The Critical Path. The Canadian Institute of Financial Planners. June 15, Mark Halpern, CFP

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1 The Critical Path The Canadian Institute of Financial Planners June 15, 2010 Mark Halpern, CFP

2 My First Application was a Failure It was me

3 My First Sale My Wife Rhonda

4 My First Claim My friend Paul 44-year old accountant $200,000 benefit Lost his mortgage instead of his house

5 The New Reality Take Advantage Of It Governments and healthcare systems cannot take care of us People are living longer Clients need our advice for living No one is selling living benefits

6 The World Critical Illness Insurance Conference Victoria, BC 2004

7 The Big Idea

8 CI: A Well Kept Secret 10+ years in Canada Untapped Tapped Source: Munich Re

9 Make More Money Work Less Just one sale per month could earn you over $200,000 per year

10 Housekeeping Tips Do what you love Commit to the business eg CFP Join the team eg CIFP, Advocis, MDRT Get a coach

11 Start an e-newsletter

12 Start Telemarketing

13 Develop a Brand

14 Develop a Website

15 Tell The Story Mark Halpern told me about Critical Illness insurance. I now have peace of mind. Mark crash-tested our lives so we are now financially protected no matter what happens. I have no hesitation in recommending Mark to protect you and your family. He is a real pro. Gord Stellick Sports Broadcaster SportsNet and FAN590

Mark crash-tested our lives so we are now financially protected no matter what

16 Public Relations National Post Financial Toronto Star Toronto Sun Vancouver Sun Edmonton Journal Winnipeg Free Press Canadian Living Magazine Chatelaine Magazine Globe & Mail CHTV BNN Advisors Edge Investment Executive Dialogue Magazine Metro Ottawa Halifax Daily News Calgary Sun Edmonton Sun Montreal Gazette Vancouver Province CBC.ca

Globe & Mail CHTV BNN Advisors Edge Investment Executive Dialogue Magazine Metro

17 The High Cost of Ignoring CI Lost income Lost clients A lawyer and his insurance advisor Potential liability I think there s potential for a claim if there is a failure to suggest appropriate types of coverage Neil Gross, LLB

think there s potential for a claim if there is a

18 CPR For a Dying Sale Waiver of Responsibility To: Mark Halpern, CFP,FMA illnessprotection.com Cochrane Drive Markham, Ontario L3R 5K8 Thank you for sharing the information on Critical Illness Insurance with me. We have discussed the importance of this insurance coverage as part of a complete risk management program. You have shared some key statistics relating to incidence of cancer, heart attack and stroke as well as the overall probability of suffering from one of the many covered conditions. You have emphasized that this protection is extremely valuable and have highlighted the adverse financial consequences that Critical Illness would have on our family finances. At this time, we have decided not to proceed with Critical Illness Insurance and we recognize the financial risks of this decision. We will not hold you legally or financially responsible in the event of an illness for not having this insurance coverage in place. Thank you Date Client Signature Client Name (please print) Advisor Signature

We have discussed the importance of this insurance coverage as part of a complete risk management program.

19 Emotional Sales Process Financial Mayo Clinic Three paradigms Up-to-date will, POA Titles, beneficiaries, trusts Estate directory Life insurance Illness protection Health benefits Mortgage financing Investments, RESP, IPP, TFSA Aging Parents Planned charitable giving

directory Life insurance Illness protection Health benefits

20 4 Reasons To Love Rated Cases Create urgency Increase commissions Open the door for additional sales Life, LTC, DI Cement relationships for life

21 Return of Premium (ROP) - The Ultimate Hook Canadian Advantage Magic too good to be true Creates immediate buyer interest Creates urgency Increase commissions

22 Web 2.0

24 CI for HNW What We Learned Great product Expensive Hard to qualify HNW don t need it - they can write their own big cheques HNW want stop-loss protection HNW will pay for concierge treatment

25 Waiting for treatment (weeks) Canada Waiting NL PEI From GP to specialist NS NB From specialist to treatment QC ON MB Source: Waiting Your Turn, Fraser Institute, 2007 SK AB BC

26 HNW Solution: ELITE U.S. Healthcare For Canadians - 60 days to 74 years Covers ANY illness, injury or sickness with a wait time for treatment in Canada Rapid 2nd opinion from Cleveland Clinic U.S. (no deductible) US $5 million lifetime limit Personal case manager helps navigate through the system Concierge services and business class travel

