1 A PARTNER YOU CAN TRUST. How do you cover overhead expenses in case of disability?

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A PARTNER YOU CAN TRUST.

How do you cover overhead How do you cover overhead expenses in case of expenses in case of disability?disability?

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Agenda

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Target market

Votre partenaire de confiance.

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Target market

> Self-employed workers

> Registered> Incorporated> Who must incur expenses in the exercise of their

profession

> Microentreprises

> Limited number of employees

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Target market

> Context

> Shareholder/owner must be active> Impact of the insured person on

> Company operations> Financial support provided> Company income

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Target market

> Example: a bakery

> 1 artisan baker> Some counter clerks> A delivery person

> If the artisan baker is disabled

> No production> No sales> No income

> Insured overhead expenses are payable

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Target market

> Example: a bakery

> 1 artisan baker> 2 assistant bakers> Some counter clerks> A delivery person

> If the artisan baker becomes disabled

> Nearly normal production> No reduction of income

> Insured overhead expenses are not payable

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Target market

> Other examples of microentreprises

> Professional firms> Financial security advisors> Real estate agents

> Graphic designers> Truck drivers

9Votre partenaire de confiance.

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Definition of overhead expenses

> A company or a self-employed worker has expenses to produce an income

> Fixed and recurring expenses

> Financial obligations

> Lease> Equipment rental, etc.

> Necessary expenses for functioning of office or business

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Covered overhead expenses

> Covers normal office expenses such as:

> Rent > Heat, electricity and cleaning > Telephone and Internet> Equipment rental and depreciation> Employee salaries (maximum 3)> Insurance premiums> Accounting services> Advertising fees

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Definition of covered overhead expenses

> Covers normal office expenses such as:

> Interest on business loans> Registration fees for professional associations> Other normal fixed and recurring expenses for proper

functioning of the office

> In proportion to the shares held

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Rent – at home

> Based on number of square feet used

> Eligible expenses

> $25 per sq. ft. per year

> Example:

> Occupation of 200 sq. ft. in residence for business> 200 x 25 = 5,000 divided by 12 = $417 per month

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Rent – outside of home

> Lessor

> Rent paid

> Owner

> Business taxes> Property tax> Interest on mortgage

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Non-eligible overhead expenses

> Principal insured’s salary during disability

> Disability insurance

> Any other person hired to replace the principal insured during disability

> Costs for goods, property, equipment, supplies, accessories, merchandise and devices

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Overhead expenses for automobiles

> Automobile must be essential to conduct work

> Expenses covered:

> Rental or interest and depreciation for a purchase

> Insurance> Registration > Driver’s licence

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Overhead expenses for automobiles

> Non-covered expenses:

> All fuel (gasoline, diesel, etc.)> All vehicle maintenance> Travel costs

> As a percentage of use for professional activities

> Tax returns or financial statements

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Practical advice

> Separate contract for

> Disability insurance> Overhead expenses

> Lessee, payor and beneficiary = Company

> Creditor insurance> Lessee, payor and beneficiary = Company

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Limitations

> As with disability insurance, it’s for insureds with the following characteristics:

> Employment categories 3A and 4A> With stable employment for at least two years> With a certain degree of expertise> Work up to 75% of time at home

> Minimum 60-day waiting period

> Work more than 75% of time at home> Minimum 90-day waiting period

20A partner you can trust.

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Needs analysis

> Documents necessary for analysis

> For a self-employed worker working at home> Income tax return> Personal budget

> For a microentreprise> Financial statement> Record of wages

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Needs analysis – general

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Needs analysis for farms

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Needs analysis for truck owners

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Needs analysis

> Available on Pyramide

> Available on EXCEL spreadsheet

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Solutions offered by ExcellenceSolutions offered by Excellence

Votre partenaire de confiance.

