 households have NO life insurance at all.

• Of those that have coverage over 30% believe they need additional coverage.

• Only 23 percent of all households had an opportunity to buy through a personal meeting with a life agent .

• Almost HALF of Canadian households (6 million) admit they would have immediate trouble meeting expenses if a wage earner died.

• Not only are they underinsured … They Know It !!!

Source: LIMRA

Many Options

Term InsuranceTerm Insurance Mortgage InsuranceMortgage Insurance

Whole Life InsuranceWhole Life Insurance

Participating InsuranceParticipating Insurance

Universal Life InsuranceUniversal Life Insurance

How do simplified issue products fit in the picture?

What is it?• Does not require a medical exam, blood test, fluid

samples or doctor’s report.

• Easier to qualify for this type of life insurance than for traditional insurance.

• One of the fastest ways to get life insurance because of the simplified issue process.

Who is it for?

• People…– with certain issues that may cause a premium to be

rated or a refusal on a traditional life insurance; or

– who genuinely dislike needles or any type of medical exam; or

– looking for a simple and fast process to get life insurance; or

– who don’t want the value of their estate diminished by funeral costs and other final expenses; or

– who want the tax-free death benefit to be paid quickly.

Addressing Procrastination

• Many Canadians put off buying insurance because they anticipate a difficult process, thinking it’s complex and confusing.1

• Simplified issue products are:–easy to understand;–easy to apply for.

1. Source: Billion Dollar Baby - The Sales Potential of the Underinsured Life Market in Canada (2007), LIMRA

Underwriting• With simplified issue products like Golden Protection,

the questionnaire on the application represents the underwriting process.

• If all the answers to the questions are “no”, the client is insurable.

• Clients don’t have to wait for weeks before finding out whether they’re insured or not.

• No premium rating.

Underwriting Issues

• Height and weight restrictions

• Diabetes• DUI / Driving record• Drug or alcohol abuse

• Depression / Anxiety• MS / Parkinsons• High blood pressure• High cholesterol• Family health history

Some of the elements that make it hard for people to get insurance:

Who do you know are affected by one or more of these issues?

A simplified issue life insurance like Golden Protection could be the solution for them.

What about cost?• Premiums for a simplified issue life insurance are

higher than those of a traditional whole life policy issued at the regular rate.

• This is due to the higher risk taken by the insurance company on this type of product.

• However, premiums for a simplified issue product may be lower than you think!

Cost ExampleAnnual premium for $25,000 face amount for 60 year-

old male non-smoker

*Lowest premium in LifeGuide Sept. 2012 edition for the WL/Guaranteed Life Pay category.


old male non-smoker

*5th lowest premium in LifeGuide Sept. 2012 edition for the WL/Guaranteed Life Pay category.


old female non-smoker

*Lowest premium in LifeGuide Sept. 2012 edition for the WL/Guaranteed Life Pay category.


old female non-smoker

* 5th lowest premium in LifeGuide Sept. 2012 edition for the WL/Guaranteed Life Pay category.

What is it for?

• Due to the simple underwriting process, face amounts available are lower than traditional products.

• Mostly used to cover funeral costs and other final expenses.

• They can also be used to:– Cover small debts;– Grow the estate to be passed on to loved-ones;– Give to a charitable organization.

Funeral Cost

According to the Board of Funeral Services, the average cost of a funeral is around $5,500.

If you add up the flowers, reception, and casket that cost goes up to $9,000-$10,000 on average.

The government pays a maximum lump sum death benefit of $2,500. In some cases, it will be less.

Final Expenses• Can include:

– Probate fees (based on estate value, varies by province and territory)

– Other legal fees– Accounting fees– Executor compensation– Income taxes

Probate Fees in CanadaValue of Estates Probate Fees

British Columbia

$0 to $25,000$25,001 to $50,000$50,001 or more

$0$208 + 0.6% of value in excess of $25,000$358 + 1.4% of value in excess of $50,000

Alberta $0 to $10,000$10,001 to $25,000$25,001 to $125,000$125,001 to $250,000$250,001 or more

$25$100$200$300$400 Maximum

Saskatchewan Any amount 0.7% of estate value

Manitoba $0 to $10,000$10,001 or more

$70$70 + 0.7% of value in excess of $10,000

Source: Financial Advisor’s Pocket Reference 2011-2012, CCH

Probate Fees in Canada

Value of Estates Probate Fees

Ontario $0 to $50,000$50,001 or more

0.5% of estate value$250 + 1.5% of value in excess of $50,000

Québec Any amount N/A (court verification fee only for non-notarial will)

New Brunswick

$0 to $5,000$5,001 to $10,000$10,001 to $15,000$15,001 to $20,000$20,001 or more

$25$50$75$1000.5% of the estate value

Newfoundland & Labrador

$0 to $1,000$1,001 or more

$85$85 + 0.5% of value in excess of $1,000


Probate Fees in Canada

Value of Estates Probate Fees

Prince Edward Island

$0 to $10,000$10,001 to $25,000$25,001 to $50,000$50,001 to $100,000$100,001 or more

$50$100$200$400$400 + 0.4% of value in excess of $100,000

Nova Scotia $0 to $10,000$10,001 to $25,000$25,001 to $50,000$50,001 to $100,000$100,001 or more

$77.00$193.61$322.31$902.03$902.03 + 1.523% of value in excess of $100,000


Probate Fees in CanadaValue of Estates Probate Fees

Nunavut $0 to $10,000$10,001 to $25,000$25,001 to $125,000$125,001 to $250,000$250,001 or more

$25$100$200$300$400

Northwest Territories

$0 to $10,000$10,001 to $25,000$25,001 to $125,000$125,001 to $250,000$250,001 or more

$25$100$200$300$400

Yukon $0 to $25,000$25,001 or more

$0$140


Income Tax Surprises• Deemed disposition rule at death.

