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What’s New @ AIG Novem ber 2004. Living Benefits. Critical Illness. Announcing the most advanced CI that’s ever been!. Six New Covered Conditions. Critical Illness. A total of 25 covered conditions on all Living Benefit plans, including:

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slide1

What’s New

@ AIG

November 2004

slide2

Living Benefits

Critical

Illness

Announcing

the most

advanced CIthat’s ever been!

slide3

Six New Covered Conditions

Critical

Illness

  • A total of 25 covered conditions on all Living Benefit plans, including:
    • Early Discovery Benefit(Advances 10% up to $25,000 for Early Prostate, Ductal Breast Cancer, Coronary Angioplasty and Superficial Malignant Melanoma);
    • Loss of Independence;
    • Heart Valve Replacement;
    • Aortic Surgery;
  • Introducing Two New Conditions to the Canadian Critical Illness Market...
    • Aplastic Anaemia; and
    • Bacterial Meningitis
slide4

Bacterial Meningitis & Aplastic Anaemia

What is Bacterial Meningitis?

Meningitis is an infection of the fluid and membranes which cover the brain and spinal cord. Bacterial meningitis is the most serious disease of all types of meningitis. Each year there are over 1000 cases of bacterial meningitis in Canada. At least 50 types of bacteria can cause meningitis.

One of the most common types of bacteria to cause meningitis is E. coli (Eschericia coli). In spite of much research, no vaccine has been developed to prevent E. coli meningitis.

Critical

Illness

What is Aplastic Anaemia?

Aplastic anaemia is an extremely serious disorder that results when the marrow fails to produce blood cells. The bone marrow is almost empty of blood forming cells and is described as hypoplastic or aplastic (Greek for low or no-growth).

Anaemia results from reduced red cell production, infections are a result of reduced white cell production, and bleeding results from reduced platelet production. Aplastic anaemia may be either acquired or inherited.

Aplastic anaemia occurs in both adults and children. Certain toxic chemicals, medications, viral infections and radiation exposure appear to cause aplastic anaemia, although the medical community does not know the cause of most cases of acquired aplastic anaemia.

Source: Meningitis Research Foundation of Canada 2004 & the Aplastic Anemia & Myelodysplasia Association of Canada

slide5

Contract Changes

Critical

Illness

  • Cancer discovered in the first 90 days will not terminate the critical illness policy
    • Cancer will be excluded from the definition and coverage will be allowed to continue.
  • New Heart Attack definition to include bio-chemical markers
    • Heart Attack (Myocardial Infarction) is defined as the death of a portion of heart muscle as a result of inadequate blood supply as evidenced by
      • a) new electrocardiographic (ECG) changes indicative of a myocardial infarction, and by
      • b) the elevation of cardiac biochemical markers to levels considered diagnostic for infarction.
    • Heart attack during coronary angioplasty is covered provided that there are diagnostic changes of new Q wave infarction on the ECG in addition to elevation of cardiac markers.
  • Age restriction removed on Alzheimer’s, Parkinson’s and Motor Neuron Disease
    • Reductions in the Critical Illness Benefit after age 75 have been removed.
slide6

Now 2 Renewable and Convertible Plans

Critical

Illness

  • Living Benefit 10 “The Most affordable Critical Illness coverage”
    • A convertible, renewable term 10 critical illness plan available for ages 18 to 65
    • Contractual right to convert up to age 60, to a level T75 or T100 conversion plan

Affordable, short term coverage, perfect for individuals on a limited budget, short term coverage requirements, personal loan protection or for contract and temporary workers.

  • Living Benefit 20 “Economical 20 Year Coverage…Ideal for Mortgage Protection”
    • A convertible, renewable term 20 critical illness plan available for ages 18 to 55
    • Contractual right to convert up to age 60, to a level T75 or T100 conversion plan

Ideal for mortgage protection, corporate and keyman coverage and small business coverage.

slide7

New ROP on Surrender Options

Critical

Illness

  • Living Benefit 75
    • Return of Premium on Surrender Benefit Rider available that will pay 100% ROP at age 75; and
    • An early ROP options starting from the later of age 50 or the 10th policy anniversary at 50% and grading equally to 100% by age 75.
    • ROP percentage comparison between AIG and Manulife for a 40 year old
slide8

New ROP on Surrender Options

Critical

Illness

  • Living Benefit 100
    • Starting after 10 years, the percentage of the Annual Base Premium returned is 50% and increases 10% each year to 100% after 15 years.
    • Living Benefit 100 will pay the inforce face amount, if no claim is made, on the anniversary age nearest the Life Insured’s 100 birthday...with or without the ROPS rider!
    • ROP percentage comparison between AIG and Manulife for a 40 year old
slide9

Other “What’s New” Features

Critical

Illness

  • Return of Premium on Death now available as a rider on all Living Benefit plans
    • Having ROP on Death as a rider allows those can keep costs low by allowing more choice.
  • New rates now calculated on an “Age Nearest” basis
    • Change in age calculation is keeping in line with all of AIG’s other insurance products and eliminates confusion of age between the other plans.
  • New lower minimum $25,000 coverage available with all plans
    • Reduction in minimum for Living Benefit 75 and Living Benefit 100 to allow more financial options for more clients.
slide10

Commission Improvements

Critical

Illness

  • AIG has made some important changes to the commissions paid for the new critical illness plans. These changes include:
    • First Year Commissions have increasedfrom 40% to45%.
    • Lifetime renewal commissions of 2.5%.
    • Policy fee is now commissionable.
    • Return of Premium riders will pay 45% FYC and 2.5% renewals from years 2 to 5.
    • All other riders will continue to pay 35% FYC and 2.5% renewals from years 2 to 5.
slide11

What’s New

Critical

Illness

Best Doctors Inc. services extended to a Life Insured’s immediate family member in AIG’s Critical Care Assist Benefit

A one-time use of Best Doctors, Inc. service is now also available at no charge to an immediate family member (spouse or dependent children) for the illnesses covered under the base Critical Illness plan. This one- time free usage for immediate family members can be elected at any time while the policy is in force. The Life Insured always has access to the Best Doctors’ service even if a family member elects to use their free access.

