1 A PARTNER YOU CAN TRUST. How do you cover overhead expenses in case of disability?

2 Agenda Target market Definition of overhead expenses Needs analysis Solutions offered by Excellence Superior Program Acci-Jet Accxel Case studies

3 Target market Votre partenaire de confiance. Target market Definition of overhead expenses Needs analysis Solutions offered by Excellence Case studies

4 Target market > Self-employed workers > Registered > Incorporated > Who must incur expenses in the exercise of their profession > Microentreprises > Limited number of employees

5 Target market > Context > Shareholder/owner must be active > Impact of the insured person on > Company operations > Financial support provided > Company income

6 Target market > Example: a bakery > 1 artisan baker > Some counter clerks > A delivery person > If the artisan baker is disabled > No production > No sales > No income > Insured overhead expenses are payable

7 Target market > Example: a bakery > 1 artisan baker > 2 assistant bakers > Some counter clerks > A delivery person > If the artisan baker becomes disabled > Nearly normal production > No reduction of income > Insured overhead expenses are not payable

8 Target market > Other examples of microentreprises > Professional firms > Financial security advisors > Real estate agents > Graphic designers > Truck drivers

9 Votre partenaire de confiance. Target market Definition of overhead expenses Needs analysis Solutions offered by Excellence Case studies

10 Definition of overhead expenses > A company or a self-employed worker has expenses to produce an income > Fixed and recurring expenses > Financial obligations > Lease > Equipment rental, etc. > Necessary expenses for functioning of office or business

11 Covered overhead expenses > Covers normal office expenses such as: > Rent > Heat, electricity and cleaning > Telephone and Internet > Equipment rental and depreciation > Employee salaries (maximum 3) > Insurance premiums > Accounting services > Advertising fees

12 Definition of covered overhead expenses > Covers normal office expenses such as: > Interest on business loans > Registration fees for professional associations > Other normal fixed and recurring expenses for proper functioning of the office > In proportion to the shares held

13 Rent – at home > Based on number of square feet used > Eligible expenses > $25 per sq. ft. per year > Example: > Occupation of 200 sq. ft. in residence for business > 200 x 25 = 5,000 divided by 12 = $417 per month

14 Rent – outside of home > Lessor > Rent paid > Owner > Business taxes > Property tax > Interest on mortgage

15 Non-eligible overhead expenses > Principal insured’s salary during disability > Disability insurance > Any other person hired to replace the principal insured during disability > Costs for goods, property, equipment, supplies, accessories, merchandise and devices

16 Overhead expenses for automobiles > Automobile must be essential to conduct work > Expenses covered: > Rental or interest and depreciation for a purchase > Insurance > Registration > Driver’s licence

17 Overhead expenses for automobiles > Non-covered expenses: > All fuel (gasoline, diesel, etc.) > All vehicle maintenance > Travel costs > As a percentage of use for professional activities > Tax returns or financial statements

18 Practical advice > Separate contract for > Disability insurance > Overhead expenses > Lessee, payor and beneficiary = Company > Creditor insurance > Lessee, payor and beneficiary = Company

19 Limitations > As with disability insurance, it’s for insureds with the following characteristics: > Employment categories 3A and 4A > With stable employment for at least two years > With a certain degree of expertise > Work up to 75% of time at home > Minimum 60-day waiting period > Work more than 75% of time at home > Minimum 90-day waiting period

20 A partner you can trust. Target market Definition of overhead expenses Needs analysis Solutions offered by Excellence Case studies

21 Needs analysis > Documents necessary for analysis > For a self-employed worker working at home > Income tax return > Personal budget > For a microentreprise > Financial statement > Record of wages

22 Needs analysis – general

23 Needs analysis for farms

24 Needs analysis for truck owners

25 Needs analysis > Available on Pyramide > Available on EXCEL spreadsheet

26 Solutions offered by Excellence Votre partenaire de confiance. Target market Definition of overhead expenses Needs analysis Solutions offered by Excellence Case studies

27 Solutions offered by Excellence > Universal coverage 24/7 > At work > At home > When practicing sports > Non-taxable monthly benefits

28 Solutions offered by Excellence > Superior Program > Accxel > Acci-Jet > Guaranteed issue

29 Superior Program > Eligibility > Between age 18 and 59 > Exercise gainful employment > At least 8 months per year > At least 21 hours per week (1050 hours per year) > Meet selection criteria > Be a Canadian citizen or live in Canada for more than six months and meet certain conditions

30 Acci-Jet > Eligibility > Between age 18 and 59 > Exercise gainful employment > At least 8 months per year > 21 hours per week (735 hours per year) > Meet selection criteria > Be a Canadian citizen or live in Canada for more than six months and meet certain conditions

