From - 01/06/2015 Global Insurance Solutions Inc. March 29, 2006.

From - 21/04/23

Global Insurance Solutions Inc.

March 29, 2006

Paul Freedman MBA, CFP

[email protected]

416-721-4931(cell)

mailto:[email protected]

Stir the Pot - Cook Up New Sales

Agenda

Using Total Needs Analyses Software Uncover Needs Prepare for Compliance

Stir the Money Pot – Three Selling Ideas CI to Protect RRSPs Quick Pay Mortgage and UL Guaranteed Pay – Alternative to RRSP

AXA Marketing Initiatives - 2006

Why use a needs analysis tool?

Uncover additional needs

Professionalism

Compliance trends Quebec Agent disclosure Conflict disclosure

Increases compensation

Common problems with needs analysis tools

Overly complex

Time consuming

Stand alone tool not integrated into quote system

Multiple pages

Changes cost money – print, print, print

AXA Needs Analysis

Built into the AXA software

Accurate

Comprehensive

Easy to use

One page snapshot of assets and liabilities

Professional appearance

Launch pad for AXA life quotes

Needs Analysis – Discovery

First meeting objective: Determine the amount of coverage required

Assets and liabilities

Existing insurance coverage

Goals and objectives

Don’t forget the “Soft’ questions – feeling & finding

Needs Analysis - The report

One page snap shot

Net worth statement

Defines the need

Stirring the Pot….

Total Needs Analyses highlights weaknesses in planning

Clients often accept need for insurance – just do not want to pay for it (or feel they can not afford it)

Needs Analyses highlights spending patterns

Stir the Pot – take existing monies and re-allocate to achieve same goals while providing additional flexibility

Critical Illness Insurance & RRSPs

If a critical illness strikes……

RRSPs designed for retirement use but often client’s only savings

Fully taxable upon withdrawal – not efficient use of savings

Long term financial plans based on compounding of growth i.e. time money is invested

Restoring savings likely to be difficult


Solution: Contribute less to RRSP and purchase CI with ROP benefit

Ensures that RRSP remains intact in event of Critical Illness

More funds available to effectively deal with critical Illness

“Redirecting” savings will have minimal effect on retirement income


Facts

Husband and wife, aged 40 and 38

Family income of $75,000 annually

Husband works full-time; wife part-time

2 children, own home

RRSP total savings currently of $20,000 and plan to contribute $3,000 per year to retire at 65


Alternate Strategy

“Re-direct money” into CI to protect savings and provide funds in the event of a critical illness

Buy $25,000 CI with ROP on husband Cost - $476 annually*

* AXA T-75 Enhanced CI plan with FROP


Continue as is: By age 69, RRSPs grow to $341,127*

Redirect monies to CI policy: RRSP grows to $302,210* ROP of $14,295 Total savings = $316,505

In first year of RRIF, $24,622 difference represents approx. $100 per month, before taxes

* 6% annual compounded growth


If illness strikes and RRSP savings used, RRSP only grows to $226,256 at age 70

Monthly income difference in excess of $358 per month

CI monthly payment results in minimal income drop yet ensures retirement income plan stays in place

If death occurs, CI premiums refunded


Use proposed RRSP $$$ to buy CI

Client does not have to look for “new” money

Keeps retirement plans in place

Provides more money if critical illness occurs (CI proceeds not taxable) AND reduces stress about future

Minimal affect on retirement income

Have insured client at “no cost”

Quick Pay Mortgage and Universal Life

General wisdom is to pay home off quickly….

Accelerated weekly payments reduces cash flow

Families often do without financial necessities

Disability income replacement Emergency funds Permanent life insurance


Solution: Make monthly mortgage payments and purchase Universal Life Insurance

Cash build up inside plan provides income in case of need

Mortgage can still be retired at desired date

Financial flexibility if circumstances change (for better or worse)

Increased life insurance protection, including paid up permanent protection


Facts

Husband age 42; wife age 40

Jointly owned mortgage of $250,000

Pay $416 per week* ($1,805 per month)

Bank mortgage insurance costs $105 per month

May inherit from parents in 20 – 30 years

No savings other than RRSPs* 6.45% 5 yr. term; 25 yr ammort.;


Alternate Strategy

Purchase $25,000 Universal Life Insurance on wife

Add T-20 riders: $250,000 on him; $225,000 on her

Pay mortgage monthly - $1,667 per month

Fund UL with difference in mortgage and insurance costs

Pay off mortgage fully in 20 years, if desired


Continue as is….

Mortgage will be paid in full in 21 years (4 years earlier than if paid monthly)

No permanent life insurance

Declining life insurance coverage; no ability to convert; not transportable

No emergency fund

Only savings in RRSP


Re-allocate $244 per month (difference in weekly/monthly mtge. costs) to UL*

Flexibility now to withdraw cash in event of disability, job loss, education needs or other unforeseen needs

Enhanced life insurance protection: Term riders with level, convertible

coverage Permanent coverage

*40 FNS,Pact II, T-100, 6%ROI


Accelerated payments - mortgage retired at end of year 21

Monthly mortgage schedule - $70,546 owing at end of year 21

UL Fund Value – est. $71,572 at end of year 21

Taxes on Fund – approx. $14,000, if owner still working


Mortgage retired on schedule, no increase in monthly family expenses

Couple has minimum of $500,000 of life protection throughout period, all of which can be made permanent if desired

Cash available for emergencies from year 1

Estate planning already in place if circumstances change (Inheritance? New job?)

