David Wm. Brown CLU, ChFC, CFP, RHU Tuesday June 21 nd 2005 CIFPs Annual National Conference Niagara Falls, Ontario.

Slides:



Advertisements
Similar presentations
FOR AGENT USE ONLY National Insurance Agency Critical Illness FOR AGENT USE ONLY Policy Form CI-005. Product availability, rates and features may vary.
Advertisements

Critical Illness Presentation Pack Within this pack you will find a number of slides that you can select from to build your own CI presentation that suits.
A PARTNER YOU CAN TRUST. Does it really matter which mortgage insurance you choose ? HOME PROTECTION PLAN.
I Don’t Qualify for Long- Term Care Insurance. Now What?
Easy Term Agent Use Only: Not for public distribution.
THE RIGHT PRODUCT FOR TODAY’S NEEDS! THE RIGHT PRODUCT FOR THE FUTURE! CRITICAL ILLNESS INSURANCE.
In New Zealand Trauma cover provides a lump sum payment in event you are diagnosed with a critical illness. Imagine…….. You might haveYou need to Mortgage.
Home Protector Agent Use Only: Not for public distribution.
Wealthsurance TM Foundation plan UIN:135L001V01. What is the Wealthsurance Foundation Plan? Wealthsurance Foundation plan is hereafter referred to as.
Assurity Life Insurance Company Assurity Life Insurance Company presents Critical Illness Insurance Policy Form Nos. I H0810 or CI 005, and I H0820 or.
Critical Illness Insurance The coverage that pays you for living AFN39346_0206 Critical Illness insurance is underwritten by Mutual of Omaha Insurance.
Long Term Care Insurance Taxation Health Insurance Portability and Accountability Act of 1996 Presented By: Timothy Kelly Individual Commercial Brokerage,
1 Section 79 Plans with SecurePlus Advantage 79 TAX-ADVANTAGED LIFE INSURANCE FOR BUSINESS OWNERS AND EMPLOYEES TC42529(0808) This information is not intended.
Wealth creation and management Wealth protection Retirement Financial Security at Death Liquidity Living Benefits About Crossgrove & Company Since 1985.
Prepared by: PENMORE FINANCIAL GROUP INC Keele St, Concord On L4K 4G7  Fax 
Critical Illness Insurance The coverage that pays you for living AFN30148_0903 Critical Illness policy/certificate CI/CI1/CCI/CCI1 (in ID, CI-20145/CI ;
The Marketplace for Critical Illness Coverage August 2004 Presented by : Jerry Jacobs, CLU 5416 Yale Street Metairie, Louisiana Ph#(504)
Attitude The Shoe Salesman. Expectations What is Critical Illness Insurance? It Pays a Lump Sum Benefit on the Diagnosis of a Covered Condition.
Group Insurance: Life and Disability Benefits. A. Characteristics of Group Insurance u Definition: an arrangement under which employer makes benefits.
Life Insurance for Life The Power of Living Benefits.
From - 09/08/2015 Critical Illness Insurance Sell Less in Order to Sell More.
UNUM - Accident Insurance Accident Insurance Lump Sum Benefit Benefit amount is based on type of injury or incident Money can be used for anything Helps.
LifeMarketers Presents The ABC ’ s of Disability.
For Agent Use Only – Not for public distribution LOYAL THE PRODUCT DESIGNED TO HELP PROTECT YOUR CLIENT’S FUTURE!
20-1 General Nature of Disability Income Insurance 1.Provides periodic payments to person insured when he or she is unable to work because of injury or.
Popularity Meter 17,77,352 policies sold in in the very 2 nd year after introduction.
Are You Totally Protected?. Who is USA Benefits Group? About the Company  USA Benefits Group is a nationwide network of health and life insurance professionals.
Critical Illness Insurance discussion with the ABC Co. (template)
Risk of Needing Care   40% of Americans receiving long-term care are working-age adults. (Where does the Population Live and Who Cares for Them? LTC:
22 - 1Copyright 2008, The National Underwriter Company Standard Provisions of Individual Disability Income Insurance  What is it?  Policy that provides.