31 Accxel > Eligibility > Between age 18 and 59 > No criteria for exercising gainful employment > Meet selection criteria > Be a Canadian citizen or live in Canada for more than six months and meet certain conditions

32 Solutions offered by Excellence > Duration of benefits > 24 months > Waiting period > 30 days > 30 days or more

33 Benefits Superior Program Acci-JetAccxel Minimum$500 $300 Maximum$6,000 $3,000

34 Solutions offered by Excellence Type of coverageSuperior Program Acci-JetAccxel In case of illness and accidentyesnoyes In case of accident onlyyes no For muscle and ligament injuriesyes

35 > For the Superior Program and Acci-Jet > Pricing based on risk of insured’s regular occupation > Occupations with a lower risk of disability > Better rates > List of occupations available in sales software > No distinction by employment category for Accxel Employment category

36 > Employment category guarantee > No changes after contract is issued > Limitations and exclusions are applicable for the employment category at time of disability Employment category

37 > Available at all times > Advantages: > Decreases amount of premiums > Criteria: > Work outside of home 50% of time > Minimum 3 years experience with the same company > In charge of 5 employees or 5 years of experience > Income: > $60,000 for 3A to 4A, otherwise $35,000 Upgrade of employment category (Superior Program only)

38 Upgrade of employment category > Not available for: > Drivers > Fishermen > Daycare educators > Farm owners > Forest industry workers

39 Premiums > Two options: > Level premiums until end of contract > Level premiums for successive 5-year periods > Guaranteed renewal > Premiums are not guaranteed > Option to adjust premiums based on experience > Waiver of premiums included > Disability before age 60 > Deductible for income tax (expenses/business)

40 Commissions – Superior Program > Base > First-year commissions are recoverable for 12 months > Accelerated > First-year commissions are recoverable for 24 months 1 st year50% Renewal15% 1 st year100% Renewal2.5%

41 Commissions – Acci-Jet > Basic > First-year commissions are recoverable for 12 months > Accelerated > First-year commissions are recoverable for 24 months 1 st year45% Renewal12.5% 1 st year75% Renewal2.5%

42 Commissions – Accxel > Basic > First-year commissions are recoverable for 12 months 1 st year50% Renewal17%

43 Case studies A partner you can trust. Target market Definition of overhead expenses Needs analysis Solutions offered by Excellence Case studies

44 Case #1 > Registered financial security advisor working alone at home > Needs analysis > Income tax return > Personal budget

45 Case #1: Needs analysis – Business overhead expenses > Registered financial security advisor working alone at home Rent – at home Total area in sq. ft.AllocationMonthly Occupied space at $25/sq. ft.2,00010% $ Rent – outside of home Business condo CostFrequencyAllocationMonthly Rent OR Interest on mortgage A100% - Property and municipal taxes A100% - Business taxes A100% -

46 Case #1: Needs analysis – Business overhead expenses > Registered financial security advisor working at home Overhead expenses CostFrequencyAllocationMonthly Salaries (if less than 3 employees) - Total $50,000 - Owners/associates $50,000 - Eligible -A100% - Electricity (outside of home) - M100% - Telephone - Home/office $52M70% $ Cellphone $75M100% $75.00 Internet $50M70% $35.00 Insurance premiums - Home/office $378A10% $ Professional liability $789A100% $65.75 Maintenance $1,500A10% $12.50 Accounting services $200A100% $16.67 Licence fee $225A100% $18.75 Depreciation of material $500A100% $41.67 Professional association - 100% -

47 Case #1: Needs analysis – Business overhead expenses > Registered financial security advisor working at home Automobile expenses CostFrequencyAllocationMonthly Purchase of vehicles - Depreciation $ - Interest on loans $ Rental of vehicles $750M70% $ Auto insurance $825A70% $48.13 Registration and driver’s licence $273A70% $15.93 TOTAL Rent - at home$ Rent – outside of home- Overhead expenses$ Automobile expenses$ GRAND TOTAL$1, NECESSARY COVERAGE$1,300.00

48 Case #2 > Incorporated financial security advisor who works in his firm outside his home with 2 assistants > Needs analysis > Financial statement > Record of wages

49 Case #2: Needs analysis – Business overhead expenses > Incorporated financial security advisor working outside of home with 2 assistants Rent - at home Total area in sq. ft.AllocationMonthly Occupied space at $25/sq. ft. -0% - Rent - outside of home Business condo CostFrequencyAllocationMonthly Rent OR Interest on mortgage$7,500A100%$ Property and municipal taxes$5,500 A100%$ Business taxes$500 A100%$41.67

