1. AGELESS INVESTING Nicole Boffo CFP FOR ADVISOR USE ONLY
Good Morning and thank you for having me here today.
Today I’d like to talk to you about a concept we call Ageless Investing which includes estate and legacy planning considerations when selecting investment applications and solutions.
FOR ADVISOR USE ONLY

2. Agenda
This material is presented for informational purposes only, and is not a legal, tax or investment opinion. The provision of the information contained herein and any oral or written communication regarding the same should not nor is intended to be construed as such. Interested persons should seek retained independent professional advice before acting or foregoing action in relation to any of the matters mentioned herein.
Ageless Investing
Introduction
Cost-effective Estate Planning
Death in a Down Market
Spousal Income Splitting
Class Plus 3.0
Empire Life Advantage
Ageless Investing is about using insurance-based investment products to address issues and options for the age 80+ crowd, which is a growing demographic--people interested in ongoing deposits after age 80 who see the value in combining investment and estate planning as they earmark money for the next generation.
Our presentation today will consist of four examples of Ageless Investing in action – Cost-effective estate planning, death in a down market, Spousal Income Splitting, and the power of Class Plus 3.0.
Through these case studies, we will see how the investment and legacy goals of older clients can be accomplished through the application of thoughtfully structured insurance based investments.
And we will learn about contingency planning that supports effective intergenerational wealth transfer.
The this will be followed by the Empire Life advantage, which is the foundation of everything we do.
For advisor use only

3. Ageless Investing: An Introduction
Age 80+ customers interests:
Asset growth including capital gains
Deferral of capital gains
Control and use of invested monies
Guarantees and downside protection
You may frequently deal with customers age 80 and older, who have assets that they potentially will not need to support their lifestyles. These assets may in fact be earmarked for heirs or favourite causes.
These customers may display the following characteristics or interests:
They are interested in asset growth including capital gains
They want to defer capital gains as long as possible
They want ongoing control and perhaps use of their investments
They are looking for guarantees and downside protection
What can we do to help these people?
For advisor use only

4. Ageless Investing: An Introduction
Why insurance-based assets
Probate-free transfer if named beneficiary on policy
Pass assets outside the estate
Benefit guarantees, resets on segregated funds
Controlling assets
Investment choice
Flexibility
Passing on assets by structuring policy with:
Successor owner
Successor annuitant
Beneficiary
…we can introduce them to the concept of Ageless Investing. It is about using insurance-based investment products to address issues and options for the age 80+ crowd, people interested in ongoing deposits after age 80 who see the value in combining investment and estate planning as they earmark monies for the next generation.
Here’s why insurance-based assets might be the answer:
They offer a probate free transfer to named beneficiaries
The ability to bypass the estate
And the powerful guarantees that segregated funds offer
Clients maintain control of their assets, giving them choice and flexibility.
And they are able to pass on their assets by structuring a policy with a successor owner, successor annuitant and beneficiary

5. Ageless Investing: An Introduction
And…
Preserve assets under administration from one generation to the next
And from a business perspective, this combined planning approach can help preserve the assets you administer for a family from one generation to the next.
Now, I’d like to provide examples of Ageless Investing in Action.

6. AGELESS INVESTING: Cost-Effective Estate Planning
FOR ADVISOR USE ONLY

7. Ageless Investing: Cost-effective estate planning
Peter, 88-year old retiree, grandfather, and long-term investor
Has diversified investment portfolio
Does not require entire portfolio to support lifestyle
Wishes to begin planning estate bequest to son, Joseph, 55
Joseph married to Catherine, 54
Meet Peter, a 88 year old retiree, grandfather and long term investor. Peter does not need his entire portfolio to support his lifestyle. He would like to bequest some of these assets to his son, Joseph, age 55. Joseph is married to Catherine, age 54.
For advisor use only

8. Ageless Investing: Cost-effective estate planning
Peter is concerned about:
Asset control
Asset access
Security
Estate planning
Solution:
Empire Life Guaranteed Investment Fund 75/100
Peter is concerned about control and access to his assets, the security of investments, and cost-effective estate planning.
Peter’s advisor directed him to transfer a portion of his assets into an Empire Life Guaranteed Investment Fund 75/100 policy because it meets his objectives.

9. Ageless Investing: Cost-effective estate planning
Policy Set-up:
Peter is owner and beneficiary
Joseph, Peter’s son, is successor owner and annuitant
Joseph’s wife, Catherine, is successor annuitant
Peter’s advisor set up Peter as the owner of the policy.
Peter’s son, Joseph, named as both successor owner and the annuitant on the plan.
Joseph’s wife Catherine was named as the successor annuitant.