INSURANCE Personal Finance. Insurance Protects individuals against unexpected financial loss.  Many types of insurance, each with a specific purpose.
Health Care By Itself Does Not Afford The Protection Needed To Properly Insure Your Family Every 2 Seconds Someone Has A Accidental Injury Every 23 Seconds.
USABG MORTGAGE SCRIPTS. Mortgage Protection Scripts Hi this is ________ with ____________mortgage protection services here in ___________ We were calling.
Resolution Insurance Brokers Employee Benefits. Resolution Insurance Brokers Georgia established April Regulated by National Bank of Georgia. Registered.
Mutual of Omaha Insurance Company Critical Illness Insurance The coverage that pays you for living AFN39346_0311.
Disability insurance – Could you afford not to have it?
Group Critical Illness - A Business Development Perspective IP – 18 Group Living Benefits CIA Meeting Nov 13 – 14, 2008 Tim Griffin, FCIA, FSA AVP Product.
© Family Economics & Financial Education – Updated May 2012 – Types of Insurance – Slide 1 Funded by a grant from Take Charge America, Inc. to the Norton.
2009 Annual Meeting ● Assemblée annuelle 2009 Halifax, Nova Scotia ● Halifax (Nouvelle-Écosse) 2009 Annual Meeting ● Assemblée annuelle 2009 Halifax, Nova.
WELCOME TO YOUR 2014 OPEN ENROLLMENT!. The following benefits are offered… Supplemental Benefits Provided by o Short Term Disability o Accident o Cancer.
Are You Totally Protected?. Over the last 20 years there has been a trend in the health insurance industry  Premiums have been increasing  Deductibles.
The following Supplemental benefits are offered to through Colonial Life… o Hospital Confinement o Accident o Cancer o Critical Illness Important! Complete.
21 - 1Copyright 2008, The National Underwriter Company Taxation of Individual Health Insurance Coverage  What is it?  Individual health insurance  Provides.
For Agent/Broker Dealer Information Only. Do Not Use with Consumers. Now is the Time For Critical Illness Insurance sm Presented by Dana Davis and Mary.
The Marketplace for Critical Illness Coverage Presented by : Jerry Jacobs, CLU 5416 Yale Street Metairie, Louisiana Ph#(504) Fax#(504)
University of New Brunswick October 27, Agenda 1. SSQ Insurance Company Inc. – Overview 2. Accidental Death & Dismemberment Re-issue September 2014.
Life Insurance with Living Benefits Products issued by National Life Insurance Company | Life Insurance of the Southwest National Life Group is a trade.
Critical Illness Insurance at Work AFN What You’ll Learn Why you need Critical Illness protection What Critical Illness protection can do for you.
Condition… Critical Critical. “It only happens to others, it won’t happen to me.”
Supplemental Individual Disability Insurance Plan Help protect more of what you earn.
Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company. Disability insurance Could you afford not to have it?
Your TM TM Trademarks owned by Desjardins Financial Security Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company.
Critical Protection for you and your Retirement. Managing the retirement risk zone  Retirement risk zone  5-10 year period before and after retirement.
Chapter 15 (not 15.8) Selected Chapter questions: 1,5,6 1.
Health Insurance Chapter 9. Importance Of Health Insurance In 2007, 60% if all personal bankruptcies were due to medial costs.
Machinist Custom Choices Program Federal Employee Sector
Disability insurance – Could you afford not to have it?
Life Insurance: The Basics
Life Insurance: The Basics
Life Insurance: The Basics
Are Your Loans & Lifestyle Totally Protected?
Life & Health Insurance Chapter 12
Are You Totally Protected?.
Keep business running with critical illness insurance
Keep business running with critical illness insurance
Life Insurance: The Basics
Trauma Cover Personal.
Exciting New Voluntary Benefits Through Allstate
Presentation transcript:

