Launch of Participating Life Insurance Dawit Hamilton, BA,CFP,CLU,CHS Regional Sales Director- Individual Insurance Desjardins Insurance Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company.

Agenda Our new product offer Case Study DESJARDINS INSURANCE | FOR ADVISORS ONLY

Why Use Desjardins Insurance? The data presented in this document is from a 2015 Bloomberg study and does not represent Desjardins’ current position. This document is for advisor use only.

In-force business managed by Desjardins Insurance since… 1st participating life insurance product appeared around 1860 State Farm, Protector, Flexivie, PermaPar, PermaPlus, PermaVie, Partenaire, Sauvegarde, FlexPlus, Sauvegarde, Maxi-terme… In-force business managed by Desjardins Insurance since… 1896! It’s NOT anything new Be proud! Imperial Life…1896 Which other companies? DESJARDINS INSURANCE | FOR ADVISORS ONLY

Participating Life Insurance Accelerated Growth 20 pay To 100 Enhanced Insurance (T1 + PUA) 10-year Guarantee Lifetime Guarantee Paid-Up Additions (PUA) Estate Enhancer Dividends on Deposit Premium Offset Cash Payment Annual Premium Reduction DESJARDINS INSURANCE | FOR ADVISORS ONLY

Target markets Emerging mass-affluent, mass-affluent, and high-net-worth clients Business owners DESJARDINS INSURANCE | FOR ADVISORS ONLY

Client profile Have cash or assets they don’t need to maintain their lifestyle Need permanent life insurance Accelerated Growth Mass-affluent and high-net-worth clients aged 45 to 65 Estate Enhancer Emerging-mass- affluent and mass- affluent clients adults 35 to 65 years of age With children or grandchildren aged 0 to 17 DESJARDINS INSURANCE | FOR ADVISORS ONLY

Client profile Accelerated Growth 10 to 15 years Estate Enhancer 20 to 25 years Having access to more cash at the start of their contract for short to medium term needs Increasing their retirement income Diversifying their assets Planning their estate and covering taxes owing upon death Maximizing the value of their estate upon death Compensating for the rising inheritance tax Building a solid financial foundation for their children or grandchildren, and guaranteeing their insurability Having access to cash during their lifetime Planning a charitable donation DESJARDINS INSURANCE | FOR ADVISORS ONLY

Dividend scale Paid-up additions options(PUA) Estate Enhancer Accelerated growth 10-15 years If we compare the dividends’ scale of these 2 products, we can see that our hare/accelerated growth is faster at the start, while the tortoise /estate enhancer is better after a certain period (around 10-15 years) DESJARDINS INSURANCE | FOR ADVISORS ONLY

Death benefit Paid-up additions options (PUAs) Cash surrender value Paid-up additions option (PUAs) 20-25 years 20-25 years If we compare the death benefit and the cash surrender value, we can see that our hare/accelerated growth will increase faster at the start, while the tortoise/estate enhancer has better values after a certain period (around 20-25 years) Estate enhancer Accelerated growth DESJARDINS INSURANCE | FOR ADVISORS ONLY

Dividend options and Premium Offset DESJARDINS INSURANCE | FOR ADVISORS ONLY

01 02 03 04 05 06 Cash Payment Annual Premium Reduction Dividends on Deposit Paid-Up Additions (PUA) 05 06 Enhanced Insurance Premium Offset DESJARDINS INSURANCE | FOR ADVISORS ONLY

Annual dividends paid to policyowner by cheque 01 Cash Payment Annual dividends paid to policyowner by cheque This is the simplest option! DESJARDINS INSURANCE | FOR ADVISORS ONLY

Annual Premium Reduction 02 Annual Premium Reduction Affordable way of paying policy premiums If dividends credited are higher than premiums, Desjardins Insurance pays the difference to policyowner Only available if the premium is paid annually DESJARDINS INSURANCE | FOR ADVISORS ONLY