10. Ageless Investing: Cost-effective estate planning
Advantages of this structure:
Investment control
Access to assets1
Security of 100% Death Benefit Guarantee2, 3
Protection from market downturns with Death Benefit Guarantee resets4
Cost-effective estate transfer
Peter now has the investment control and access to assets he requires. He has the ability to make deposits, determine investment allocations and make rebalancing decisions as well as retain rights to access his portfolio for more retirement income.
Peter has the ability to lock in potential gains. With Joseph as annuitant, Peter, as owner, can reset the benefit guarantees and take advantage of any market gains, even after he’s 80.
Since the policy is based on the life of Joseph, who is younger, Peter as owner retains all benefits of the policy even after Peter himself turns 90. The Death Benefit Guarantee will continue to reset every year until Joseph turns 80. And Peter can continue to make deposits beyond age 90. .

11. Ageless Investing: Cost-effective estate planning
When Peter dies:
No death benefit payable
Capital gains and losses triggered and taxable to Peter’s estate
Assets pass directly to Joseph, as successor owner, at fair market value
Probate costs are bypassed
Joseph taxed on future income earned
Let’s look at what happens in the event of Peter’s death:
No death benefit is payable as Joseph remains as annuitant. The assets pass directly to Joseph, as successor owner, at fair market value.
Capital gains and losses are triggered on Peter’s death and are taxable to his estate.
The costs of probate are bypassed. Joseph—the successor owner—retains the current surrender fee schedule (deferred sales charges) and maturity guarantee period.
Joseph, as successor owner, will receive and be taxed on all income earned after Peter’s death.

12. Ageless Investing: Cost-effective estate planning
Joseph dies before his father:
No death benefit is payable
No deemed disposition of the segregated funds because Joseph’s wife, Catherine, becomes annuitant
Policy continues as is with Peter as owner
See “Ageless Investing with Empire Life Guaranteed Investment Funds” 75/100 (INV-781)
At this point, I’ll focus on what happens if Joseph dies, Peter’s son:
No death benefit is payable and there will be no deemed disposition of the segregated funds as Catherine will automatically become the policy annuitant.
Peter continues to meet all his objectives but with the younger Catherine as the annuitant
For more information on this concept, see “Ageless Investing with Empire Life Guaranteed Investment Funds” 75/100 (INV-781), which is good for you and your clients.

13. AGELESS INVESTING: Death in a Down Market
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14. Ageless Investing: Death in a Down Market
Susan, 80, retiree
Douglas, son, in armed forces, divorced with no children
If Douglas predeceases her, local charity named beneficiary
Let’s look at a scenario that may concern your clients – what happens if there’s a death in a down market?
Here we have Susan. She is 80, retired, and has one son, Douglas.
Douglas is in the armed forces and works in hostile regions. He is recently divorced with no children.
Susan has considered that Douglas may predecease her because of his line of work. For that reason, a local charity has been named as the beneficiary to receive the proceeds of her estate.
For advisor use only

15. Ageless Investing: Death in a Down Market
Susan is concerned about:
Investment control
Market volatility
Wants to retain ability to reset benefit guarantees
Worried about bear market impacting market value and legacy
Solution:
Empire Life Guaranteed Investment Funds 100/100
Read list
Susan actively manages her investments and is primarily concerned with protecting her assets from market volatility while retaining the ability to reset benefit guarantees to take advantage of any market gains periodically.
She will be leaving a substantial legacy, either to her son or the charity. She asks her advisor what will happen if her son were to die prematurely during a bear market, and the market value falls below net deposits with insufficient time for market recovery before her own death.

16. Ageless Investing: Death in a Down Market
Policy set-up:
Susan is owner and beneficiary
Douglas is annuitant and successor owner
No successor annuitant is named
Maturity date set at 15 years after issue date

17. Ageless Investing: Death in a Down Market
If Douglas dies first:
Death benefit payable
100% Death Benefit Guarantee assures return of Susan’s capital
Susan reinvests in Empire Life GIC and names charity as beneficiary
Let’s imagine that a down market drops the market value of the plan to 70% of net deposits. What would happen if Douglas were to pre-decease Susan in this environment?
The death of Douglas, the annuitant, would result in a disposition of the policy.
The 100% Death Benefit Guarantee assures a return of Susan’s capital on death.
Finally, Susan reinvests in an Empire Life GIC and names a charity as the beneficiary.