There is a 12-month pre-existing condition clause for the immediate family members, but not for the Life Insured. Immediate family members would be excluded for critical care assistance on any pre-existing illness.

slide12

What’s New

Living Benefit Riders

Life

Dimensions

4 Critical Illness Riders for UL

  • LB10 and LB20 with conversion to age 60 to T-75 or T-100 Conversion plan
  • LB75 with level premiums to age 75
  • LB100 with level premiums to age 100 and Maturity Benefit
  • Minimum $25,000 Maximum $2,000,000
  • Available on Insured Life and Additional Life
slide13

What’s New

Six New Covered Conditions

Life

Dimensions

  • A total of 25 covered conditions on all Living Benefit UL Rider plans, including:
    • Early Discovery Benefit(Advances 10% up to $25,000 for Early Prostate, Ductal Breast Cancer, Coronary Angioplasty and Superficial Malignant Melanoma);
    • Loss of Independence;
    • Heart Valve Replacement;
    • Aortic Surgery;
    • Aplastic Anaemia; and
    • Bacterial Meningitis
slide14

What’s New

Living Benefit Riders

Life

Dimensions

  • Cancer discovered in the first 90 days will not terminate the critical illness policy
    • Cancer will be excluded from the definition and coverage will be allowed to continue.
  • New Heart Attack definition to include bio-chemical markers
  • Age restriction removed on Alzheimer’s, Parkinson’s and Motor Neuron Disease
    • Reduction in Critical Illness Benefit between 75 and 85 has been removed.
  • Best Doctors Inc. services extended to a Life Insured’s immediate family member in AIG’s Critical Care Assist Benefit as well as the Life Insured
slide15

What’s New

Producer Critical Illness Riders FYC

Life

Dimensions

FYC

C.I. Living Benefit 10 35%

C.I. Living Benefit 20 35%

C.I. Living Benefit 75 35%

C.I. Living Benefit 100 35%

slide16

Term

Life

Tired of clients going through

BLOOD, SWEATand TEARSjust

to get affordable term coverage?

slide17

Introducing EasyTerm 10

Term

Life

EasyTerm 10 is available for ages 18 to 50 for amounts of $100,000 up to $250,000 and the medical requirements are really simple…there are none!

All you and your client have to do is complete AIG’sregular Life Insurance application (Form 126)

EasyTerm 10 is a renewable and convertible 10 year term plan with guaranteed rates. The plan is renewable up to age 85 and convertible up to age 70 to our industry leading Universal Life plans or Term 100 Platinum plan.

EasyTerm 10 is also available on a Joint First-to-Die basis. Now this affordable coverage is even more affordable with two lives, including the Joint Survivor Option and the Double Benefit built into the plan.

slide20

Preferred Term 10...Better than Ever!

Term

Life

AIG Preferred Term 10plan rates have improvedsignificantly, especially for ages under 40. The issue limits have also changed with the introduction of the EasyTerm 10 plan.

For ages 18 to 50, the minimum Preferred Term sum insured is now $250,001.

For ages 51 to 75, the minimum sum insured remains at $100,000.

AIG’s old Preferred Term 10 rates $36.27 $55.35 $128.07

slide22

Introducing the Fund Accelerator Concept

Fund

Accelerator

Increased Fund Value through reduced early insurance costs

A UL plan with:

  • Lower COI over the first 10 years
  • More of the deposit is directed to the investment and less is required for insurance costs
  • Greater potential for superior fund value growth from the first year
slide23

The Market

Fund

Accelerator

  • Larger case market
      • $500,000 face amount +
      • Minimum premium of at least $20,000 or 2 times minimum
  • With Investment Returns of 8% or higher:
      • Higher short term fund values
      • Higher long term fund values
      • Greater leveraging capabilities
slide24

Ability to Achieve Superior Investment Returns

Fund

Accelerator

  • 359 investment options with a 1-year net rate of return of 8% or higher
  • 38 investment options with a 3-year net rate of return of 8% or higher
  • 37 investment options with a 5-year net rate of return of 8% or higher
  • 13 investment options with a 10-year net rate of return of 8% or higher

No other company provides this kind of selection and quality of investment

slide26

Yr 1

200%

Yr 5%

350%

Yr 9

175%

Yr 2

300%

Yr 6%

300%

Yr 10

100%

Yr 3

400%

Yr 7%

275%

Yr 11 +

0%

Yr 4

400%

Yr 8%

250%

Product Specs

Fund

Accelerator

  • Minimum face amount $500,000
  • Minimum premium of the greater of $20,000 or 2 times the actual minimum
  • YRT COI only with YRT switch to Guaranteed Level
  • Full range of investment options
  • Modified Surrender Charges
  • No Maximizer