Life Insurance Made Easy
Simplified Issue Products
Agenda
• Canadian Life Insurance
Market
• Simplified Issue Products
– What is it and for whom?
– Underwriting
– Purpose
• Insurance Needs Covered
– Funeral and final expenses
– Probate fees
– Income tax surprises
• Your Business
• Golden Protection
• Golden Protection Plus
Canadians Underinsured
•
Almost HALF of Canadian households (6 million) admit they would have immediate
trouble meeting expenses if a wage earner died.
•
Not only are they underinsured … They Know It !!!
Source: LIMRA
•
About 2 in 10 households have NO life insurance at
all.
•
Of those that have coverage over 30% believe they
need additional coverage.
•
Only 23 percent of all households had an
opportunity to buy through a personal meeting with
a life agent .
Many Options
Term Insurance
Mortgage Insurance
How do simplified issue products fit in the picture?
Participating Insurance
Universal Life Insurance
Whole Life Insurance
What is it?
• Does not require a medical exam, blood test, fluid
samples or doctor’s report.
• Easier to qualify for this type of life insurance than
for traditional insurance.
• One of the fastest ways to get life insurance because
of the simplified issue process.
Who is it for?
• People…
– with certain issues that may cause a premium to be
rated or a refusal on a traditional life insurance; or
– who genuinely dislike needles or any type of medical
exam; or
– looking for a simple and fast process to get life
insurance; or
– who don’t want the value of their estate diminished by
funeral costs and other final expenses; or
– who want the tax-free death benefit to be paid quickly.
Addressing Procrastination
• Many Canadians put off buying insurance because
they anticipate a difficult process, thinking it’s
complex and confusing.1
• Simplified issue products are:
–easy to understand;
–easy to apply for.
1. Source: Billion Dollar Baby - The Sales Potential of the Underinsured Life Market in Canada (2007), LIMRA
Underwriting
• With simplified issue products like Golden Protection,
the questionnaire on the application represents the
underwriting process.
• If all the answers to the questions are “no”, the client
is insurable.
• Clients don’t have to wait for weeks before finding out
whether they’re insured or not.
• No premium rating.
Underwriting Issues
Some of the elements that make it hard for people to
get insurance:
• Height and weight
restrictions
• Diabetes
• DUI / Driving record
• Drug or alcohol abuse
•
•
•
•
•
Depression / Anxiety
MS / Parkinsons
High blood pressure
High cholesterol
Family health history
Who do you know are affected by one or more of these issues?
A simplified issue life insurance like Golden Protection could be
the solution for them.
What about cost?
• Premiums for a simplified issue life insurance are
higher than those of a traditional whole life policy
issued at the regular rate.
• This is due to the higher risk taken by the insurance
company on this type of product.
• However, premiums for a simplified issue product
may be lower than you think!
Cost Example
Annual premium for $25,000 face amount for 60 yearold male non-smoker
*Lowest premium in LifeGuide Sept. 2012 edition for the WL/Guaranteed Life Pay category.
Cost Example
Annual premium for $25,000 face amount for 60 yearold male non-smoker
*5th lowest premium in LifeGuide Sept. 2012 edition for the WL/Guaranteed Life Pay category.
Cost Example
Annual premium for $25,000 face amount for 60 yearold female non-smoker
*Lowest premium in LifeGuide Sept. 2012 edition for the WL/Guaranteed Life Pay category.
Cost Example
Annual premium for $25,000 face amount for 60 yearold female non-smoker
* 5th lowest premium in LifeGuide Sept. 2012 edition for the WL/Guaranteed Life Pay category.
What is it for?
• Due to the simple underwriting process, face amounts
available are lower than traditional products.
• Mostly used to cover funeral costs and other final
expenses.
• They can also be used to:
– Cover small debts;
– Grow the estate to be passed on to loved-ones;
– Give to a charitable organization.
Funeral Cost
 According to the Board of Funeral Services, the
average cost of a funeral is around $5,500.
 If you add up the flowers, reception, and casket that
cost goes up to $9,000-$10,000 on average.
 The government pays a maximum lump sum death
benefit of $2,500. In some cases, it will be less.
Final Expenses
• Can include:
– Probate fees (based on estate
value, varies by province and territory)
– Other legal fees
– Accounting fees
– Executor compensation
– Income taxes
Probate Fees in Canada
Value of Estates
Probate Fees
British
Columbia
$0 to $25,000
$25,001 to $50,000
$50,001 or more
$0
$208 + 0.6% of value in excess of $25,000
$358 + 1.4% of value in excess of $50,000
Alberta
$0 to $10,000
$10,001 to $25,000
$25,001 to $125,000
$125,001 to $250,000
$250,001 or more
$25
$100
$200
$300
$400 Maximum
Saskatchewan
Any amount
0.7% of estate value
Manitoba
$0 to $10,000
$10,001 or more
$70
$70 + 0.7% of value in excess of $10,000
Source: Financial Advisor’s Pocket Reference 2011-2012, CCH
Probate Fees in Canada
Value of Estates
Probate Fees
Ontario
$0 to $50,000
$50,001 or more
0.5% of estate value
$250 + 1.5% of value in excess of $50,000
Québec
Any amount
N/A (court verification fee only for non-notarial
will)
New
Brunswick
$0 to $5,000
$5,001 to $10,000
$10,001 to $15,000
$15,001 to $20,000
$20,001 or more
$25
$50
$75
$100
0.5% of the estate value
Newfoundland
& Labrador
$0 to $1,000
$1,001 or more
$85
$85 + 0.5% of value in excess of $1,000
Source: Financial Advisor’s Pocket Reference 2011-2012, CCH
Probate Fees in Canada
Value of Estates
Probate Fees
Prince
Edward
Island
$0 to $10,000
$10,001 to $25,000
$25,001 to $50,000
$50,001 to $100,000
$100,001 or more
$50
$100
$200
$400
$400 + 0.4% of value in excess of $100,000
Nova Scotia
$0 to $10,000
$10,001 to $25,000
$25,001 to $50,000
$50,001 to $100,000
$100,001 or more
$77.00
$193.61
$322.31
$902.03
$902.03 + 1.523% of value in excess of $100,000
Source: Financial Advisor’s Pocket Reference 2011-2012, CCH
Probate Fees in Canada
Value of Estates
Probate Fees
Nunavut
$0 to $10,000
$10,001 to $25,000
$25,001 to $125,000
$125,001 to $250,000
$250,001 or more
$25
$100
$200
$300
$400
Northwest
Territories
$0 to $10,000
$10,001 to $25,000
$25,001 to $125,000
$125,001 to $250,000
$250,001 or more
$25
$100
$200
$300
$400
Yukon
$0 to $25,000
$25,001 or more
$0
$140
Source: Financial Advisor’s Pocket Reference 2011-2012, CCH
Income Tax Surprises
• Deemed disposition rule at death.