03 Dividends on Deposit Automatically deposited into a Desjardins Insurance savings account Accessible at all times Daily interest with annual compounding Interest rate of 1.7% DESJARDINS INSURANCE | FOR ADVISORS ONLY

Paid-Up Additions (PUA) 04 Paid-Up Additions (PUA) All dividends credited to the policy used to purchase permanent paid-up insurance No additional premiums for this insurance New paid-up insurance has cash surrender values and generates dividends Death benefit and cash surrender values increase over time The PUA cash surrender values grow on a tax-efficient basis DESJARDINS INSURANCE | FOR ADVISORS ONLY

Paid-up additions Death benefit PUAs Basic amount of insurance Voici un graphique qui illustre l’option de bonification d’assurance libérée. La partie verte représente le montant de base au décès qui est uniforme et garanti. La partie grise représente les bonifications d’assurance libérée qui augmentent dans le temps. La partie grise n’est pas garantie et varie en fonction du barème de participations futur. DESJARDINS ASSURANCES | À L'USAGE EXCLUSIF DES CONSEILLERS

05 Enhanced Insurance Combination of one-year term insurance (T1) and PUAs Guaranteed for 10 years or for life This option provides a higher death benefit as of the time of issue, at a lower cost DESJARDINS INSURANCE | FOR ADVISORS ONLY

Dividend crossover point Enhanced Insurance Death benefit PUAs T1 Basic amount of insurance Dividend crossover point Voici un graphique qui illustre l’option de bonification d’assurance libérée. La partie verte représente le montant de base au décès qui est uniforme et garanti. La partie grise représente l’assurance temporaire d’un an. Avec le temps cette assurance est remplacée par des Bonifications d’assurance libérée (partie jaune-mauve) Le montant au décès total est uniforme jusqu’à ce que le point d’équilibre des participation soit atteint. À ce moment-là, le montant au décès commence à croître. Les parties grise et jaune ne sont pas garanties et varient en fonction du barème de participations futur. ???? Je croyais qu’il y avait une garantie de 10 ans ou à vie???? DANS LE LOGICIEL D’ILLUSTRATION JE CHOISI UN MONTANT D’ASSURANCE SUPPLÉMENTAIRE EX 100 000$ ET J AI UN CAPITAL DE BASE DE 500 000$ S’IL N’Y A PAS DE PARTICIPATIONS DE VERSÉES A L’ANNIVERSAIRE DE MON CONTRAT ET QUE JE DÉCÈDE QU’ELLE MONTANT D’ASSURANCE SERA PAYÉ À MON BÉNÉFICIAIRE? DESJARDINS ASSURANCES | À L'USAGE EXCLUSIF DES CONSEILLERS

06 Premium Offset Allows policyowners to pay premiums with dividends credited annually Can be activated when there are enough annual dividends and non-guaranteed cash surrender values to pay all future premiums Available with all dividend options, except Annual premium reduction DESJARDINS INSURANCE | FOR ADVISORS ONLY

Dividend scale DESJARDINS INSURANCE | FOR ADVISORS ONLY

Expenses and taxes paid by insurer Dividend Scale Expenses and taxes paid by insurer Investment returns Mortality rate

Investment return risk Stable long-term performance DESJARDINS INSURANCE | FOR ADVISORS ONLY

Dividend scale interest rate Desjardins Insurance guarantees an interest rate of until January 1, 2023 5% DESJARDINS INSURANCE | FOR ADVISORS ONLY

Joint Last-to-Die, Paid-up First Death Joint First-to-Die Individual Joint Last-to-Die, Paid-up First Death Joint Last-to-Die DESJARDINS INSURANCE | FOR ADVISORS ONLY

A head start for the future Participating life insurance for children We all want the best for our children or grandchildren. But life happens. Illness, lifestyle choices, even some hobbies, can affect their ability to qualify for life insurance as adults, when they have a family of their own to protect.   Give them a head start and protect their future insurability. DESJARDINS INSURANCE | FOR ADVISORS ONLY 26

