1. Paul Morra Senior Business Development Manager
BMO Insurance Whole Life Plan, Spring 2017

2. New product, new opportunities
Agenda
New product, new opportunities
What we’ve learned about the whole life market
Our new plan: BMO Insurance Whole Life Plan
Case study
Performance Bonus
Our other solutions
Ideas to grow your business

3. Continued low interest rates = lower dividend scales on PAR
Decreasing fixed income yields continue
to drag down dividend rates
-Prolonged low interest rate environment has had an impact on the insurance industry
-In particular, this has impacted the yield on bond yields – the result is seen on participating whole life par plan dividend scales
-highs of +12% in the mid 80s; current levels are about half of that around 6%
-this has prompted many advisors to take a more cautionary note when it comes to illustrating whole life plans – showing the primary scenario along with a -1% scenario seems to be the norm these days; some advisors may also be choosing to look at -2% scenarios

4. According to LIMRA, take a look at who buys insurance…
Insureds between the ages of account for 27% of policies but 44% of premiums
BMO Insurance’s focus:
ages 45-65
As are as age demographics, we understand that whole life insurance has a broad appeal
From young to old, whole life insurance can fit many planning needs
As far as BMO Insurance is concerned, we feel that our products will also have a broad appeal but our focus is in the age bracket
Source: LIMRA, 2015 Annual Canadian Individual Life Insurance Sales Supplement

5. Premium pay periods… according to a BMO Insurance survey*
20 Pay and Life Pay most common premium options
Quicker Pay options have been introduced into the marketplace
have an appeal for affluent and business owner clients
Advisors and clients are looking for more premium options
-Whole life plans have been on the market for many years – as far as premium options are concerned, 20 Pay and Life Pay options have been around for a long time and are
pretty much standard across most whole life plans;
-In a survey that BMO Insurance conducted, advisors told us that on average, they account for 82% of all new whole life policies
-advisors also said that they want more options when it comes to premium payment periods
-in particular, we’ve seen that quicker pay options are becoming more popular….. This may be prompted by the recent change in tax rules and the appeal that these premium options have with affluent clients
Note: in BMO survey, n=136
Given the following Premium Pay Period options, how would your Par Whole Life Sales likely be allocated (percentage wise/% by # of policies) across each of these options? (TOTAL MUST ADD UP TO 100)
Source: BMO Insurance Whole Insurance Survey: Summer 2015

6. Dividend Options… according to a BMO Insurance survey
Close to ¾ of an advisor’s new par whole life clients will select Paid-Up Additions
-When it comes to which dividend option clients are selecting, we found in our survey that advisors said that on average, close to ¾ of their clients choose Paid-Up Additions
-Other options like 1 year term insurance, premium reduction or the cash option are used less frequently.
Note: in BMO survey, n=136
Most popular dividend option:
Paid-Up Additions
Overall, what percentage (%) of your clients choose the following DIVIDEND PAYMENT OPTIONS? (Total must add up to 100)
Source: BMO Insurance Whole Insurance Survey: Summer 2015

7. Introducing the BMO Insurance Whole Life Plan
BMO Insurance Whole Life Plan, Spring 2017

8. Key Features: simple design
3 premium options
10 Pay, 20 Pay and Pay to Age 100 (“Life Pay”)
Performance Bonus
Performance Bonus = Performance Bonus Rate x Guaranteed Cash Value
Automatically used to buy Paid-Up Additions
Backed by the strength of BMO Capital Markets and BMO Global Asset Management
Performs well in adverse scenarios
Optional riders
Term 10, 20 and 30 riders, LB 10, 20, 75 and 100 riders
Waiver of Premium
BMO Insurance Health Advocate Plan
Simple.
3 options to suite different clients needs:
Pay to age 100- most affordable
20 pay option – for clients looking to pay up their policies within a reasonable period of time
10 pay for clients who want to quick pay their policies – may have a special appeal for affluent clients, business owners
Simple performance bonus formula
Based on guaranteed values; PBR x GCSV; right in the contract
Used to automatically buy PUA
And backed by the strength and investment expertise at BMOFG; Mathew will provide more details
What you’ll see is that this product performs well in adverse scenarios
Simple set off riders: term, CI, WP
BMOI HAP – BD and MS services offered at no extra cost on all policies

9. Key Features: simple design… with easy-to-use tools
Easy-to-use software
Easy life insurance application
Easy-to-understand policy contract and statement
To help support advisors:
Simple application which we have received great comments about
Simple contract language – easy to explain to clients; includes table of guaranteed cash values and RPU values
Simple policy statement: 2 pages