27 Cost Effective Client selects deductible of U.S. $5K or $10K CDN$1,252* annually for a 40 year old male non-smoker CDN$2,098* for a 50 year old male nonsmoker Tax Deductible if set up properly *assumes a U.S. $10K deductible

28 Best Prospects Previous U.S. Medical Experience Unsatisfactory experience in Canadian Medical System Entrepreneurs and Business Owners Professionals C - Suite Executives Executive Groups Declines on CI for pre- existing conditions may qualify Ineligible for CI due to age can qualify You

29 7 Great Sales Ideas Coming soon.

30 It s more than CI Death of the salesman Focused on product and concept sales

31 Become the Trusted Advisor Purveyor of wisdom and knowledge Problem solver vs. Product peddler Show we care before we know Sales will follow

32 My 3 rules Never assume anything Uncover information Build the big picture

33 7 Great CI Sales Ideas 1. Portfolio protection 2. Executive retention strategy 3. Promissory note insurance 4. Unused CSV 5. Double duty dollars 6. Group CI for the executive suite 7. Business Solutions

34 Portfolio protection 25% Stock 0% GIC Hedge Asset Transfer 2% 25% Stock 35% Cash & Equity Funds 35% Cash & Equity Funds 40% Fixed Income 38% Fixed Income

35 Executive retention strategy Additional benefit for key executives CI coverage at a discount Full ROP to the executive at retirement Executive Benefit $250,000 Premium $13,510 Benefit after-tax $6,215 $148,610 Note: Tax consequences depending on how arrangement is structured % Male, 54, NS, MTR 46%

36 Promissory note insurance Balance Sheet As At December 31/2007 UNAUDITED LIABILITIES Current Accounts Payable 166, ,663 GST Payable 40,072 9,270 Tenants Deposits 9, ,419 Management salary payable 200, ,000 Intercompany loan payable 260, , , ,954 Loan Payable 326, ,856 Mortgage Payable 636, ,505 Shareholders Loans Payable 543, ,000 2,183,772 2,381,315

37 Promissory note insurance Stage 1: During Normal Health Shareholder Shareholder Loan Shareholder operating business efficiently OPCO Stage 2: After A Critical Illness of the Shareholder Cannot maintain business Critical Illness Insurance Benefit Repays Shareholder Loan Shareholder Suffering Critical Illness Critical Illness Policy Business is suffering too and may not be easily marketable OPCO CRA

38 Unused CSV Is there CSV on the balance sheet? Is there a personal policy with CSV? Leverage CSV for CI or LTC

39 Double duty dollars Gift of shares Use tax savings to fund life and CI insurance (preserve estate and protect lifestyle) CDA credit if donation is made by a corporation

40 Double duty dollars Personal Donation Corporate Donation Fair market value $500,000 Adjusted Cost Base $300,000 Capital gain $200,000 Taxable capital gain $ 0 Asset FMV $500,000 Capital gain $200,000 Taxable capital gain $ 0 Tax savings(36% tax rate) $180,000 CDA credit $200,000 If net income $666,667 Eligible gift $500,000 Tax savings(46% MTR) $230,000

41 Group CI for the executive suite D.I. C.I. Ability to Work (Own / Any Occ) Ongoing Income Stream 60% - 70% pre-disability ( taxable?) Income Replacement Mental Health Issues, Soft Tissue Injuries, Stress, Depression General Health Complications Stroke Later Stage Cancer Neurologic al Disorders Accidents Paid on Incidence of an event One time lump sum 25K 2 million Provides Choice Money Heart Attack Early-Mid Stage Cancers Specific Surgery

42 Group CI for the executive suite Free CI Guaranteed Standard Issue CI for executives Guaranteed Standard Issue CI for other employees Top up to existing plans

43 Business Solutions Keyperson coverage Shareholder buyout

44 Your opportunity Become the trusted advisor Sell it Refer it Don t ignore it

45 Questions?

46 The rest is up to YOU

Insured Annuity Strategy General Issues

February 7, 2005 Insured Annuity Strategy General Issues Additional considerations that apply to corporations, individuals or trusts Tax Hélène Marquis, LL.L., D. Fis., Pl. Fin, TEP Senior Planning Consultant