1. Individual Disability Insurance Solutions Wage Loss Replacement Plans
Michael Thompson
RVP - Ontario
September 8, 2016

2. Agenda RBC Insurance- A Great Choice for your clients
Why do business with RBC Insurance?
Are some of your best clients exposed?
The Wage Loss Replacement Plan Option
Let’s begin with the “Why” and the “Who”. It is important to understand that a need for this product exists in the Canadian marketplace and then also to understand where do you find the people that need your help.
Once you learn who they are and where to find them we will look at the various products, features and benefits, and the processes involved in providing these solutions to your clients.

3. RBC Insurance a Great Choice for your Clients!
Leading provider of Individual Disability Insurance in Canada- 44% market share
Over 100+ Years of Disability Claims and Underwriting experience
In 2014 we managed 11,066 disability claims in Canada
200 employees in disability claims centre
In 2014 we paid out $445 million dollars in disability claims in Canada
Offer many unique living benefit solutions in the market place

4. Why Do Business with RBC Insurance?
Licensed Sales Consultants to assist with the sales process
New streamlined disability application designed by the input of our Top Producers.
Increased Medical Testing Limits: Ages up to $6000 per month of disability insurance with just the application.
No Financial underwriting requirements for employees without deductible business expenses: Up to $10,000 per month benefit for Professional or Foundation Series.
Combo limits and 15% discount for Topping up Owners, Executives, Office Workers, CPA’s , Lawyers, Computer Professionals, Engineers, Architect’s, Doctors, Actuaries, Consultants, Optometrists.

5. Why Do Business with RBC Insurance?
Established Professional Discount- 5% for 3 or more years in occupation with income over $100K past 2 years or more. CPA’s, Executives, Lawyers, PENG, Pharmacists, Optometrists, Medical Specialists.
New Medical Student Offering- 25% Discount, Guaranteed Standard Issue, 12 months Free for Students. 5 months free for Residents and Fellowships.
Wage Loss Replacement now available under the Fundamental Series.
New Guaranteed To Issue program for Wage Loss Replacement Plans for 2 or more lives.

6. Are Your Clients Exposed?
Experience tells us :
Many people do not realize the risk and the impact a disability can have on their Income / Lifestyle / Business.
Many people have not planned properly for a disability.
Many people do not understand the current coverage they have in place or how it works.
Many people do not realize there are various products available to protect all their personal and business needs.
We are here to help you help your clients.

7. Sample Executive Case
7 Executives on the management team of a Manufacturing company.
All 7 have significant earning levels.
Maximum LTD $6000 per month non-tax.
Never examined Group LTD before in relation to earnings or plan definitions.
No one has ever used on the management team.
No idea of the exposure they had!
If I asked you what your most valuable asset is, what would your answer be? (wait for response)

8. Senior Executive 27% 94%+ Annual Monthly Gross Income (Salary )
$500,000
$ 41,666
Approximate Take Home Pay*
$268,644
$ 22,387
Current Group LTD Benefit ( Non-Taxable)
$ 72,000
$ 6,000
27%
Current LTD Benefit ( Non Taxable )
$ 6,000
Additional Monthly Coverage Available
Individual Top Up Benefit
Retirement Savings Benefit
$13,500
$ 1,500
94%+
Maximum Total Disability Benefit
Critical Illness Benefit:
Lump Sum Benefits
* Approximates provided based upon 2016 Tax Rates
$21,000
$500,000 8

9. The Benefits of Topping Up Group LTD with Individual
In addition to removing the Shortage Individual Plans provide your clients with more comprehensive coverage:
Guaranteed Level premiums and coverage to age 65
Total Disability: Regular Occupation definition to age 65
Partial / Residual Benefits to age 65
12 month accumulation of waiting period
Benefits paid based upon loss of time
No Offsets or Reductions at claim time
Future Insurability and Cost of Living Increases
Retirement Protector
Long Term Care Conversion
Life Time Renewable
Discounted Premiums / Combo Limits
Wage Loss Replacement Plans- Corporate Owned / Paid

10. The Big Question?
Ok we understand the problem and we like the individual option to remove the shortage.
Can we write it off through the Corporation as a business expense?

11. What Is A WLRP?
An arrangement made between an employer and 2 or more employees to provide disability income protection for the employees ( group or class of employees)
Individual disability insurance policies are used to fund the benefits and are “grouped” under a common plan or arrangement
Grouped “arrangements” qualify as group accident and sickness insurance policies for income tax purposes
8. Read slide title and then refer to following bullets
A Wage Loss Replacement Plan is a disability income replacement program set up by an employer for a group of employees.
Unlike group insurance solutions, a WLRP is comprised of individual disability insurance policies grouped together under a common plan.
For tax purposes a grouped “arrangement” such as a WLRP is considered to be a group accident or sickness insurance plan.
By using a WLRP, we transform what would normally be a personal expense for the insured into a tax deductible business expense for the employer.

