THE COMBO APPROACH A Simple Way to Insure the Whole Family

1. THE COMBO APPROACH A Simple Way to Insure the Whole Family

2. Something to think about Do you have clients who’s untimely death would result in: • final expenses to their estate – funeral, estate administration, taxes, inheritance, etc.? • leaving debts behind? • diminished lifestyle for their immediate family? • jeopardizing goals such as kids’ education, retirement for surviving spouse, etc.? A majority of people will answer “yes” to one or more of the questions above. But covering financial needs with life insurance is not the only thing consumers are looking for…

3. What consumers are looking for Flexibility Guarantees Simplicity Additional Options

4. Building the solution • Guarantees, flexibilityand additional options are mostly product-related. Participating whole life encompasses these features. • Simplicity is as much about the processthan it is the product. • The easier it is for clients to understand why they have the insurance plan that was recommended to them, the better the chance they’ll stick with it. Simplicity Identify insurance needs. Categorize each need as permanent or temporary. Use a corresponding insurance coverage (permanent or term) for each need or group of needs. If possible, group the various coverages in one policy.

5. Building the solution for the wholefamily Insuring kids for their future financial security. Term Life for kids (with guaranteed insurability option) Debts (match insurance term with debt amortization) Term Life Rider with matching term Term Life Rider with matching term Protecting family lifestyle until retirement of surviving spouse Participating Whole Life Final expenses, donation, inheritance

6. Insurance solution for the whole family Guarantees • Guaranteed premiums – No surprises! • Guaranteed insurance amount – Just pay the premiums. • Cash surrender value, which can be used for: • Reduced paid-up option • Guarantee for a policy loan or collateral loan • Withdrawals upon surrender of part or all of the whole life insurance. • Guaranteed insurability for the kids (term life rider)

7. Insurance solution for the whole family Flexibility • Dividends • Increase the insurance amount – PUA; this helps reduce risk of inflation on final expenses or increase the value of inheritance. • More insurance for a lower premium with the Enhanced dividend option. • Use them for liquid savings or to reduce your premiums, or cash them. • Possibility to change dividend options as financial needs change. • Term life is renewable and convertible • If temporary insurance need lasts longer than expected (i.e. it takes longer to repay debts) or a new permanent insurance need arises, renewal and conversion options can help to address the issue.

8. Insurance solution for the whole family Additional Options • DI on participating or term life insurance to help cover loan payments or replace part of income in case of disability. • Term life insurance for the kids – guarantees their future insurability. • Waiver of premiums in case of disability or death.

9. Insurance solution for the whole family Simplicity • Simplified issue process for total insurance amount of $250k or less. • Same questions for whole life and term insurance (adults) • No investment decision required from the client. • Easy step-by-step electronic application. • Matching insurance type with needs helps clients better understand why they’re buying the insurance.

10. Understanding participating life insurance

11. Participating Life Insurance Dividends Greater performance! Projected returns Profits Underperforms Par Fund

12. Where do dividends come from? Par Fund “Pool” Interest rates Mortality Expense level Unit performance

13. participating whole life Mutualcompany vs public company Mutual Company 100% of the Par Fund profits go to the participating policy holders. They have ownership interest in the insurance company. Public Company A portion of the Par Fund profits goes to the shareholders instead of the policy holders. The shareholders are the owners of the company.

14. Did you know? • During 1999-2000, when many insurance companies demutualized: It is estimated that over $10 billion was handed out to 3 million participating life insurance policyholders, that is in addition to retaining their continuing life insurance coverage and policy cash values. • As a participating policyholder, you have an ownership interest in the mutual insurance company.