David Wm. Brown CLU, ChFC, CFP, RHU Tuesday June 21 nd 2005 CIFPs Annual National Conference Niagara Falls, Ontario

1. Introduction 1. Disclosure, qualifications, guarantees 2. The Case for Income Replacement/Critical Illness insurance 1. Personal demonstration 2. Statistics 3. Definitions 1. Income Replacement Insurance 2. Critical Illness Insurance 4. The Comparison 1. Income Replacement/Critical Illness 5. Critical Illness Insurance in Canada 1. Current status 2. Challenges AGENDA

6. Critical Illness Taxation Issues 1. C.R.A 2. C.A.L.U 7. Structuring the C.I. Policy 8. Prospecting 1. Your doctors 2. Your clients – individual/group 3. Yourself 9. Questions? AGENDA- Cont’d

SURVEY

STROKE

HEART DISEASE

HEART ATTACK

CANCER

Disabled as a result of an Accident or of a Sickness ?

38% of Women 41% of Men Will Develop Cancer In their Lifetime. CANCER

Cancer 1 in 3 Canadians will contract some form of life- threatening cancer 125,000 newly diagnosed cases per year Heart Attack 1 in 4 Canadians will contract heart disease 75,000 suffer heart attacks each year - 1 in 2 < 65 Stroke 1 in 20 Canadians run the risk of stroke before the age of 65 50,000 suffer a stroke each year - 1 in 3< 65 Accounts for almost 1% of the total Canadian population

Income Replacement or Disability Income Insurance is designed to replace a portion of an individuals income; in the event that the individual as a result of an accident or sickness cannot work in his/her/any/own occupation Income Replacement Insurance

1. Elimination period 2. Monthly Indemnity 3. Benefit period 4. Definition of total disability 5. Definitions of partial/residual disability 6. Options; F.I.O; C.O.L.A Disability Insurance Variables

Critical Illness Insurance The Critical Illness plan provides a lump sum tax-free benefit to be paid in the event that an individual contracts a critical illness. The Critical Illness policy is designed to provide the necessary financial assistance to permit the insured and his/her family to cope with a critical illness.

Critical Illness Insurance Covered Illnesses Alzheimer’s Disease Aortic Surgery Blindness Benign Brain Tumor Cancer Coma Coronary Angioplasty Coronary Artery Bypass Surgery Cystic Fibrosis Diabetes Deafness Kidney Failure Heart Attack Heart Valve Replacement Loss of Independent Existence Loss of Limbs Loss of Speech Major Organ Transplant Motor Neuron Disease Multiple Sclerosis Occupational HIV Infection Paralysis Parkinson’s Disease Rheumatoid Arthritis Severe Burns Stroke

Critical Illness Insurance Plan Provisions Lump Sum Non-Taxable Benefit Payout 30 Days After Diagnosis Guaranteed Renewable to Age 65 Limited Qualified Right to Change Premiums Guaranteed Issue (no medical requirements) Optional Individual Increase Offered (with medical requirements) Group - 15% Discount Return of Premium on Death Portable Coverage Pre-Existing Condition Exclusion 24 months Recharge Provision - 5 Years

Extraordinary Costs of a Critical Illness Medical Costs $ Alternative treatment $ Experimental drugs $ Out of province treatment $ Nursing care Reduce Financial Obligations $ Debt/mortgage repayment Non-Medical Costs $ Leave of absence for insured or spouse $ Home and/or vehicle adaptation $ Childcare $ Work style changes

Critical Illness Insurance Benefits 4 Effectively cover the most catastrophic events 4 Provide stable, predictable costs 4 Give a significant lump sum payout 4 Provide access to world renowned medical services 4 Fill the growing gap due to increased morbidity 4 Address real needs 4 Covers real risks