Why buy PERMANENT life insurance for a child? Provides a lifetime of protection at children’s rates Having insurance today can protect their future insurability Insuring a child is easy when they are young and healthy Protects a family’s financial security so parents can take leave from work The guaranteed insurability additional coverage is an affordable way to make it possible for your child to purchase insurance in the future Life insurance is a lasting gift that can play an important role in a child’s financial future. Life insurance can create a safety net that provides your child with lifelong benefits … Changes in health, certain jobs or hobbies could make a child uninsurable later in life. without evidence of insurability

Why buy Par Life insurance on a child? Protection and savings in one plan Lifetime coverage Par Life can grow with your child and meet their changing insurance and savings needs Premiums are level and guaranteed The policy can be paid up in 20 years A child will have permanent protection that can provide for his own family’s financial wellbeing and tax-efficient transfer of assets to their heirs. A 20 pay plan provides them with a paid-up insurance at a time when their needs are high but their income may not be. DESJARDINS INSURANCE | FOR ADVISORS ONLY 28

1 2 3 Advantages of PAR life insurance for a child By purchasing a Par Life while the child is young, the policy benefits from greater compound growth over time. A child can use the cash value in the policy to fund their post-secondary education, to purchase a home or anything else they may need through: a cash withdrawal, policy loan or collateral loan. 2 3 Provides a stable investment option with tax-advantaged growth but does not require active management like other investments. DESJARDINS INSURANCE | FOR ADVISORS ONLY 29

Case study 1 Meet Annice, proud grandmother of Anna DESJARDINS INSURANCE | FOR ADVISORS ONLY 30

The situation Annice would like to: Establish a financial foundation for her 12-year-old granddaughter Anna to help her achieve her future goals and dreams Spend $1,500 per year on insurance protection for her granddaughter Anna’s RESP is maximized and she does not have any other insurance She wants a growing guaranteed death benefit DESJARDINS INSURANCE | FOR ADVISORS ONLY 31

The need Provide permanent whole life insurance that would protect Anna now and in the future Create a stable investment option with tax-advantaged growth Access cash value to fund education, for example Transfer the ownership of the policy to her granddaughter without transferring the responsibility for premium payment to her She wants a growing guaranteed death benefit DESJARDINS INSURANCE | FOR ADVISORS ONLY 32

01 02 03 04 Coverage Premium Option Par Account Solution: Participating life insurance 01 Estate Enhancer for long term death benefit and cash values growth Coverage 02 Premium Limited payment – 20 years 03 Option Paid-up additions (PUAs) Coverage : Estate Enhancer for the long term death benefit and cash values growth Premium : Limited payment – 20 years Option : Paid-up additions (PUAs) option because of potential death benefit and cash value growth that is tax-advantaged PAR Account : - Opportunity to earn dividends - Stable long term hands-off investment option 04 Par Account Opportunity to earn dividends Stable long term hands-off investment option DESJARDINS INSURANCE | FOR ADVISORS ONLY 33

Solutions for Anna 20 year pay - Premium $1, 507 Product Initial coverage Annual premium Estate enhancer, PUA option $100,000 $1,507 Estate enhancer, Enhanced Insurance option $131,359 Accelerated growth, PUA option $1,566 Accelerated growth, Enhanced Insurance option N/A GWL 20 year pay $325,278 Estate Enhancer EI Option Basic coverage $67,115 Enhanced coverage DESJARDINS INSURANCE | FOR ADVISORS ONLY 34

Guaranteed cash values Total cash values – PUAs option Estate Enhancer Accelerated Growth GWL 20 Pay Year Age Total cash values Guaranteed cash values 1 13 $96 $258 $0 5 17 $1,148 $2,471 $1,204 10 22 $4,892 $9,414 $4,011 20 32 $23,538 $24,215 $32,072 30 42 $51,449 $50,124 $38,487 40 52 $92,163 $87,366 $56,182 50 62 $158,943 $148,673 $85,815 60 72 $262,399 $244,675 $127,148 Dividends are not guaranteed. Therefore, the death benefit and cash value may vary. DESJARDINS INSURANCE | FOR ADVISORS ONLY 36

