The BMO Insurance Whole Life Plan Paul Morra An advisor perspective PN0098E 2018/01/25

Default Product Selection Tendency to default to usual recommendation One size does NOT fit all Habits Tendency to default to usual recommendation Could be comfort with a carrier’s application or illustration software Could be a good/bad underwriting experience Are decisions only based on “big picture” (example: Term vs Permanent need) Advisors mainly act out of habits. Are we really doing optimum evaluation?

All policies have the same ingredients … Premium Total Death Benefit Policy Pie Duration Total Cash Value Guaranteed Cash Value Face Amount ... What’s most important depends on each client’s goals!

All policies have the same ingredients … Total Death Benefit Premium Total Cash Value Guaranteed Cash Value Policy Pie Duration Face Amount ... What’s most important depends on each client’s goals!

All policies have the same ingredients … Total Death Benefit Total Cash Value Premium Policy Pie Guaranteed Cash Value Duration Face Amount ... What’s most important depends on each client’s goals!

Rate your clients’ priorities All policies have the same ingredients! Know your client(s) This is your first step in selecting the right product(s) for your client(s)! Rate your clients’ priorities

Case Study: Male 40 Non-Smoker, 10-Pay By year 20, BMO WLP has a higher GTD CSV over the competition

Male 40 Non-Smoker, 10-Pay, Standard Class BMO Insurance Whole Life Plan Par Plan #1 #2 Non-Par Pay Period 10-Pay 20-Pay with premium offset at years 11-20 15-Pay with premium offset at years 11-15 Premium $50,000 annually Total Deposit over 10 years: $500,000 Face Solve 1,170,886 957,734 885,767 971,044 Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold 22% more Coverage 32% more Coverage 21% more Coverage BMO Insurance Advantage: Source: Based on illustration software values as of January 29, 2018

Guaranteed Cash Values Year 5 Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

Guaranteed Cash Values Year 10 Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

Guaranteed Cash Values Year 20 Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

Guaranteed Cash Values Year 30 Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

Guaranteed Cash Values Year 40 Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

BMO Insurance Whole Life Plan Total Cash Values Year 5 Current Scenario – 1% Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

BMO Insurance Whole Life Plan Total Cash Values Year 10 Current Scenario – 1% Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

BMO Insurance Whole Life Plan Total Cash Values Year 20 Current Scenario – 1% Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

BMO Insurance Whole Life Plan Total Cash Values Year 30 Current Scenario – 1% Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

BMO Insurance Whole Life Plan Total Cash Values Year 40 Current Scenario – 1% Par Plan #1 … Canada Life Par Plan #2 … Sun Life Non-Par Plan … Manulife BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

BMO Insurance Whole Life Plan Total Death Benefit Year 5 Current Scenario – 1% Par Plan #1 … Canada Life Par Plan #2 … Sun Life Non-Par Plan … Manulife BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

BMO Insurance Whole Life Plan Total Death Benefit Year 10 Current Scenario – 1% Par Plan #1 … Canada Life Par Plan #2 … Sun Life Non-Par Plan … Manulife BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

BMO Insurance Whole Life Plan Total Death Benefit Year 20 Current Scenario – 1% Par Plan #1 … Canada Life Par Plan #2 … Sun Life Non-Par Plan … Manulife BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

BMO Insurance Whole Life Plan Total Death Benefit Year 30 Current Scenario – 1% Par Plan #1 … Canada Life Par Plan #2 … Sun Life Non-Par Plan … Manulife BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

BMO Insurance Whole Life Plan Total Death Benefit Year 40 Current Scenario – 1% Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

Internal Rate of Return (IRR) on Death Benefit Year 5 Current Scenario – 1% Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

BMO Insurance Whole Life Plan IRR on Death Benefit Year 10 Current Scenario – 1% Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

BMO Insurance Whole Life Plan IRR on Death Benefit Year 20 Current Scenario – 1% Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold By year 20 … BMO WLP has higher Total Cash Values. Trade off … in early years total csv is lower which can be a problem for some clients who are considering an IFS. In that case, look at additional collateral requirements vs the impact on the overall estate BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

BMO Insurance Whole Life Plan IRR on Death Benefit Year 30 Current Scenario – 1% Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

BMO Insurance Whole Life Plan IRR on Death Benefit Year 40 Current Scenario – 1% Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018

BMO Insurance Whole Life Plan comes out ahead from years 20 plus! Summary For every metric used ... Guaranteed Cash Values Total Cash Values Total Death Benefit IRR on Death Benefit BMO WLP advantage even more pronounced on rated cases Similar results in all areas for Joint Last to Die plans BMO Insurance Whole Life Plan comes out ahead from years 20 plus!