12. How Is A WLRP Structured
Employer is the owner and payer of the individual disability policies
Employees are the insured and entitled to receive the disability benefits directly
All employees in the class, (as defined in the plan) must be offered participation in the arrangement
Upon termination of employment, the plan may allow for the employees to take the individual disability policies on their life with them
9. Read slide title and first 3 bullets
Upon termination of employment, the plan may allow for the employees to take the individual disability policies on their life with them subject to the employee picking up future premiums and meeting the insurer’s requirements for assignment in such cases. This preserves insurability for the employee and may lock-in attractive benefits that were negotiated as part of the plan.

13. Eligibility
Insured must be an employee and benefits must be based on employment salary only
At least 2 employees are required to form a group or class of employees. ( must be defined)
Cannot just be the shareholders of the Corporation on their own but they can be part of a Class i.e.… Senior Management Class
Offered to all employees of the defined class
10. Read slide title and first bullet along with sub point
WLRP’s are arrangements between an employer and employees therefore the benefits must be associated with employment earnings. Basing disability income on dividends, corporate profits, or income splitting arrangements jeopardizes the plan as all of these sources of income related to one’s shareholding, not their employment.
WLRP’s must have two or more employees to qualify as a grouped “arrangement” and thus receive the favourable tax treatment accorded to group accident and sickness insurance policies.
Read bullets 3, 4, and 5
Although the benefit needs to be offered to everyone in the class, if some of the employees don’t qualify for the insurance and are excluded on medical grounds, that will still be acceptable.

14. WLRP - Advantages For The Employer
Helps attract and retain key employees
Insurer assumes the responsibility to pay benefits in case of disability (not the company)
Cost effective means of providing the benefits
Premiums are tax-deductible expenses
Guaranteed premiums stabilize the cost of providing disability income protection
Group discounts for 3 or more employees
Simplified GSI process for groups of 10 or more may be available
GTI offering for 2 or more lives
14. Read title
WLRP is a significant employee benefit that helps attract and retain key employees.
Employer selects participants and benefit levels by defining classes of employees.
Read second and third point
It costs less for the employer to pay the premiums for a WLRP than to increase the employee’s salary in order to allow them to pay the premiums personally.
Read point 4
WLRP is an effective method to establish a disability benefit program as it stabilizes costs and eliminates the uncertainty associated with fluctuation of group insurance rates.
Read points 6 and 7

15. WLRP - Advantages For The Employee
No cost as the employer pays premiums
Employer funded premiums are not added to the employee's T4 or salary
Disability benefits are paid directly to the employee and are taxable as salary, (benefits are typically increased to account for the tax)
RRSP contributions room is maintained
Guaranteed and non-cancellable policies ensure protection is available to age 65
Upon leaving employment, the policy can be transferred to the employee
12. Read slide title and bullets 1 and 2
This is not a shared cost arrangement, the employer pays the full tab.
Read bullet 3
Because the benefits are taxable as employment income they are included when determining RRSP contribution room. Even if the employee is unable to take advantage of this room while disabled, it will be there in the future when extra funds become available.

16. New ( GTI ) Guaranteed To Issue for WLRP Cases
Guarantees no one in the group will be declined
Fully application and medical evidence required
Can be combined with GSI or Fully Underwritten on a top up basis.
Group of 2 or more lives with 3 or more years experience and earning a minimum of $100K the past 2 years.
Designed for CPA’s, Actuaries, Architects, Executives, Lawyers, PENG, Pharmacists, Optometrists, Medical specialists.

17. GTI- Coverage Maximums
Required GTI Maximum
Lives
2-9 lives = $1500 per month
10-24 lives = $2500 per month
25-49 lives = $5000 per month
lives = $7500 per month
Based upon # of participants in the group

18. We Can Help you Help your Clients
In Summary:
Help your clients develop a Disability planning Strategy
Protect their earning power with a Professional Income Replacement Plan.
Remove any shortages they have with their current Group LTD by Topping up with Individual Disability Protection.

19. Let us Help you, Help Your Clients
The next step is to identify Professional and Business Owner client that could benefit from these ideas shared today.
Let us Help you, Help Your Clients
I would like to THANK YOU for taking the time to join us this afternoon. The next step in providing this solution to your Top 10 clients is to set up an appointment with me to or to set up a Joint Field call for us to go and sit down with your clients, so they don’t buy this needed coverage from another agent that comes knocking on his door. So the time to see them is NOW !
But make sure that we have both the Business Overhead proposal and also the personal income replacement solution so that we can cover off both at the same meeting.
However, IF there is one of the Top 10, that does not want to purchase it, at this time, make sure to have them sign the premium summary page indicating that they have decided not to purchase it now and put that sheet into their personal file so they can not say that you did not offer them this valuable coverage, when they are disabled.
And remember, CHOICE, NOT CHANCE SHOULD DETERMINE ONE’S DESTINY !