What is Risk Management?

Why it is important to women?

Just a little heart attack

http://www.youtube.com/watch?v=t7wmPWTnDbE

Financial Independence

Social Capital Family Legacy

The Realms of Planning

Types of Insurance

Life InsuranceDisability InsuranceCritical Illness InsuranceExecutive HealthGroup Benefits

Life Insurance

Two types: temporary & lifetimeTemporary (Term) is often most economical in short term Lifetime (Permanent) is comparable to a long-term investment – best suited to fulfill legacy goals

“Richard, Mr. Iduvudu, the insurance man, is here to determine your life expectancy.”

Types of Life Insurance

Policy Type Whole Life Universal Life Period Coverage Life Life To age 100 Depends on term of

contract. Often renewable for additional terms

Premiums Guaranteed. Usually remain level Flexible. Can be increased or decreased by policy holder within certain limits.

Guaranteed. Usually remain level

Guaranteed and remain level for term of policy (e.g., 10 or 20 years)

Death Benefit Guaranteed in contract. Remain level. Dividends may be used to enhance death benefits in participating policies.

Flexible. May increase or decrease according to fluctuations in cash value fund.

Guaranteed in contract. Remain level.

Guaranteed in contract.

Cash Values Guaranteed in contract. Non forfeiture options guaranteed in contract.

Flexible. May increase or decrease according to investment returns and level of policyholder depositsNon forfeiture options guaranteed in contract.

Usually none. Non forfeiture options usually guaranteed in contract

Non forfeiture options usually guaranteed in contract

Dividends Payable on ``participating`` policies. Not guaranteed.

Most policies are ``non participating`` and do not pay dividends

Most policies are ``non participating`` and do not pay dividends

Most policies are ``non participating`` and do not pay dividends

Permanent Term to 100 Term

How are your premiums determinedAge Males Females

Years to live

Life expectancy Years to live Life expectancy

50 28.53 78.53 33.72 83.7255 24.19 79.19 29.19 84.1960 20.12 80.12 24.83 84.8365 16.42 81.42 20.68 85.6870 13.08 83.08 16.78 86.7875 10.15 85.15 13.18 88,1876 9.61 85.61 12.50 88.5077 9.10 86.10 11.85 88.8578 8.60 86.60 11.21 89.2179 8.13 87.13 10.59 89.59

Tax Benefits of Insurance

Death Benefits pay in tax freeCash values can grow tax deferredPreferred Beneficiary – asset protectionChanges on the horizon & some structures taken away in last Federal Budget

Due Diligence Checklist

What is guaranteed – what is not?Are there exclusions or ratings? Are there surrender charges?What is the financial strength of the insurer?Is my product renewable and convertible?If it is a joint life product – what happens if we divorce?

Disability Insurance

Chances of becoming disabled for 3 months or longer before age 65** Derived from 1985 Commissioners Individual Disability Table A.

58% 54% 50% 48% 40% 30% 23%

Age 25 30 35 40 45 50 55

Who provides DI coverage and types of coverage

Disability insurance is available as: o Individual insurance plans o Group insurance plans o Special purpose plans o Government plans

Disability plans typically replace up to 60%-85% of your regular incomePlans can be non-cancellable guaranteed renewableSome plans pay tax-free benefits, while others are not

Critical Illness Insurance

o One in three Canadians will develop a life-threatening cancer(1).o 1 in 3 women in Canada will develop some form of cancer during

their lifetime.(1) o One in two heart attack victims are under 65 years old(2).o Each year, 50,000 Canadians suffer a stroke. Of all stroke victims,

75% will be left with a disability(2).1) Canadian Cancer Society2) Heart and Stroke Foundation

What is covered under Critical Illness Insurance & what can I do with the benefit

Critical illness insurance (CI) provides a lump-sum benefit:o Heart Attacko Life-Threatening Cancero Stroke

Funds are non-taxable and can be spent at your discretionTypes: temporary & permanentDoes not replace disability insurance

Group Insurance

Sponsored by employers for the benefit of their employees and the immediate family membersProfessional associationsGroup insurance includes coverage for:• Healthcare and dental-care, life and AD&D, short term

disability, long term disability, critical illness and disability and wellness programs

Executive Healthcare Plans

Worldwide medical coverageOptional extreme sports coverage, optional dental, and term life/accidental death & dismemberment (AD&D) insurance coverageCan cover hospital and medical expenses

We all have a story

The Planning Horizon

Strategies, Tactics and Tools

Mission, Vision, Values & Goals

Above

Below

WHY

HOW

Cathy McCartanIncredibly bright and in her late 20’sImmigrated from Ireland in 2011Engaged – wedding in 2014!!!!4 Siblings, Dad has health challenges Core Values:

Strong work ethicLeads with her heartFamily connectedness

Burn Rate: $40K/yr

Risk Management - POMP

Disability InsuranceCritical Illness

Allison MaherEarly 40’s – Mother of 2 small boysSelf-employed2nd Marriage (no step kids)Core Values:

Thinking strategicallyBeing impactfulFiercely independentLoyalty

Burn Rate: $160K/yr (Nanny & Private Schools)

Risk Management - POMP

Life insurance – o term & permanento Life insurance trust

Disability InsuranceCritical Illness

Gwen BeckerStunningly beautiful and in her early 50’sOn the path to financial independence – strong career focus3 Sons –all successfully launched2nd Marriage/Blended Family, Husband Lane (53)Core Values:

Giving back – knowledge, power, act as a catalystJust do it! “Own your own life”Drive forward – “learn from life lessons, but don’t look in the rear view mirror”Loves to plan and live life purposely

Burn Rate: $150K/yr (mostly due to second house costs)

Risk Management - POMP

Life Insurance - $250K/sonExecutive Health - Travel to U.S. (in retirement) Critical Illness

Financial Transcendence

Birth

Family LegacyFamily Legacy

Social Capital Legacy

Social Capital Legacy

Excess$

AccumulateAccumulate ProtectProtect TransferTransfer

FinancialDependence

Financial Independence

Deficit

What stage are you at?What stage are you at?

What are your Big Rocks?

Stress Test

… retain sufficient resources to protect your financial security and maintain your desired lifestyle?… transfer what you have, to whom you want, when you want, the way you want?… direct your social capital in a manner consistent with your personal values?

Does the strategy/plan allow you to ...

Where to start?

What keeps you up at night?What are your most important goals?Red Dot Analogy

Thank you

WINK – Estate & Business Planning

Melanie McDonald – May 2nd

This seminar will review the key information that you need to know about Wills, Powers of Attorney, Personal Directives, Trusts and Business Planning.