10. Key Features: flexible options
Premium switch option*
switch to longer pay duration, e.g. from 10 Pay to 20 Pay
Reduced Paid-Up Option
guaranteed amounts – stated in the policy contract
can be used to create a quicker pay (e.g. 5 or 8 pay)
Policy loans
borrow up to 90% of the cash value (cash withdrawals)
borrow to pay for premium (automatic premium loan)
current interest rate: 5.50%
Flexible
Premium switch provides ability for clients to lower premiums if affordability becomes an issue
Can switch from 10 -> 20, 10 -> 100, 20 -> 100
Can’t switch from 20 -> 10 or 100 -> 20, 100 -> 10
For added flexibility, RPU allows clients to stop paying premiums, for a reduced amount of coverage
To help you demonstrate the impact of this, we’ve put the RPU feature right on the software so you can show your clients how this could work for them
For clients who choose the 10 pay, you may want to use this feature to create a “quicker” pay – essentially turn 10 pay into a 5 pay or 8 pay
Policy loans: borrow to pay premiums or draw out cash; variable rate currently at 5.5%
helps with changes to client’s financial situation/affordability
*Subject to underwriting, if exercised.

11. Key Features: strong guarantees
Highly competitive Guaranteed Cash Values
performs well in adverse scenarios
Guaranteed Reduced Paid-Up Values
Performance Bonus Rate:
guaranteed to be at least 5.50% until April 30, 2020
will never be negative
Guaranteed CV are very competitive – will see in case studies
Helps this product in adverse scenarios – when benchmarking how it will perform against other plans in the marketplace
Guaranteed RPU – right in the policy contract – and can illustrate on the Wave
Important element is the performance bonus – strong guarantee:
AT LEAST 5.5% until April 30, 2020
Never be negative
Guaranteed.

12. Estate Planning
Solutions
Case Study

13. Case study: Carl and Cathy
55 year old professionals
Have three adult children from their first marriages: Ellen, Jason and Christine
Have a sizeable retirement savings portfolio
Already have some life insurance
Have a cottage that’s increased significantly in value
Plan to retire in 10 years

14. Insurance Checklist for Carl and Cathy
Results of needs analysis:
Distribute their estate equitably between their three children
Pay-off plan quickly
Leave the cottage to Ellen and the rest of their to estate to Jason and Christine
Minimize the income tax they pay on their investment portfolio
Minimize the negative impact that volatility could have on their investment returns

15. The BMO Insurance Whole Life Plan solution for Carl and Cathy
$500,000 of basic coverage on a Joint Last-to-Die basis
“10 Pay” premium option: $25,595/year
Use the death benefit to offset the capital gains tax due on their cottage
Low maintenance: assets behind the plan managed by BMO Insurance in partnership with BMO Capital Markets and BMO Global Asset Management

16. 10-Pay (Joint Last MNS 55/FNS 55)
Total Death Benefit
Primary (Current) Scenario
Alternative Scenario
BMO WLP
PAR WLP
Non-PAR WLP
Annual Deposit
25,595
Total Deposit
255,950
FACE Solve
500,000
381,073
Rate
5.50%
6.25%
5.25%
Year 5
507,113
417,499
527,487
Year 10
542,755
500,612
683,130
Year 15
630,620
604,530
623,625
Year 20
776,845
725,730
689,842
Year 25
944,103
870,461
763,608
Age 85
1,107,924
1,049,362
852,846
Year 35
1,267,740
1,280,339
959,224
Year 40
1,423,038
1,560,835
1,069,410
Year 45
1,573,205
1,838,510
1,132,357
BMO WLP
PAR WLP
Non-PAR WLP
Annual Deposit
25,595
Total Deposit
255,950
FACE Solve
500,000
381,073
Rate
Minus 1%
Year 5
505,820
410,090
522,602
Year 10
534,983
470,277
662,411
Year 15
606,871
539,580
581,009
Year 20
726,508
617,701
616,760
Year 25
863,356
707,964
648,892
Age 85
997,392
816,182
685,835
Year 35
1,128,150
953,015
727,770
Year 40
1,255,211
1,113,083
768,838
Year 45
1,378,075
1,259,244
791,158
PAR WLP: Sun Life
Non-PAR WLP: Manulife Performax Gold
Source: Wave 34.0 and other companies illustration software
NOTE: For “Non-PAR WLP”: ADO & Premium Offset are applied to achieve 10-Pay.

17. 10-Pay (Joint Last MNS 55/FNS 55)
Total Death Benefit: the effect of an alternative (-1%) scenario
BMO WLP
PAR WLP
NON-PAR WLP
Year 15
-3.8%
-10.9%
-6.8%
Age 85
-10.0%
-22.2%
-19.6%
Year 45
-12.4%
-31.5%
-30.1%
The BMO Insurance Whole Life Plan
projects better values in alternative scenarios!
PAR WLP: Sun Life
Non-PAR WLP: Manulife Performax Gold
Source: Wave 34.0 and other companies illustration software
NOTE: For “Non-PAR WLP”: ADO & Premium Offset are applied to achieve 10-Pay.