18. Ageless Investing: Death in a Down Market
When Susan dies:
No death benefit as Douglas is annuitant
Capital gains and losses triggered and taxable to Susan’s estate
Douglas becomes owner
No probate costs: quick transfer to Douglas
He keeps current maturity and deferred sales charge schedules, and death benefit guarantee
Only 7 more years to maturity date
His Adjusted Cost Basis is adjusted to fair market value
Only taxed on future growth
Let’s look at the unfortunate event of Susan’s death 8 years after the policy is issued:
No death benefit is payable as Douglas continues as annuitant.
Capital gains and losses are triggered and are taxable to Susan’s estate
Douglas becomes the owner.
No probate costs; it’s a fast, efficient transfer to Douglas.
Douglas maintains current maturity schedule, deferred sales charge schedule and death benefit guarantee (only needs to wait for 7 years until the maturity guarantee).
He avoids acquisition and set-up fees for reinvestment.
He can also rebalance the portfolio to reflect his risk tolerance and goals or plans.
His adjusted cost base is adjusted to the fair market value of plan.
He’s only taxed on future growth.

19. AGELESS INVESTING: Spousal Income Splitting
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20. Ageless Investing: Spousal Income Splitting
William, 65-year old entrepreneur, married and ready to retire
GIC included in his portfolio
Transferred some assets to wife
Still paying taxes on transferred assets
Let’s meet William, a 65-year old entrepreneur, who is married to Dana, also age 65. They are both ready to retire.
William has a GIC included in his portfolio.
He has transferred a portion of his assets to his wife, Dana
William is still paying taxes on income from the assets in Dana’s name
For advisor use only

21. Ageless Investing: Spousal Income Splitting
William is concerned about:
Income taxes, claw back and reductions in net income tested benefits
Expenses in the event of critical illness
Taxes due at his death
Interested in alternatives but wants both net income and asset preservation and investment guarantees
Solution:
Empire Life GIC and critical illness
Here’s William’s situation:
He is in a high tax bracket and is concerned about overall level of income taxes, claw backs, and reductions in net income tested benefits such as Old Age Security.
Despite their good health, Williams is worried about the potential of extra expenses in the event of a critical illness (personally or his spouse, Dana) and/or taxes due at the time of his death.
William’s open to ideas but wants both net income and asset preservation and income guarantees.
Williams advisor recommends Empire Life’s insurance-based Guaranteed Interest Contract and critical illness coverage.

22. Ageless Investing: Spousal Income Splitting
Advantages of this structure:
GIC - variety of terms – redeemable5 - no penalty on early payout at death
Interest income qualifies as eligible pension income and for a pension tax credit of $2,000
Lowers William’s reportable income and net income
William can name a beneficiary for probate-free transfer and a private transfer of estate assets
Tax savings fund critical illness coverage and/or life insurance to pay taxes on death
And the advantages of this arrangement:
Empire Life GICs come in a variety of terms and are redeemable, subject of course to Market Value Adjustment should interest rates remain the same or increase. There is no penalty on early payout at death
Interest income qualifies as eligible pension income and qualifies for a pension tax credit of $2,000. Also, with the spousal pension income splitting rules, this income can be shared with his wife thereby doubling use of the $2,000 pension credit (as Dana is also over age 65.) So between them they have up to $4,000 of accrued “annuity” interest earning eligible for pension credit.
Lowers reportable income and net income for William—the owner—reducing claw backs on Old Age Security and improving thresholds to get other net income tested benefits.
The drop in his reportable income may also lower his tax bracket and lower his overall income taxes payable.
He can name a beneficiary for probate free transfer on death and a private transfer of estate assets.
The tax savings can fund the critical illness coverage and/or life insurance to pay taxes on death

23. AGELESS INVESTING: Class Plus 3.0
FOR ADVISOR USE ONLY

24. 6 in 10 pre-retirees want guaranteed income for life.
According to a recent LIMRA survey of pre-retirees – that’s people within 15 years of retirement – discovered that 6 in 10 pre-retirees want guaranteed income for life. It was the number one feature they wanted in a financial product.
The survey also said they didn’t know how to obtain it. That’s no surprise as traditional secure retirement income sources are under pressure. And people don’t know how to replace the security of those incomes.
But with Class Plus 3.0, they can enjoy predictable income that is guaranteed for life.