Total death benefit – PUAs option Year Age Estate Enhancer Accelerated Growth GWL 20 Pay 1 13 $100,898 $101,273 $325,278 5 17 $106,966 $110,326 10 22 $119,905 $127,296 20 32 $162,65 $166,228 30 42 $216,720 $211,593 40 52 $281,073 $267,292 50 62 $358,586 $336,381 60 72 $453,400 $423,590 Dividends are not guaranteed Therefore, the death benefit and cash value may vary. DESJARDINS INSURANCE | FOR ADVISORS ONLY 37

Estate Enhancer: Comparison between PUAs and Enhanced Insurance (same premium) Year Age PUAs death benefit Enhanced Insurance death benefit PUAs cash values Enhanced Insurance cash values 1 13 $100,898 $131,359 $96 $80 5 17 $106,966 $1,148 $984 10 22 $119,905 $4,892 $4,248 20 32 $162,650 $142,707 $23,538 $20,615 30 42 $216,720 $190,188 $51,449 $45,132 40 52 $281,073 $246,731 $92,163 $80,881 50 62 $358,586 $314,833 $158,943 $139,525 60 72 $453,400 $398,138 $262,399 $230,392 DESJARDINS INSURANCE | FOR ADVISORS ONLY 38

Current dividend scenario Alternate dividend scenario Current and alternate dividend scenarios Estate enhancer – PUAs option Current dividend scenario Alternate dividend scenario Contractual year Age Total death benefit Total cash values 20 32 $16,265 $23,538 $139,890 $19,187 40 52 $281,073 $92,163 $198,675 $63,483 60 72 $453,400 $262,399 $270,780 $153,815 DESJARDINS INSURANCE | FOR ADVISORS ONLY 39

When Anna grows up… When Anna reaches age of 32 and the policy is paid-up, the death benefit is equal to 163% more than the initial amount. If Anna decides to buy a house at age 32, she can access the cash value through a: cash withdrawal policy loan collateral loan DESJARDINS INSURANCE | FOR ADVISORS ONLY 40

When Anna grows up… When Anna turns 32, her dividend will be worth $ 1,005. With a yearly premium of $510, she could buy a $1M T20 to cover her debts. In addition, she could still have a remaining $500. DESJARDINS INSURANCE | FOR ADVISORS ONLY 41

Customizing Anna’s plan There are a variety of additional coverages to help tailor the child’s plan to ensure it continues to meet their needs. These include: Guaranteed Insurability Benefit Accidental Fracture Accidental Dismemberment or Loss of Use Accident DESJARDINS INSURANCE | FOR ADVISORS ONLY 42

Thinking about combining it with a CI? 31 illnesses 20 Pay $50,000 31 illnesses 20 Pay $100,000 28 illnesses Harmony New Generation $520 $892 $446 $744 Estate Enhancer Enhanced Insurance option: $100,000 $1,157 Total premium $1,677 $2,049 $1,603 $1,901 *Estate enhancer enhanced insurance with a total face amount of $100,000 (premium amount $1,157) DESJARDINS INSURANCE | FOR ADVISORS ONLY 43

Sales material and tools Product sheet for clients Advisor’s Guide Quick Reference Which Par for which client? Participating account brochure DESJARDINS INSURANCE | FOR ADVISORS ONLY

For everyone Self-training Webinar Introduction to Participating Life Insurance (Module 1) Learn about participating life insurance, who it’s for and how it works Available since August 17 Participating Life Insurance (Module 2) Understand participating life insurance and find out more about the types and dividend options Discovering the Participating Life Insurance Illustration Webinar September 12, 14, 19 and 21, 2017: 1:30 p.m. to 3:00 p.m. New product – Participating Life Insurance TAKE THE SELF-TRAINING FIRST DESJARDINS INSURANCE | FOR ADVISORS ONLY

With Desjardins Insurance You have choices, we offer solutions! DESJARDINS INSURANCE | FOR ADVISORS ONLY 46

Thank you! Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company.