Desjardins Insurance refers to Desjardins Financial Security Life Assurance Company. Wealth Accumulation using Universal Life

2/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY Why Do It? Tax efficiency (deferral and potential TAX-FREE growth) Wealth accumulation Future tax free income – leveraging Inter-generational wealth transfer

3/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY For clients seeking to: Build Tax Sheltered Savings Make use of Leveraging in the future Pass on estate to heirs

4/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY Coverage Type When looking at over-funding a PACE plan, there are certain coverage types that make sense These are….

5/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY FLEX 1 Great cash accumulation Level COI option Competitive YRT Investor Bonus AHC

6/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY Cost of Insurance (COI) YRT - guaranteed, increases annually Level cost as of the 4th policy year

7/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY FLEX 1 at 85/20 years Great cash accumulation P/U COI option Competitive YRT Investor Bonus AHC

8/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY Cost of Insurance (COI) YRT - guaranteed, increases annually COI paid up at age 85 or minimum 20 years Level cost as of the 4th policy year

9/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY ACCUMULATOR Coverage reduces to 5O% of initial amount from (5%/yr.) Long term accumulation opportunity Guaranteed COI Investor Bonus

10/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY Cost of Insurance (COI) Hybrid - Level for 3 years YRT to age 65 Level thereafter  Amount of insurance decreases 5% per year starting at age 75

11/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY High Premium Market Sales Tool Savings Maximizer

12/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY Savings Maximizer A concept tool that will allow you and your clients to stipulate the desired premium deposit and calculate the minimum sum insured. As soon as the exempt status of the contract allows it, the sum insured will then start to decrease as low as $25,000. Result = Maximization of Accumulated Fund

13/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY Key Aspects of Universal Life TAX FREEIf the intention is to retain an investment until it passes down to the next generation, a U/L plan can provide a TAX FREE death benefit TAX DEFERREDIf investment is to provide retirement income, this can be provided with a U/L plan i.e. TAX DEFERRED

14/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY How Does It Work? CRA has established a “benchmark” amount (MTAR line) which all U/L contracts must fall under to stay exempt from taxation This allows the U/L policyholder to place additional deposits into their plan on a tax deferred basis For example, the COI may be $1,000 with a maximum deposit level of $8,000

15/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY How Does It… cont’d Each policy is tested at issue and at every policy anniversary It compares the policies “accumulating fund” with the accumulating policy of an ETP (exempt test policy) –the ETP is a 20-pay endowment at 85 –that ETP value becomes the MTAR (maximum tax actuarial reserve)

16/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY The 250% Rule Also known as the “anti-dump-in” rule The test is first applied on the tenth policy anniversary –the total funds accumulated in the policy cannot exceed 250% of the accumulated value of the funds three years earlier –test is applied on each subsequent anniversary

17/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY If you deposit the minimum premium If you invest more than the minimum premium... Additional tax shelter Maximum fund after 10 years Fund after 7 years Maximum fund after 10 years Effects of the 250% Rule

18/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY Result of the 250% Rule It is important to encourage your clients to deposit regular excess premiums into their policy – especially in the first 7 years – Otherwise, why place your client into a U/L policy?

19/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY Sales Ideas and Concepts Wealth Accumulation Collateral Financing – leveraging Inter-generational Wealth Transfer – “generation skipping” estate planning

20/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY WEALTH ACCUMULATION CREATING the TAX EFFICIENT ZONE

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23/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY Collateral Financing Leveraged Life Concept

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26/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY INTER-GENERATIONAL WEALTH TRANSFER TRANSFERRING WEALTH TO THE NEXT GENERATION

27/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY What Is It? Establish a Universal Life plan for the person who is to receive benefit Transferor may retain ownership or have recipient as owner (depending on age) Make (or provide funds for) deposit Transfer of part of a person's wealth to the next generation(s)

28/29 DESJARDINS INSURANCE | FOR REPRESENTATIVES' USE ONLY Universal Life in a nutshell provides lifetime insurance protection allows for accumulation of funds on a tax deferred basis is extremely flexible in terms of number and amount of deposits and withdrawals whatever else you require from a "tax-deferred" vehicle

29/29 FOR REPRESENTATIVES' USE ONLY Thank you!