• Money in registered accounts is fully taxable.
• Half of capital gains on assets are taxable.
• No tax consequence if
assets are transferred to
spouse or spousal trust.
• Final return due April 30
of following year or 6
months after date of
death (later of the two).
Funeral Cost
Life
Insurance
Benefit
Final
Expenses
Preserve your client’s estate value for their loved-ones.
How does simplified issue
products fit in your business?
• Need is there.
• Easy to understand.
• Time efficient application process, issued quickly.
• Good way to generate steady cash flow.
Generate more business in less time
with Assumption Life
simplified issue products!
www.assumption.ca
Simplified life insurance solution for clients who
want peace of mind and NO MEDICAL EXAM
• Permanent life insurance guaranteed level premium
• No medical exam, no APS, no fluids or needles
• Guaranteed cash values and excellent paid up value
• Available for smokers and non-smokers
• Available as a policy or rider (spouse)
• Issued with limited proof of insurability
• Insurance amount doubles in case of accidental death
• In case of accidental death in a public transportation vehicle,
beneficiaries receive 5 times the original insurance amount.
• Issue ages
• 40 to 85
• Policy Face Amount
• $1,000 to $50,000
• Guaranteed cash value and guaranteed reduced paid-up
option after 3 years.
• Living benefit
– 50% of the sum insured in the event of a first-time occurrence of a
terminal illness
• Transportation benefit
– $2,000 payable when death occurs at a site over 200 km away from
primary residence
• Annual fee
– policy
– rider (spouse)
$60.00
$30.00
• Insurance coverage is immediate
• On-line application approved in 24-48 hrs
• FYC 45%
Deferred Option
• If your client has been declined for insurance within the past
2 years, they may still qualify for Golden Protection at the
same rates.
• Two-year waiting period for the death benefit for nonaccidental death.
• Accidental death benefit is immediate.
• FYC 35%
Same great features as Golden Protection
+
Simplified life insurance that allows participants
to increase their original coverage amount by 3%
annually – without increasing their premiums!*
*until the initial sum insured doubles or the insured’s attained age 100 on the coverage’s anniversary.
• Permanent life insurance for clients aged 40 to 80
• No medical exam, No Needles or Fluids, No APS
• Premiums and coverage that will never change
• Guaranteed cash value and paid up values
• Coverage amount from $1,000 to $30,000
• Same Great Compensation of FYC 45%
• Living benefits
–
50% of the sum insured in the event of a first-time occurrence of a
terminal illness
• Transportation benefits
–
$2,000 payable when death occurs at a site over 200 km away from
primary residence
• Annual fee
–
–
policy
rider (spouse)
$60,00
$30,00
• Guaranteed cash values and guaranteed paid-up
insurance
• Insurance coverage is immediate
• On-line application approved in 24-48 hrs
Comparative illustration: Sum insured
Male non smoker, 60 years old.
$10,000 face amount.
1st anniversary - $10,000
1st anniversary - $10,300
5th anniversary - $10,000
5th anniversary - $11,500
10th anniversary - $10,000
10th anniversary - $13,000
20th anniversary - $10,000
20th anniversary - $16,000
Comparative illustration: Premiums
Male non smoker, 60 years old.
$10,000 face amount.
Monthly: $44.13
Monthly: $58.01
Annually: $490.30
Annually: $644.60
Comparative illustration
Male non smoker, 60 years old.
$10,000 face amount.
• If we take the same $58.01 in monthly premiums that the Golden
Protection Plus client was paying for his initial $10,000 in coverage, and
use it to purchase a Golden Protection policy… this would give the client
$13,586 in coverage.
• However, with Golden Protection Plus, after the 12th policy anniversary…
the client would end up with more coverage with Golden Protection
Plus, since the $10,000 would then be $13,600.
Getting started with Assumption Life!
1 - Obtain a broker code:
Complete the Broker
Registration Form and send
to your MGA.
2 - You will receive an e-mail
from Assumption Life indicating
your username, password as
well as your broker code.
Lia Benefits
Reduces acquisition costs
Speeds up process and commission
payment
Increases efficiency for everyone (broker,
MGA and carrier)
Is a straight-through process – data enters
directly into our administration system
runs on almost any device*
Is leading edge in the industry
*Does not work on Lynux OS. Is not designed for smartphones.
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