Critical Illness Insurance Assistance Services Expert Medical Evaluation by World-Class Physicians FindBestDoc Customized Search for Best Doctors Including Specialized Canadian Physicians FindBestCare Comprehensive Services and Access to Treatment Centers Throughout the United States Ceridian/The Healing Journey 24 Hour Access to Daily Living Assistance Professionals Membership in a Self-Help Healing Program BEST DOCTORS/CERIDIAN/HEALING JOURNEY InterConsultation

Income Replacement InsuranceCritical Illnesses Insurance Triggering Event Sickness or AccidentCritical Illness 27+ Diseases Definitions Inability to work Own occupation Any occupation Residual Partial Diagnoses of Critical Illness survival for 30 days(90 days in the case of Cancer following issue of contract) Premiums Guaranteed/Non Guaranteed Return Of Premium on Death Not usually applicable - 3 month survivorship benefit Usually included Return of Premium on expiry Not usually applicable (May be available as a rider) Can be included as rider “EITHER” OR

Income Replacement InsuranceCritical Illnesses Insurance Other Options Future income option Cost of living benefits Early Intervention Benefits Medical Assistance Benefits Contract Terms To age 65 with possible extensionCan be designated to continue for life Underwriting Based on medical history and family history Benefit Payment Paid out monthlyLump sum Adjudication OngoingOne time Maximum Payment In relation to income replacement tables$2,000,000 Taxability If paid in after tax dollars benefit is tax freeConsidered tax free - No ruling yet - Eligibility Needs income to qualifyNo income requirement

“Canadian Critical Illness sales are paltry by comparison to other countries in the English speaking universe” Advisor.ca May 17, 2005

C.I. SALES STATS AND ANALYSYS 2004 In 2004 sales increased by 11% More limited guarantees introduced Average size of policy dropped by 2% Permanent products increased over renewable products Return of premium at expiry benefit reduced by 6% Only 3% of new policies sold were for “Basic” coverage of five or fewer conditions Source: Limra CI Sales 2004

“If you don’t sell CI, have a huge financial indemnity policy because your client will sue you” Bhupinder Anand Anand Associates London, England

1. No standardized definitions 2. Concern over high premiums 3. Advisors not aggressive enough 4. Tough underwriting concerns REASONS

DON’T TRY TO BE A DOCTOR !

CRITICAL ILLNESS UNDERWRITING Family History Smoking Height-Weight Ratio Elevated Cholesterol Medical Impairments that affect more than one body system or organ Seemingly Insignificant Condition

“The Canadian Life and Health Insurance Association and The Conference of Advanced Life Underwriting Discussion Paper” March 2004 See Website: TAXATION

IS C.I. With/or Without Refund of Premium Question Accident or Sickness Insurance OR Life Insurance ON DEATH ON EXPIRY

Critical Illness Insurance Taxation CRA has not yet clarified the Agency’s interpretation of the provisions of the Act with reference to the taxation of Critical Illness Contracts (especially with refund benefits) The Conference of Advanced Life Underwriters is continuing to work with the Department of Finance to ensure an appropriate framework for taxation of Living Benefits

TAXATION Canada Revenue Agency Technical Interpretation Letter ( , December 9,2003) -Grouped C.I. Non taxable benefits and deductible premium – ~ Assumption no return or premiums

Understanding The Taxation Of Critical Illness Insurance PurposeStructureTax Treatment Provides cash benefit for 1. Medical expenses 2. Pay down mortgage 3. Renovate home 4. Replace caregiver income Insured owner beneficiary and payor Premium non deductible living expense Benefit non taxable Return of premium on death and at expiry non taxable Personally – Owing Policy CRA has confirmed that it views Critical Illness Insurance Policies without ROP benefits as accident and sickness Insurance.