15. Dividend Options

16. Dividend options • Paid in Cash Option • Paid to the policyholder annually in cash / cheque 1 • Reduced Premium Option • Used to reduce the annual premium otherwise payable. 2

17. Cash & Reduced Premium option Reduce Your Annual Premiums (Tax-free) Cash back! Get your dividends paid-out. Whole Life Basic Insurance Total Initial Amount Death Benefit Time

18. Reduced Premium option Illustration based on Male, 35, NS, for $50,000 The projected dividends will coincide with the premium amount roughly after 30 years* * Dividend amounts are not guaranteed. The actual period at which premiums and dividends coincide may be more or less than 30 years.

19. Dividend options • Paid in Cash Option • Paid to the policyholder annually in cash / cheque 1 • Reduced Premium Option • Used to reduce the annual premium otherwise payable. 2 • Accumulation Option • Accumulate with interest as part of the policy (interest is taxable). 3

20. Accumulation option Interest on dividends is taxable. Dividends accumulate and gain interest! Total Initial Amount Whole Life Basic Insurance Death Benefit Time

21. Dividend options • Paid in Cash Option • Paid to the policyholder annually in cash / cheque 1 • Reduced Premium Option • Used to reduce the annual premium otherwise payable. 2 • Accumulated Option • Accumulate with interest as part of the policy. 3 • Paid-Up Additions Option • Used to purchase paid-up additions, which will exponentially increase the death benefit. 4

22. NO ADD’L UNDERWRITING IF CHOSEN AT PURCHASE Paid Up additions option Dividends buy more permanent life insurance every year! Total Initial Amount Paid-Up additions Death Benefit Whole Life Basic Insurance Time

23. Paid Up additions option: premiums vs. death benefit Illustration based on Male, 35, NS, for $50,000 At age 71, death benefit is double the original amount At age 86, death benefit is triple the original amount. * Dividend amounts are not guaranteed. The actual age at which the death benefit will be double and triple the initial insurance amount may be different.

24. Dividend options • Paid in Cash Option • Paid to the policyholder annually in cash / cheque 1 • Reduced Premium Option • Used to reduce the annual premium otherwise payable. 2 • Accumulated Option • Accumulate with interest as part of the policy. 3 • Paid-Up additions Option • Used to purchase paid-up additions, which will exponentially increase the death benefit. 4 • Enhanced Option • Used to purchase a combination of one-year term insurance and paid-up additions. • Under this option, the death benefit is equal to the sum of the basic insurance amount, • the paid-up additions and the one-year term insurance amount. 5

25. MUST BE SELECTED AT PURCHASE Enhanced option Term Insurance (T1) One-yearterm 15-year Guarantee Non-guaranteed Total Initial Amount Paid-up Additions Whole Life Basic Insurance Death Benefit Paid-up Additions Time

26. MUST BE SELECTED AT PURCHASE Enhanced option Term Insurance (T1) One-yearterm Guarantee to age 100 Non-guaranteed Total Initial Amount Paid-up Additions Paid-up Additions Whole Life Basic Insurance Death Benefit Time

27. Lower premiums with enhanced option Illustration based on Male, 35, NS, for $50,000 Notice the premiums for the enhanced option are much lower

28. Taxation of policy dividends Paid-Up Additions and Enhanced Options • Policy dividends under these two options are not taxable. Cash or Accumulation Options • If the dividend paid exceeds the policy’s adjusted cost basis (ACB), the excess amount will be fully taxable in the year it is paid. • For the Accumulation option, interest paid on the accumulated dividends is fully taxable. However, withdrawals made from the dividend account are not taxable. Premium Reduction Option • The portion of the dividend used to reduce the premium is not taxable. • Any excess dividend paid to the policyholder will be taxable if it exceeds the policy’s ACB in the year it is paid.

29. Changing your Dividend option

30. From Enhanced to another option • Under the enhanced option, combination of • Basic whole life insurance • Paid-up addition and one-year term bought with dividends • When changing from the enhanced option to another dividend option, the total insurance amount at the time of the change will be equal to the basic whole life + the paid-up insurance. Example • 35-year-old MNS takes a $100,000 policy with the enhanced option.