• Money in registered accounts is fully taxable.

• Half of capital gains on assets are taxable.

• No tax consequence if assets are transferred to spouse or spousal trust.

• Final return due April 30 of following year or 6 months after date of death (later of the two).

Canada Revenue Agency $XXXX

Final tax return

Canada Revenue Agency$XXXX

Final tax return

LifeInsurance

Benefit

Final Expenses

Funeral Cost

Preserve your client’s estate value for their loved-ones.

How does simplified issue products fit in your business?

• Need is there.

• Easy to understand.

• Time efficient application process, issued quickly.

• Good way to generate steady cash flow.

Generate more business in less time with Assumption Life

simplified issue products!

www.assumption.ca

http://www.assumption.ca/

SimplifiedSimplified life insurance solution for clients who life insurance solution for clients who want peace of mind andwant peace of mind and NO MEDICAL EXAMNO MEDICAL EXAM

• Permanent life insurance guaranteed level premium

• No medical exam, no APS, no fluids or needles

• Guaranteed cash values and excellent paid up value

• Available for smokers and non-smokers

• Available as a policy or rider (spouse)

• Issued with limited proof of insurability

• Insurance amount doubles in case of accidental death

• In case of accidental death in a public transportation vehicle, beneficiaries receive 5 times the original insurance amount.

• Issue ages• 40 to 8585

• Policy Face Amount• $1,000 to $50,000$50,000

• Guaranteed cash value and guaranteed reduced paid-up Guaranteed cash value and guaranteed reduced paid-up option after 3 years.option after 3 years.

• Living benefit– 50% of the sum insured in the event of a first-time occurrence of a

terminal illness

• Transportation benefit– $2,000 payable when death occurs at a site over 200 km away from

primary residence

• Annual fee– policy $60.00– rider (spouse) $30.00

• Insurance coverage is immediate• On-line application approved in 24-48 hrs

• FYC 45%

Deferred Option• If your client has been declined for insurance within the past

2 years, they may still qualify for Golden Protection at the same rates.

• Two-year waiting period for the death benefit for non-accidental death.

• Accidental death benefit is immediate.

• FYC 35%

DEFERRED

Same great features as Golden ProtectionSame great features as Golden Protection

++

SimplifiedSimplified life insurance that life insurance that allows participants allows participants

to increase their original coverage amount by to increase their original coverage amount by 3%3%

annually –annually – without increasing their without increasing their premiums!premiums!**

**until the initial sum insured doubles or the insured’s attained age 100 on the coverage’s until the initial sum insured doubles or the insured’s attained age 100 on the coverage’s anniversary.anniversary.

• Permanent life insurance for clients aged 40 to 80

• No medical exam, No Needles or Fluids, No APS

• Premiums and coverage that will never change

• Guaranteed cash value and paid up values

• Coverage amount from $1,000 to $30,000

• Same Great Compensation of FYC 45%

• Living benefits– 50% of the sum insured in the event of a first-time occurrence of a

terminal illness

• Transportation benefits– $2,000 payable when death occurs at a site over 200 km away from

primary residence

• Annual fee– policy $60,00– rider (spouse) $30,00

• Guaranteed cash values and guaranteed paid-up insurance

• Insurance coverage is immediate

• On-line application approved in 24-48 hrs

1st anniversary - $10,000

5th anniversary - $10,000



1st anniversary - $10,300




Comparative illustration: Sum insured

Male non smoker, 60 years old. $10,000 face amount.

Monthly: $44.13

Annually: $490.30

Monthly: $58.01

Annually: $644.60

Comparative illustration: Premiums


• If we take the same $58.01 in monthly premiums that the Golden Protection Plus client was paying for his initial $10,000 in coverage, and use it to purchase a Golden Protection policy… this would give the client $13,586 in coverage.

• However, with Golden Protection Plus, after the 12th policy anniversary… the client would end up with more coverage with Golden Protection Plus, since the $10,000 would then be $13,600.

Comparative illustration


Getting started with Assumption Life!

1 - Obtain a broker code: Complete the Broker Registration Form and send to your MGA.

2 - You will receive an e-mail from Assumption Life indicating your username, password as well as your broker code.

lia.assumption.ca

Lia Benefits

Reduces acquisition costs

Speeds up process and commission payment

Increases efficiency for everyone (broker, MGA and carrier)

Is a straight-through process – data enters directly into our administration system

runs on almost any device*

Is leading edge in the industry

*Does not work on Lynux OS. Is not designed for smartphones.

We pay 2 x WEEK

PERSONALIZED MARKETING SUPPORT

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Simplified Issue Products Life Insurance Made Easy