Understanding The Taxation Of Critical Illness Insurance PurposeStructureTax Treatment Provide cash benefit to corporation for 1. Immediate cash needs (key employee) 2. Repay business debts 3. Fund buy - sell Insured: employee or shareholder. Owner, payor and beneficiary is corporation Premium non deductible to corporation Benefits non taxable to corporation Return of premium on death or at expiry may be non taxable Corporate Protection

Understanding The Taxation Of Critical Illness Insurance PurposeStructureTax Treatment Provides cash to the employee for 1. Medical expenses 2. Pay down mortgage 3. Renovate home 4. Replace caregiver income The Employee is the insured. Owner is employee or corporation. Payor is corporation. Benefits payable to employee or corporation (Employee not as shareholder) 1. If employee owned and corporate paid. Premium included in employee’s income, deductible to employer, benefit non taxable to employee 2. If corporate owned and corporate paid. Premium not included in employees income deductible to corporation as business expense. Cash benefit not taxable to corporation if paid to employee taxable in income Individual Policy as an Employee Benefit

Understanding The Taxation Of Critical Illness Insurance PurposeStructureTax Treatment Provides cash to an employee for 1. Medical costs 2. Pay down mortgage 3. Renovate home 4. Replace caregiver income The employee is the insured. Owner and payor is corporation. Benefits payable to corporation or owner. (Employee not as Shareholder) If corporation pays on a number of corporate owned policies, premiums not included in employees income. Premiums are a deductible expense to corporation. Cash benefit paid to employee non - taxable to employee (Health and Welfare Trust) Grouped Individual policies providing Employee benefit

Standard Group Benefit Coverages Life Insurance Accidental Death and Dismemberment Dependant Life Extended Health Care Dental Care Short Term Disability Long Term Disability

WHAT’S MISSING?

Critical Illness Insurance, A Living Benefit Without Critical Illness Insurance, will your employees be forced to… Ü Deplete their RRSP’s? Ü Increase their debt load? Ü Rely on relatives? Ü Pass the hat around the office? Ü Forgo access to timely medical treatment?

Perspective 3 Critical Illness helps refocus benefits back to providing for the most catastrophic events 3 Provides the opportunity to create a more “caring parent” environment and reduces the need to “pass the hat” around the office to help an employee dealing with a critical illness 3 Average person starting out in the workforce has a: 2.1% chance of dying prior to age % chance of having a critical illness diagnosis prior to age 65 It is not a question of “if”, but rather “when”

Keeping Things in Perspective How Significant are the Following Events Your Clients Car is Stolen Your Clients TV is Stolen Your Clients Computer is Stolen You Client is Diagnosed with Cancer Your Client Dies Rank the Significance of the Event on your clients family from 1 to 4, 4 being the greatest

What Does Your Client Currently Have Insured? Your Clients car Your Clients TV Your Clients Computer Your Clients Life The Diagnosis of Clients Critical Illness

How many of you have either a personal income replacement policy or Critical Illness Policy Please Stand Up

Anyone who has applied for or has a Critical Illness Contract PLEASE SIT DOWN!

Critical Illness Insurance Sample Costs for $100,000 Benefit Female Age 55 $ monthly Female Age 50 $ monthly Female Age 45 $ monthly Female Age 40 $ monthly Female Age 35 $79.19 monthly Female Age 30 $63.89 monthly Calculations based on female non-smoker status, 12 months of non tobacco use

CRITICAL ILLNESS RECOVERY PLAN Return of Premium on Death Included Male Age 42 Non-Smoker $100,000 A 10 Year Renewable to age 75 B Level to Age 75 C Level for Life *(Optional Return of Premium) $683.88$1, $ $1, $1, $ $1, Age 52 $1, Age 62$3, Age 72$8,004.96

CRITICAL ILLNESS RECOVERY PLAN Return of Premium on Death Included Female Age 42 Non-Smoker $100,000 A 10 Year Renewable to age 75 B Level to Age 75 C Level for Life *(Optional Return of Premium) $651.96$1, $ $1, $1, $ $1, Age 52 $1, Age 62$2, Age 72$5,797.88

IT’S ALL ABOUT…….

CHOICE!

Thank You! Al G. Brown & Associates Over 60 years of dedicated service