18. 10-Pay (Joint Last MNS 55/FNS 55)
Guaranteed Cash Value
BMO WLP
PAR WLP
NON-PAR WLP
Annual Deposit
25,595
Total Deposit
255,950
FACE Solve
500,000
381,073
Year 5
16,475
4,798
6,076
Year 10
66,980
102,204
21,290
Year 15
167,380
204,834
65,120
Year 20
293,170
233,060
132,114
Year 25
329,400
261,866
166,688
Age 85
364,085
290,183
200,515
Year 35
395,305
318,219
233,091
Year 40
421,975
350,701
263,656
Year 45
444,350
358,628
289,540
GTD CSV ≥ Total Deposits
Year 20
Year 24
Year 38
PAR WLP: Sun Life
Non-PAR WLP: Manulife Performax Gold
Test case 2:  Carl and Cathy, JLTD, two 55 year olds, 10 pay
Guaranteed CSV break-even (= total premiums paid):  year 20
GCSV IRR at 85 (actual age, not ESA):              1.1%  (1.2% for ESA 85)
Total CV IRR at 85 (actual age, current bonus):  3.9%  (4.1% for ESA 85
Source: Wave 34.0 and other companies illustration software
NOTE: For “Non-PAR WLP”: ADO & Premium Offset are applied to achieve 10-Pay.

19. 10-Pay (Joint Last MNS 55/FNS 55)
Total Cash Value
Primary (Current) Scenario
Alternative Scenario
BMO WLP
PAR WLP
NON-PAR WLP
Annual Deposit
25,595
Total Deposit
255,950
FACE Solve
500,000
381,073
Rate
5.50%
6.25%
5.25%
Year 5
18,619
17,855
74,378
Year 10
82,115
152,126
179,550
Year 15
221,287
312,310
207,224
Year 20
425,192
421,346
333,266
Year 25
571,774
561,337
439,472
Age 85
739,101
740,596
554,095
Year 35
923,234
973,955
688,501
Year 40
1,120,401
1,295,879
833,517
Year 45
1,331,000
1,643,592
958,942
BMO WLP
PAR WLP
NON-PAR WLP
Annual Deposit
25,595
Total Deposit
255,950
FACE Solve
500,000
381,073
Rate
Minus 1%
Year 5
18,230
15,199
72,099
Year 10
79,364
139,457
168,095
Year 15
211,486
281,071
182,257
Year 20
401,187
362,330
285,656
Year 25
527,705
461,900
357,669
Age 85
670,916
583,438
428,928
Year 35
827,246
735,273
506,185
Year 40
993,413
937,158
584,679
Year 45
1,169,789
1,132,876
654,930
PAR WLP: Sun Life
Non-PAR WLP: Manulife Performax Gold
Source: Wave 34.0 and other companies illustration software
NOTE: For Non-PAR Whole Life plan: ADO & Premium Offset are applied to achieve 10-Pay.

20. 10-Pay (Joint Last MNS 55/FNS 55)
Total Cash Value: the effect of an alternative (-1%) scenario
BMO WLP
PAR WLP
Non-PAR WLP
Year 15
-4.4%
-10.0%
-12.0%
Age 85
-9.2%
-21.2%
-22.6%
Year 45
-12.1%
-31.1%
-31.7%
The BMO Insurance Whole Life Plan
projects better values in alternative scenarios!
PAR WLP: Sun Life
Non-PAR WLP: Manulife Performax Gold
Source: Wave 34.0 and other companies illustration software
NOTE: For “Non-PAR WLP”: ADO & Premium Offset are applied to achieve 10-Pay.

21. 10-Pay (Joint Last MNS 55/FNS 55)
Internal Rate of Return
on Total Death Benefit (%)
Primary (Current) Scenario
BMO WLP
PAR WLP
NON-PAR WLP
Annual Deposit
25,595
Total Deposit
255,950
FACE Solve
500,000
381,073
Rate
5.50%
6.25%
5.25%
Year 5
50.06
42.41
51.64
Year 10
13.32
11.91
17.32
Year 15
8.67
8.26
8.56
Year 20
7.29
6.83
6.49
Year 25
6.08
5.42
Age 85
5.86
5.64
4.80
Year 35
5.35
5.38
4.40
Year 40
4.92
5.19
4.09
Year 45
4.56
4.96
3.72
PAR WLP: Sun Life
Non-PAR WLP: Manulife Performax Gold
Source: Wave 34.0 and other companies illustration software
NOTE: For “Non-PAR WLP”: ADO & Premium Offset are applied to achieve 10-Pay.