31. Permanent, whole life participating insurance

32. New riders • T-15, T-20 or T-25 Life Insurance • DI Rider available • Based on loan payment • Based on earned income • Renewable to age 80 • Convertible to ParPlus before age 65 • Term to age 25 for children • Guaranteed insurability option at age 25 • Living benefit in case of covered illness

33. ParPlus FEATUREs • Issue age: 18-75 • Online Product -no paper apps. • Guaranteed level premiums • Permanent, life-payor 20-pay whole life insurance • Coverage type: Single or Joint-first-to-die • Simplified issue available on ages 18-65 and amounts of $250,000 or less. (if all questions answered no and subject to MIB) • Basic insurance amounts: Min. $5,000 / Max: $4,000,000 • Policy fee: $80 (flat fee) • Riders: • FlexTerm (Term 15, 20 or 25 life insurancewith DI rider) • Youth Plus (Term-to-age-25 life insurance for kids, withguaranteedinsurability option) • Child Insurance Benefit –rider (CIB) • Accidental Death and Dismemberment (AD&D) • Waiver of Premiums upon Disability (WPI) • Waiver of Premiums uponDeath(WPD) • DisabilityIncomeavailable (loanpayment or earned income)

34. ParPlus FEATUREs Premium band: • 5-24K • 25-99K • 100-250K • More than 250K Dividend options: • Enhanced (15 year guarantee or guarantee to age 100) • Paid-Up Addition • Accumulation • Cash / Reduced premium

35. Permanent, whole life participating insurance

36. ParPlus junior FEATUREs • Issue age: 0-17 • Online Product (no paper app.) • Guaranteed level premiums • Permanent , 20-pay life insurance • Simplified issue available on amounts $250,000 or less.(If all questions answered no, subject to MIB) • Coverage type: Single • Coverage amounts: Min. $5,000 / Max: $4,000,000 • Policy fee: $80 • Riders: • FlexTerm (Term 15, 20 or 25 life insurancewith DI rider) • Youth Plus (Term-to-age-25 life insurance for kids, withguaranteedinsurability option) • Accidental Death and Dismemberment (AD&D) • Waiver of Premiums upon Disability (WPI) • Waiver of Premiums upon Death (WPD)

37. ParPlus junior FEATUREs Premium band: • 5-99K • 100-and up • Full selection for 250K + Dividend options: • Enhanced (15 year guarantee or guarantee to age 100) • Paid-Up Additions • Accumulation • Cash / Reduced premium

38. For more information… Fromour web site, click on Producer’s Corner

39. For more information… Go in the Individual Insurance Section

40. For more information… Click on the product for which you want information or click on “Product Guides” in the Helpful Links.

41. Remember… Flexibility Guarantees Simplicity Additional Options

42. Client benefits • Flexible dividend options: helps you get customized insurance • Become a part-owner!!! • Permanent coverage! Insurance for life • Term riders for a more complete coverage • Guaranteed level premiums! Premiums will never go up, guaranteed! • Easy application process –simplified issue for ages 18-65 and for amounts $250,000 or less! Means, no needles- no blood test- no doctors… • No-hassle insurance! No need to track your portfolio or worry about when your insurance will end. Stability you can depend on! • Bank-friendly! Some financial institutions will loan up to 85% of the accumulated cash value • Online product – quicker process More than just coverage, it’s insurance that pays you back!

43. broker benefits • Excellent FYC commissions (get paid twice a week) • Online product – no paper - Faster commissions! • Simplified issue–for ages 18-65 and for amounts $250,000 or less!(if all questions answered no, subject to MIB) • Great dividend options: 5 options to choose! • Flexible! Something for the whole family. (ParPlus, ParPlus Junior, FlexTerm rider and Youth Plus rider)

44. Assumption Mutual Life Insurance Company Assumption Life is a thriving Canadian Mutual Insurance Company with over a century of experience! (since 1903) We pride ourselves on our innovative, solution-based, approach in making every step easier for our clients! Mutual Company Doing business with us – is easy!