25. Ageless Investing: Class Plus 3.0
Guaranteed retirement income for life6
Guaranteed 4% annual Income Base Bonus7
Lower Fees of 15 to 25 bps8
Unique LWA payout rates9 for each age
Income Base Reset automatically every 3 years
80% Equity Options
Highest equity available in guaranteed income product10
Fee For Service (FFS)
Available in Nominee held accounts
Class Plus 3.0 enhances customer value
Class Plus 3.0 is one of the few true GWB products in the marketplace. Guaranteed retirement income for life is what you clients want and with Class Plus 3.0 you can give them an income they cannot outlive. The income amount is guaranteed provided there are no Excess Withdrawals.
The 4% Income Base Bonus Rate is guaranteed, not variable, unlike some products out there. It is available in the first 20 years of the contract only.
We are pleased to offer lower insurance fees of 15 to 25 bps with Class Plus 3.0 compared to Class Plus 2.1
Unique LWA Payout Rates by Age - Higher immediate income at most ages, available from ages 55 to 80, 4% LWA at age 65, Maximum payout is 5.25% at age 80+
The Income Base Bonus resets automatically every 3 years, which locks in any market gains, and may increase client’s income
And we offer 80% equity options -– 80% is the highest equity exposure available in the GWB space based on our competitive review
A new Purchase Fee Option of Fee For Service - Available in Nominee held accounts
We believe that with the lower fees, the guaranteed Income Base Bonus and resets, and the selection of funds, Class Plus 3.0 enhances customer value.

26. Ageless Investing: Class Plus 3.0
Annual Automatic Income Resets
Available in Fast & Full Investment App
Retirement Income Privileges
75% Death Benefit and Maturity Benefit Guarantees3
Triennial Death Benefit Guarantee11 and Income Base Resets
Excess Withdrawal Alert service
There are additional CP3 .0 features that add value:
Annual Automatic Income Resets mean client’s income may be bumped up
Available in Fast & Full Investment App – Client Name only
Retirement Income Privileges let clients stop and resume their income without penalty
75% Death Benefit and Maturity Benefit Guarantees
Death Benefit Guarantee and Income Base reset automatically every 3 years to lock-in any market gains 
Excess Withdrawal Alert service to safeguard clients’ guaranteed income

27. Ageless Investing: Class Plus 3.0
Policy set-up:
Parent wishing to create a pension for an adult child
Non-registered policies
Older owner set up with younger annuitant/ successor owner
Resets, Income Base and Bonus Base based on annuitant
Child benefits from years of Bonus growth
Class Plus 3.0 can be used in situations where the parent wishing to create a pension for an adult child or dependent child
This concept is specific to non-registered policies
The older owner would set it up with the child as the younger annuitant and successor owner
Resets, Income Base and Bonus Base based on annuitant
The child benefits from years of Bonus growth, even if another deposit is never made beyond the initial deposit

28. AGELESS INVESTING: THE EMPIRE LIFE ADVANTAGE
Last but not least, I’ll discuss the Empire Life advantage, which is the foundation of everything we do.
FOR ADVISOR USE ONLY

29. Empire Life: A company you can trust
Helping Canadians meet their financial needs since 1923
Empire Life is among the top 10 life insurance companies in Canada12 and rated A (Excellent) by A.M. Best13
Managing segregated funds for over 50 years
Committed to GWB since 2008
Follows value-oriented, disciplined investment style, with strong emphasis on providing downside protection to build wealth
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30. 1 Subject to applicable taxation and surrender fee schedules 2 100% Death Benefit Guarantee if policy issued before Annuitant’s 80th birthday, otherwise 75% of deposits guaranteed 3 Death and Maturity Guarantees are reduced proportionally by withdrawals 4 Empire Life may change the reset feature at any time without providing notice and may cancel the reset feature at any time by providing 60 days notice to the policy owner 5 Withdrawals prior to maturity subject to MVA 6 Provided there are no Excess Withdrawals 7 The Income Base Bonus is credited in years that there are no withdrawals from Class Plus 3.0. for the first 20 calendar years you own Class Plus 3.0. It is a notional amount and has no cash value. 8 Compared to Empire Life Class Plus Available from ages 55 to 80. Calculated based on the current Income Base and the applicable LWA percentage that corresponds to the Annuitant’s age as of December 31st of the following calendar year 10 Empire Life Competitive Review. October Up to and including Annuitant’s 80th birthday 12 Based on general fund and segregated fund assets in Canada as at December 31, 2016 as reported in regulatory filings 13 As at June 1, 2017

31. FOR ADVISOR USE ONLY
Important Notes
Past Performance is no guarantee of future performance.
This presentation reflects the views of Empire Life as of the date presented. The information in this presentation is for general information purposes only and is not to be construed as providing legal, tax, financial or professional advice. The Empire Life Insurance Company assumes no responsibility for any reliance made on or misuse or omissions of the information contained in this presentation. Please seek professional advice before making any decision.
A description of the key features of the individual variable insurance contract is contained in the Information Folder for the product being considered. Any amount that is allocated to a segregated fund is invested at the risk of the contract owner and may increase or decrease in value.
® Registered trademark of The Empire Life Insurance Company. Policies are issued by The Empire Life Insurance Company.
October 2017