22. Insurance Checklist for Carl and Cathy
Results of needs analysis:
Distribute their estate equitably between their three children
Pay-off plan quickly
Leave the cottage to Ellen and the rest of their to estate to Jason and Christine
Minimize the income tax they pay on their investment portfolio
Minimize the negative impact that volatility could have on their investment returns

23. The
Performance Bonus

24. BMO Insurance Whole Life Plan: Performance Bonus
Performance Bonus Rate x Guaranteed Cash Value
Performance Bonus Rate
Declared annually
Based on the smoothed market performance
Guaranteed never to be negative
Guaranteed to be at least 5.50% until April 30, 2020
Performance bonus
Simple formula vs complicated/black box in the industry
Performance bonus rate
U.S exposure provides diversification protection

25. BMO Insurance Whole Life Plan: performance backed by expertise
Part of BMO Financial Group with $692 billion in total assets as of January 31, 2017
Named Best House in Canada for structured products at the 2016 American Structured Products and Derivative Awards.
- Able to get the % through key partnerships, CM.
BMO Asset Management Inc. is part of BMO Global Asset Management which has more than US$229 billion in assets under management globally as of December 31, 2016*.
*Assets under management include discretionary and non-discretionary assets under management.

26. Asset Exposure: total exposure
- Real estate exposure amongst other sectors
*Approximated as of February 28, 2017

27. Asset Exposure: fixed income exposure
- Real estate exposure amongst other sectors
*As of February 28, 2017

28. Asset Exposure: equity exposure
- Real estate exposure amongst other sectors
Includes Canadian and U.S. exposure
*As of February 28, 2017

29. Performance Rate: back-tested results
Calendar Year
Portfolio
Return
Performance Bonus Rate
Rolling 5 Year
Portfolio Return
2008
4.49%
5.50%
2009
9.36%
6.90%
2010
8.25%
5.75%
7.35%
2011
6.00%
2012
7.01%
6.25%
7.28%
2013
7.48%
6.50%
7.89%
2014
9.20%
6.75%
7.86%
2015
0.63%
7.00%
6.29%
2016
6.69%
6.16%
Results assume level deposit each month into the fund
- Stability of our PBR over the portfolio return

30. Performance Bonus Rate: illustration scenarios
If equity market returns are… 5% 7% 9%
Fixed Income
2.25%
Equity
3.25%
4.25%
Performance Bonus
4.50%
5.50%
6.50%
Illustration Rate
Minus 1
Current
Plus 1
This is an approximation based on typical market conditions.

31. BMO Insurance Whole Life Plan: Simple. Flexible. Guaranteed.
Simple plan design
Strong guaranteed values
Performance Bonus
Backed by the expertise at BMO Capital Markets and BMO Global Asset Management
US and Canadian equity exposure
Performance Bonus = Performance Bonus Rate x Guaranteed Cash Value
Smoothing formula will allow for gradual changes in the PBR
Performs well in alternative scenarios
Flexibility
3 premium options
Premium Switch Option*
Reduced Paid-Up Option that you can illustrate
*Subject to underwriting, if exercised.

32. What is the guarantee on the Performance Bonus Rate?
The Performance Bonus Rate is guaranteed to be at least 5.50% until April 30, 2020 and is also guaranteed to never be negative for the life of the policy.

33. Don’t forget about our other solutions

34. We have solutions for a broad range of financial planning goals!
Whole Life Insurance
BMO Insurance Whole Life Plan
Pure Term 100
Universal Life Insurance
Life Dimensions
Life Dimensions (Low Fees)
Wealth Dimensions
LifeProvider (Low Fees)
Term Insurance
Term 10, 20 and 30
insureNOW
insureNOW Plus
Lending programs from BMO Private Banking and Specialized Lending groups
Critical Illness Insurance
Living Benefit 10
Living Benefit 20
Living Benefit 75
Living Benefit 100
15 Pay Living Benefit 100
Single Premium
Immediate Annuities
BMO Guaranteed Investment Funds
75/75
75/100
100/100

35. BMO Smart App. Now at Your MGA!
Intuitive design
Flexible navigation
Secure
Built-in edit / review features
Personal dashboard
Clone app feature
Change, save & exit anytime
Online Wave
Practice app feature
Instant ID access for new advisors
Print for wet signature option
Versatile , easy eSignature
In person or remote
On tablet or PC
Script, mouse, smartphone
No cost temporary ADB coverage for up to $1,000,000 on every app
Get Started Reward
Online video tutorials with notes. In just 20 minutes, you’re ready to go with Smart App.

36. We’re here to help. Give us a call!
Regional Vice President Business Development
John McMeans
Senior Business Development Manager
Paul Morra
Business Development Specialist
Mimi Cheng
extension 4017
Ontario Sales Office