Take advantage of our age rating method for rated cases Male 50 Non-Smoker, 200% Rating BMO Insurance Whole Life Plan Par Plan #1 #2 Non-Par Pay Period 10-Pay 20-Pay with premium offset at years 11-20 15-Pay with premium offset at years 11-15 Premium $50,000 annually Total Deposit over 10 years: $500,000 Rating Age 57 150% 200% Face Solve 1,170,886 957,734 885,767 971,044 Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold 11% more Coverage 9% more Coverage 19% more Coverage BMO Insurance Advantage: Source: Based on illustration software values as of January 29, 2018

Male 50 Non-Smoker: 200% Rating Year 20 Current Scenario – 1% BMO Insurance Advantage11% BMO Insurance Advantage6% BMO Insurance Advantage36% BMO Insurance Advantage8% Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Total Cash Value Total Death Benefit Source: Based on illustration software values as of January 29, 2018

Male 50 Non-Smoker: 200% Rating Year 40 Current Scenario – 1% BMO Insurance Advantage15% BMO Insurance Advantage12% BMO Insurance Advantage32% BMO Insurance Advantage41% Using only 2 metrices … Total CSV and Total DB … BMO is clearly ahead. BMO PP#1 PP#2 NPP Year 40 WLP CAN SUN MANU Total CSV 1,650,744 1,166,371 1,424,966 867,265 Total DB 1,763,159 1,334,696 1,563,801 1,272,921 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Total Cash Value Total Death Benefit Source: Based on illustration software values as of January 29, 2018

Performance Bonus vs Dividend Rate Same pattern repeating … By year 20 … BMO WLP has higher Total Death Benefit. Bottom line … BMO WLP is less sensitive to drops in crediting rate.

“Par” Dividend Very important to explain Often challenging for clients to understand Terminology (dividend interest rate, lapse assumptions, mortality gains, etc …) Methodology

Typical “Par Dividend” Calculation This is from Sun Life. Similar with other Par carriers. - Rarely a good conversation to have

Performance Bonus Simple to explain! Simple to understand! “Performance Bonus” Calculation Simple to explain! Performance Bonus Guaranteed Cash Value Performance Bonus Rate Simple to understand! BMO’s Explanation. - Simple to explain. Simple to Understand.

Performance Bonus Rate Guaranteed never to be negative Based on the Smoothed market performance Declared Annually Guaranteed to be at least 5.50% until April 30, 2020 You can run our illustration and tell the client exactly what his bonus will be (at the very minimum) to 2020 - Cannot do this with Par Plans

Other features That might help you determine product choice. Keep it simple … no need for multiple policies to get extra benefits

BMO Insurance Par Plan #2 Par Plan #1 Non-Par Plan Additional Riders on Joint Last Plans BMO Insurance Term Riders CI Riders Keeping it simple … no need for multiple policies to get extra benefits! Par Plan #2 Term Riders CI Riders Par Plan #1 Term Riders CI Riders Non-Par Plan Term Riders CI Riders Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold

First Year Commission (FYC) Male 40 Non-Smoker, $1,000,000 Coverage BMO Insurance Whole Life Plan Par Plan #1 #2 Non-Par Coverage $1,000,000 Pay Period 10-Pay 20-Pay with premium offset at years 11-20 15-Pay with premium offset at years 11-15 Deposit $42,710 $51,665 (includes Max ADO for 10 years) $56,035 FYC $52,960 $43,946 $60,798 $48,165 Par Plan #1 … Canada Life Estate Achiever Par Plan #2 … Sun Life Par Protector Non-Par Plan … Manulife Performax Gold 124% of Deposit 85% of Deposit 109% of Deposit 94% of Deposit Source: Based on illustration software values as of January 29, 2018

The BMO Insurance Whole Life Plan Simple. Flexible. Guaranteed.

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Information Disclaimer The information in this publication is intended as a summary of our products and/or services and may include projected values based on a set of assumptions. Actual results may not be guaranteed and may vary. Please consult the appropriate policy contract for details on the terms, conditions, benefits, guarantees, exclusions and limitations. The actual policy issued governs. Each policyholder’s financial circumstances are unique and they must obtain and rely upon independent tax, accounting, legal and other advice concerning the structure of their insurance, as they deem appropriate for their particular circumstances. BMO Life Assurance Company does not provide any such advice to the policyholder or to the insurance advisor. TM/® Registered trade-mark of Bank of Montreal, used under licence. Insurer: BMO Life Assurance Company.