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Solutions offered by Excellence

> Universal coverage 24/7

> At work> At home> When practicing sports

> Non-taxable monthly benefits

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> Superior Program

> Accxel

> Acci-Jet

> Guaranteed issue

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Superior Program

> Eligibility

> Between age 18 and 59> Exercise gainful employment

> At least 8 months per year> At least 21 hours per week (1050 hours per year)

> Meet selection criteria> Be a Canadian citizen or live in Canada for more

than six months and meet certain conditions

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Acci-Jet

> Eligibility

> Between age 18 and 59> Exercise gainful employment

> At least 8 months per year> 21 hours per week (735 hours per year)

> Meet selection criteria> Be a Canadian citizen or live in Canada for more


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Accxel

> Eligibility

> Between age 18 and 59> No criteria for exercising gainful employment> Meet selection criteria> Be a Canadian citizen or live in Canada for more


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> Duration of benefits

> 24 months

> Waiting period

> 30 days > 30 days or more

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Benefits

Superior Program

Acci-Jet Accxel

Minimum $500 $500 $300

Maximum $6,000 $6,000 $3,000

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Type of coverage Superior Program

Acci-Jet Accxel

In case of illness and accident yes no yes

In case of accident only yes yes no

For muscle and ligament injuries yes yes yes

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> For the Superior Program and Acci-Jet

> Pricing based on risk of insured’s regular occupation> Occupations with a lower risk of disability

> Better rates

> List of occupations available in sales software

> No distinction by employment category for Accxel

Employment category

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> Employment category guarantee

> No changes after contract is issued> Limitations and exclusions are applicable for the

employment category at time of disability

Employment category

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> Available at all times

> Advantages:

> Decreases amount of premiums

> Criteria:

> Work outside of home 50% of time> Minimum 3 years experience with the same company> In charge of 5 employees or 5 years of experience> Income:

> $60,000 for 3A to 4A, otherwise $35,000

Upgrade of employment category (Superior Program only)

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Upgrade of employment category

> Not available for:

> Drivers> Fishermen> Daycare educators> Farm owners> Forest industry workers

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Premiums

> Two options:

> Level premiums until end of contract> Level premiums for successive 5-year periods

> Guaranteed renewal

> Premiums are not guaranteed

> Option to adjust premiums based on experience

> Waiver of premiums included

> Disability before age 60

> Deductible for income tax (expenses/business)

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Commissions – Superior Program

> Base

> First-year commissions are recoverable for 12 months

> Accelerated


1st year 50%

Renewal 15%

1st year 100%

Renewal 2.5%

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Commissions – Acci-Jet

> Basic


> Accelerated


1st year 45%

Renewal 12.5%

1st year 75%

Renewal 2.5%

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Commissions – Accxel

> Basic


1st year 50%

Renewal 17%

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Case studiesCase studies

A partner you can trust.

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Case #1

> Registered financial security advisor working alone at home

> Needs analysis

> Income tax return> Personal budget

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Case #1: Needs analysis – Business overhead expenses

> Registered financial security advisor working alone at home

Rent – at home

Total area in sq. ft. Allocation Monthly

Occupied space at $25/sq. ft. 2,000 10% $416.67

Rent – outside of home

Business condo Cost Frequency Allocation Monthly

Rent OR

Interest on mortgage A 100% -

Property and municipal taxes A 100% -

Business taxes A 100% -

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> Registered financial security advisor working at home

Overhead expenses Cost Frequency Allocation Monthly

Salaries (if less than 3 employees)

- Total $50,000

- Owners/associates $50,000

- Eligible - A 100% -

Electricity (outside of home) - M 100% -

Telephone

- Home/office $52 M 70% $36.40

- Cellphone $75 M 100% $75.00

Internet $50 M 70% $35.00

Insurance premiums

- Home/office $378 A 10% $3.15

- Professional liability $789 A 100% $65.75

Maintenance $1,500 A 10% $12.50

Accounting services $200 A 100% $16.67

Licence fee $225 A 100% $18.75

Depreciation of material $500 A 100% $41.67

Professional association - 100% -

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> Registered financial security advisor working at home

Automobile expenses

Cost Frequency Allocation Monthly

Purchase of vehicles

- Depreciation $

- Interest on loans $

Rental of vehicles $750 M 70% $525.00

Auto insurance $825 A 70% $48.13

Registration and driver’s licence $273 A 70% $15.93

TOTAL

Rent - at home $416.67

Rent – outside of home -

Overhead expenses $304.88

Automobile expenses $589.05

GRAND TOTAL $1,310.60

NECESSARY COVERAGE $1,300.00

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Case #2

> Incorporated financial security advisor who works in his firm outside his home with 2 assistants

