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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Presentation Transcript
  • 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


  • 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


  • 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


  • 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
  • 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
  • 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

sales and marketing business building program 2006
Sales and MarketingBusiness Building Program - 2006



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


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