Works well increasing rate environment

Limited Pay Insurance and RRSPs

RRSPs great …. Tax-Deferred Growth Annual Tax Reductions

But can be too much of a good thing.… Access to money limited – no flexibility $$$ taken into income – could affect

OAS; income tax rate Taxes have to be paid - at death, estate

reduced significantly


Solution: Reduce or stop RRSP contributions and purchase high cash value, limited pay guaranteed life insurance

Retirement income unaffected

Enhanced flexibility in using retirement income

Estate planning solidified


Facts

50 yr. old female – current RRSP valued at $250,000

Contributes $10,000 annually into her RRSP

RRSP to be primary source of retirement income

Would like to leave a legacy


Alternate Strategy

Use “usual” RRSP contributions to purchase limited pay life insurance with guaranteed cash values

Stop future contributions to RRSP Leave existing RRSPs to compound Purchase $300,000 limited pay Horizon

65 at $6,700 per year


Continue as is: Base RRSP grows to $801,784* @ age 70 New contributions add additional

$238,998 @ age 65*

Purchase $300,000 Horizon 65 using equivalent of net proceeds of RRSP contributions ($6,700/yr.)

Guaranteed CSV @ age 65 = $150,000

6% return compounded annually


Access to cash in policy flexible:

Borrow – proceeds tax-free; capitalize costs

Leverage – structure deal with lender; proceeds tax-free

Withdraw – net approx. $137,471*

- insurance lapses

Only last option affects income

*Assume 30% tax rate, based on ACB


Access to RRSP monies limited Monies can only be brought into income at

marginal rate Contributions for 15 years = $238,998 Taken as lump sum at age 65, proceeds

would net approx. $131,449* Loss of OAS

*Assume 45% tax rate


At some point, RRSP represents major tax liability

Guaranteed pay insurance provides flexibility in planning; no loss in retirement income

OAS will not be affected

Bonus - $300,000 of Life Insurance fully paid at age 65

EDB to age 60

Summary

Comprehensive, written Needs Analysis provides Professional assessment of client’s position using THEIR numbers

Highlights total current financial situation

Exposes both short term and long term needs

Summary

Insurance products enable client to:

Achieve financial and life-style goals Provide greater security Introduce flexibility into family budget

All the above, at no additional “cost” to the client

Win – Win

From - 21/04/23

2006 Sales and Marketing Initiatives

AXA LAUNCHES IT’S BUSINESS BUILDING PROGRAM FOR

BROKERSTO HELP YOU BUILD A MORE

PROFITABLE BUSINESS IN 2006 AND BEYOND

Sales and Marketing

Business Building Program - 2006

BEST Program - Life

BEST Program - Living Benefits

Activity Incentives

Productivity Rewards

Conference 2007

Achieve your goals!!!

Sales and Marketing

Business Building Program - 2006

Sales and Marketing

Broker Education Sales Training - LIFE

8 week classroom program; No cost to broker Sales development - Prospecting, referrals,

seminars Total needs selling - Fact finding, Probing;

Wills/PA’s Closing the sale - Positioning, objections, role

playing Selling concepts – Needs, not products Product discussions - Whole life, Term, UL Case study - Family, business, single need

Contact your MGA more information about BEST

Sales and Marketing

Broker Education Sales Training-LIVING BENEFITS

Industry leading faculty (Munich Re, Dr.’s, consultants etc.)

3 day, 2 night seminar program

The living benefits market and uncovering needs The role of Wills and Living PA’s Placing your case: Underwriting living benefits Product discussions - guaranteed vs non

guaranteed premiums Sales concepts - keyperson, buy/sell, family, single

need By invitation; must have sold an AXA living benefit

product

Sales and Marketing

Activity Program

Incentives for Submitting UL, Term, CI, LifeBeat, A&S and Mortgage applications

$100 upon submitting first 3 applications

$50 for EVERY application there after

Program starts Feb 15th and closes June 30th, 2006

Rewards paid at the end of April and end of June; money will be directly deposited to your bank account

SUBMITTED APPLICATIONS

Sales and Marketing

Productivity Program

In addition to usual FYC and bonus:

Additional Reward based on net FYC $5,000 - $500 $10,000 - $1,000 $15,000 - $1,500 $20,000 and over - $2,000 $25,000 – conference qualifier and

$2,000

Paid in January 2007, deposited directly to your bank account

Sales and Marketing

2007 Sales Conference

$25,000 Net First Year Commissions

10 Applications

Past conference locations Mexico-March 2006 North Africa-2005 Dominican Republic-2004 Cuba-2003

Settled business from January 1st, 2006 until December 8th, 2006

Sales and Marketing

To Help You Achieve Your Goals

50% FYC plus bonus on T-10, T-20 and T-70

Extreme Disability Benefit at no additional cost

T-10 Indexed: option to double face amount included at no Extra cost!

CI $100,000 offer included with issued Preferred T-10

New Investment Options on UL

55% FYC on LifeBeat

Thank You

Paul Freedman MBA, CFP

[email protected]

416-721-4931(cell)

mailto:[email protected]

From - 01/06/2015 Global Insurance Solutions Inc. March 29, 2006.

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Transcript of From - 01/06/2015 Global Insurance Solutions Inc. March 29, 2006.