50 Case #2: Needs analysis – Business overhead expenses > Incorporated financial security advisor working outside of home with 2 assistants Overhead expenses CostFrequencyAllocationMonthly Salaries (3 employees or less) - Total $140,000 - Owners/associates $65,000 - Eligible $75,000A100% $6, Electricity (outside of home) $225 M100% $ Telephone - Home/office $125M100% $ Cellphone $100M100% $ Internet $75M100% $75.00 Insurance premiums - Home/office $759A100% $ Professional liability $789A100% $65.75 Maintenance $125M100% $ Accounting services $3,000A100% $ Licence fee $225A100% $18.75 Depreciation of material $2,000A100% $ Professional association $250A100% $20.83

51 Case #2: Needs analysis – Business overhead expenses > Incorporated financial security advisor working outside of home with 2 assistants Automobile expenses CostFrequencyAllocationMonthly Purchase of vehicles - Depreciation $10,000A70% $ Interest on loans $3,000A70% $ Rental of vehicles -M70% - Auto insurance $825A70% $48.13 Registration and driver’s licence $273A70% $15.93 TOTAL Rent - at home- Rent – outside of home$1, Overhead expenses$7, Automobile expenses$ GRAND TOTAL$9, NECESSARY COVERAGE PER ASSOCIATE$9,400.00

52 Case #3 > Unincorporated trucker working alone > Needs analysis > Income tax return > Personal budget

53 Case #3: Needs analysis – Business overhead expenses > Unincorporated trucker working alone Rent - at home Total area in sq. ft.AllocationMonthly Occupied space at $25/sq. ft. -0% - Rent - outside of home Garage CostFrequencyAllocationMonthly Rent OR Interest on mortgage $1,200 A10% $ Property and municipal taxes $3,500 A10% $29.17 Business taxes - A100% -

54 Case #3: Needs analysis – Business overhead expenses > Unincorporated trucker working alone Overhead expenses CostFrequencyAllocationMonthly Salaries (3 employees or less) - Total $75,000 - Owners/associates $75,000 - Eligible -A100% - Electricity (outside of home) $225 M10% $22.50 Telephone - Home/office $25M100% $ Cellphone $100M100% $ Internet -M100% - Insurance premiums - Home/office $759A10% $633 - Professional liability $756A100% $63.00 Maintenance -M100% - Accounting services $250A100% $20.83 Licence fee $375A100% $31.25 Depreciation of material -A100% - Professional association $250A100% $20.83

55 Case #3: Needs analysis – Business overhead expenses > Unincorporated trucker working alone Automobile expenses CostFrequencyAllocationMonthly Purchase of vehicles - Depreciation $17,500A100% $1, Interest on loans $10,500A100% $ Rental of vehicles -M100% - Auto insurance $825A100% $68.75 Registration $273A100% $22.75 TOTAL Rent - at home- Rent – outside of home$ Overhead expenses$ Automobile expenses$2, GRAND TOTAL$2, NECESSARY COVERAGE PER ASSOCIATE$2,800.00

56 Case #4 > Microentreprise > 3 partners (1/3, 1/3 and 1/3) > 4 employees > Needs analysis > Financial statements

57 Case #4: Needs analysis – Business overhead expenses > Microentreprise with 3 partners and 4 employees Rent - at home Total area in sq. ft.AllocationMonthly Occupied space at $25/sq. ft. -0% - Rent - outside of home Office CostFrequencyAllocationMonthly Rent OR$2,500 M100% $2, Interest on mortgage - A10% - Property and municipal taxes - A10% - Business taxes - A100% -

58 Case #4: Needs analysis – Business overhead expenses > Microentreprise with 3 partners and 4 employees Overhead expenses CostFrequencyAllocationMonthly Salaries (3 employees or less) - Total - Owners/partners - Eligible -A100% - Electricity (outside of home) $375 M100% $ Telephone - Home/office $225M100% $ Cellphone $300M100% $ Internet $275M100% $ Insurance premiums - Home/office $250A100% $ Professional liability $4,000A100% $ Maintenance $250M100% $ Accounting services $6,000A100% $ Licence fee -A100% - Depreciation of material $5,000A100% $ Professional association $2,500A100% $208.33

59 Case #4: Needs analysis – Business overhead expenses > Microentreprise with 3 partners and 4 employees Automobile expenses CostFrequencyAllocationMonthly Purchase of vehicles - Depreciation -A100% - - Interest on loans -A100% - Rental of vehicles $3,000M70% $2, Auto insurance $2,450A70% $ Registration $819A70% $47.78 TOTAL Rent - at home- Rent – outside of home$2, Overhead expenses$2, Automobile expenses$2, GRAND TOTAL$7, NECESSARY COVERAGE PER ASSOCIATE2 500,00

60 Questions?