Global insurance solutions inc march 29 2006
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Global Insurance Solutions Inc. March 29, 2006. Paul Freedman MBA, CFP [email protected] 416-721-4931(cell). 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

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Global Insurance Solutions Inc. March 29, 2006

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Global insurance solutions inc march 29 2006

Global Insurance Solutions Inc.March 29, 2006


Paul freedman mba cfp paul freedman@axa insurance ca 416 721 4931 cell

Paul Freedman MBA, CFP

[email protected]

416-721-4931(cell)


Global insurance solutions inc march 29 2006

Stir the Pot - Cook Up New Sales


Agenda

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

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

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

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

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

Needs Analysis - The report

  • One page snap shot

  • Net worth statement

  • Defines the need


Stirring the pot

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

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


Critical illness insurance rrsps1

Critical Illness Insurance & RRSPs

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


Critical illness insurance rrsps2

Critical Illness Insurance & RRSPs

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


Critical illness insurance rrsps3

Critical Illness Insurance & RRSPs

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


Critical illness insurance rrsps4

Critical Illness Insurance & RRSPs

  • 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


Critical illness insurance rrsps5

Critical Illness Insurance & RRSPs

  • 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


Critical illness insurance rrsps6

Critical Illness Insurance & RRSPs

  • 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

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


Quick pay mortgage and universal life1

Quick Pay Mortgage and Universal Life

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


Quick pay mortgage and universal life2

Quick Pay Mortgage and Universal Life

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.;


Quick pay mortgage and universal life3

Quick Pay Mortgage and Universal Life

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


Quick pay mortgage and universal life4

Quick Pay Mortgage and Universal Life

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


Quick pay mortgage and universal life5

Quick Pay Mortgage and Universal Life

  • 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


Quick pay mortgage and universal life6

Quick Pay Mortgage and Universal Life

  • 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


Quick pay mortgage and universal life7

Quick Pay Mortgage and Universal Life

  • 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

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


Limited pay insurance and rrsps1

Limited Pay Insurance and RRSPs

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


Limited pay insurance and rrsps2

Limited Pay Insurance and RRSPs

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


Limited pay insurance and rrsps3

Limited Pay Insurance and RRSPs

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


Limited pay insurance and rrsps4

Limited Pay Insurance and RRSPs

  • 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


Limited pay insurance and rrsps5

Limited Pay Insurance and RRSPs

  • 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


Limited pay insurance and rrsps6

Limited Pay Insurance and RRSPs

  • 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


Limited pay insurance and rrsps7

Limited Pay Insurance and RRSPs

  • 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

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


Summary1

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


2006 sales and marketing initiatives

2006 Sales and Marketing Initiatives


Sales and marketing business building program 2006

Sales and MarketingBusiness Building Program - 2006

AXA LAUNCHES IT’S BUSINESS BUILDING PROGRAM FOR BROKERS

TO HELP YOU BUILD A MORE PROFITABLE BUSINESS IN 2006 AND BEYOND


Sales and marketing business building program 20061

Sales and MarketingBusiness Building Program - 2006

  • BEST Program - Life

  • BEST Program - Living Benefits

  • Activity Incentives

  • Productivity Rewards

  • Conference 2007

  • Achieve your goals!!!


Sales and marketing b roker e ducation s ales t raining life

Sales and MarketingBroker 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 b roker e ducation s ales t raining living benefits

Sales and MarketingBroker 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

Sales and MarketingActivity 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

Sales and MarketingProductivity 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

Sales and Marketing2007 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

Sales and MarketingTo 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


Paul freedman mba cfp paul freedman@axa insurance ca 416 721 4931 cell1

Paul Freedman MBA, CFP

[email protected]

416-721-4931(cell)

Thank You


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