> Needs analysis

> Financial statement> Record of wages

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> Incorporated financial security advisor working outside of home with 2 assistants

Rent - at home


Occupied space at $25/sq. ft. - 0% -

Rent - outside of home

Business condo Cost Frequency Allocation Monthly

Rent OR

Interest on mortgage $7,500 A 100% $625.00

Property and municipal taxes $5,500 A 100% $458.33

Business taxes $500 A 100% $41.67

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Salaries (3 employees or less)

- Total $140,000


- Eligible $75,000 A 100% $6,250.00

Electricity (outside of home) $225 M 100% $225.00

Telephone

- Home/office $125 M 100% $125.00

- Cellphone $100 M 100% $100.00

Internet $75 M 100% $75.00

Insurance premiums

- Home/office $759 A 100% $63.25


Maintenance $125 M 100% $125.00

Accounting services $3,000 A 100% $250.00

Licence fee $225 A 100% $18.75

Depreciation of material $2,000 A 100% $166.67

Professional association $250 A 100% $20.83

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Automobile expenses



- Depreciation $10,000 A 70% $583.33

- Interest on loans $3,000 A 70% $175.00

Rental of vehicles - M 70% -


Registration and driver’s licence $273 A 70% $15.93

TOTAL

Rent - at home -

Rent – outside of home $1,125.00

Overhead expenses $7,485.25

Automobile expenses $822.38


NECESSARY COVERAGE PER ASSOCIATE $9,400.00

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Case #3

> Unincorporated trucker working alone

> Needs analysis

> Income tax return> Personal budget

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Rent - at home




Garage Cost Frequency Allocation Monthly

Rent OR

Interest on mortgage $1,200 A 10% $100.00

Property and municipal taxes $3,500 A 10% $29.17

Business taxes - A 100% -

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- Total $75,000




Telephone

- Home/office $25 M 100% $25.00

- Cellphone $100 M 100% $100.00

Internet - M 100% -

Insurance premiums

- Home/office $759 A 10% $633


Maintenance - M 100% -

Accounting services $250 A 100% $20.83

Licence fee $375 A 100% $31.25

Depreciation of material - A 100% -

Professional association $250 A 100% $20.83

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Automobile expenses



- Depreciation $17,500 A 100% $1,458.33

- Interest on loans $10,500 A 100% $875.00

Rental of vehicles - M 100% -


Registration $273 A 100% $22.75

TOTAL

Rent - at home -

Rent – outside of home $129.17

Overhead expenses $289.73

Automobile expenses $2,424.83


NECESSARY COVERAGE PER ASSOCIATE $2,800.00

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Case #4

> Microentreprise

> 3 partners (1/3, 1/3 and 1/3)> 4 employees

> Needs analysis

> Financial statements

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> Microentreprise with 3 partners and 4 employees

Rent - at home




Office Cost Frequency Allocation Monthly

Rent OR $2,500 M 100% $2,500.00

Interest on mortgage - A 10% -

Property and municipal taxes - A 10% -

Business taxes - A 100% -

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> Microentreprise with 3 partners and 4 employees



- Total

- Owners/partners



Telephone

- Home/office $225 M 100% $225.00

- Cellphone $300 M 100% $300.00

Internet $275 M 100% $275.00

Insurance premiums

- Home/office $250 A 100% $20.83

- Professional liability $4,000 A 100% $333.33

Maintenance $250 M 100% $250.00

Accounting services $6,000 A 100% $500.00

Licence fee - A 100% -

Depreciation of material $5,000 A 100% $416.67

Professional association $2,500 A 100% $208.33

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> Microentreprise with 3 partners and 4 employeesAutomobile expenses



- Depreciation - A 100% -

- Interest on loans - A 100% -

Rental of vehicles $3,000 M 70% $2,100.00

Auto insurance $2,450 A 70% $142.92

Registration $819 A 70% $47.78

TOTAL

Rent - at home -

Rent – outside of home $2,500.00

Overhead expenses $2,904.17

Automobile expenses $2,290.69


NECESSARY COVERAGE PER ASSOCIATE 2 500,00

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Questions?

1 A PARTNER YOU CAN TRUST. How do you cover overhead expenses in case of disability?

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