Transamerica Layered Insurance Strategy. It doesn t matter where your story begins

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1 Transamerica Layered Insurance Strategy It doesn t matter where your story begins

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3 it only matters where you re going. Imagine your life if things never changed. If everything stayed exactly as it is today. Not very exciting, is it? At Transamerica we know that your life story is always evolving, so we ve developed insurance products and tools that can help us understand your needs today while anticipating where you want to be in the future. Now that s exciting! [ 1 ]

4 Understanding your needs Simply put, the more your advisor understands about where your life is today and where you would like it to be in the future, the better he or she can advise you on the right insurance products to protect your family and save for your future. If you are like most people, you are probably confused about how much insurance you really need to properly protect your family. As well, what type of insurance and when to buy it can also be confusing. But it doesn t have to be that way. Your advisor can show you how Transamerica products can provide a layered approach to your insurance needs, allowing you to protect your family today and save money for the future. Protection for today security for tomorrow Remember your first car? It s probably quite a bit different than the car you drive today. And the car you drive now probably doesn t have the same features as the car you will be driving 10 years from now. This is because your transportation needs evolve over time. The same can be said about your need for insurance protection. [ 2 ]

5 Evolving needs = Layered solution Earlier on in your family s life, you will probably find that your need for insurance protection is greater than your need for retirement savings. If you re like most people, you are now focused on paying off your mortgage and saving for your children s education. Your family s dependence on the breadwinner(s) leads to a critical need for insurance protection in these early family years. We believe that your insurance protection should mirror your insurance needs throughout your life, because the protection you need 10 years from now may not be the same as the protection you need today. In the future, when your mortgage is paid off and your children are finished with school, your need for protection will decrease and your financial focus will shift. At this time you will most likely be looking forward to saving enough money to enjoy your retirement years in comfort, while balancing this desire with the need to ensure that unexpected expenses arising from disability, critical illness or the need for long-term care are covered. Transamerica s layering strategy is an affordable solution. You know that life insurance is the right choice for protecting your family and providing for their needs. But did you know that regardless of your budget, your advisor can put together a life insurance solution, designed just for you, that will allow you to decrease your protection over time as your insurance need decreases and your need for savings increases? If you are like most people, you have a budget for insurance and a budget for savings. As your need for insurance protection decreases, applying a layered approach to your insurance coverage allows you to shift some of the dollars you were previously allocating to insurance into long-term savings. And even if saving more money isn t your priority, a layered approach to insurance is flexible enough to give you the option of decreasing your coverage or maintaining your coverage over time whatever fits for your particular situation as your life evolves. Regardless of whether you choose to decrease or maintain your coverage, with a layered approach to insurance, you only pay for the protection you currently need. Whatever your budget, whatever your current and future needs, layered insurance can provide an option that is right for you. So, where do you begin? How do you know which products provide the right solution for you? [ 3 ]

6 What s your story? Insurance products are not a one size fits all solution so it s important that your advisor knows your whole story and you know all of your options before you make your decision. The first step to getting the proper insurance protection is to let your advisor know all about your needs. To make this as easy as possible, we ve created LifeScripter. Scripting your life The LifeScripter tool helps take the guesswork out of buying personal insurance. With just a few simple clicks, your insurance needs for today and for the future are evaluated, and a recommendation that balances your insurance needs with your insurance solution is created just for you. Ask your advisor about LifeScripter and how it can be used to prepare detailed solutions customized to your needs. [ 4 ]

7 A tale of two layering options Everyone is different, and everyone has different needs and different priorities when it comes to purchasing insurance and saving for the future. Some people choose to focus on paying down their debt, while others split their focus between debt repayment and savings. There s no right or wrong way to be. It all depends on your personal life story. And regardless of which group you belong to, a layered insurance solution can help you to meet your shortterm and long-term goals. Priority option #1: Pay now save later Priority option #2: Pay now save now If your priorities, right now, are focused on paying down debt, a layered term insurance solution can provide you with the right mix of insurance at a price you can afford. Transamerica can combine Term10, Term20 and even Term30 insurance to create a solution that will meet your needs while providing volume discounts to help with the cost. Plus, on Term30, Transamerica offers features like the SelectLife option, which can reduce your amount of insurance over time while extending it for life. Ask your advisor about the SelectLife option and how it can work for you. As your life story unfolds and your need for insurance coverage decreases, your monthly cost for insurance will also decrease. However, rather than actually decreasing your payments, you can continue paying what you ve always paid for your insurance, and the difference between the cost of your insurance and what you are continuing to pay can be invested in many different investment options within your universal life contract, where it has an opportunity for tax-deferred growth. These funds may be accessed tax free and can be used for your retirement or other long-term needs, such as dealing with a critical illness or disability or paying for long-term care.* The SelectLife option must be exercised during policy years * Please note that accessing your Living Benefits will have a direct impact on your death benefit. Your advisor would be happy to explain this impact in more detail. [ 5 ]

8 Putting your savings to good use You may want to think of these funds as a secret bank account one that is available to you should you ever need it. While not the primary source of income for your retirement, the funds in your universal life plan can be accessed to cover unexpected expenses that might arise from a critical illness or disability, or to supplement your retirement income, should you find that you need a little extra from time to time. Plus, having this little extra on the side will help protect your primary retirement savings by ensuring that you do not have to tap into those funds whenever you need a little extra financial assistance. Accessing your policy s cash value If you find that you need to access your policy s cash value, for whatever reason, the funds will be available to you through a policy loan, a partial surrender of cash value or, tax free, through a collateral loan obtained through a third-party financial institution. Each option for accessing your policy cash value has its own unique advantages. Should you wish to access your policy s cash value, your advisor will be able to help you choose the option that is best for you. Remember it s your money so it s your choice. Based on the current interpretation of the Income Tax Act (Canada), its regulations and other relevant legislation. Any loan obtained through a third-party financial institution is subject to conditions and availability and is not guaranteed by Transamerica Life Canada. [ 6 ]

9 Understanding CI, DI and LTC If you re not familiar with the terms CI, DI and LTC, don t worry. These are simply short forms for Critical Illness (CI), Disability (DI) and Long-Term Care (LTC). Collectively, these are referred to as Living Benefits, and they help preserve your quality of life should a disability-causing accident or life-threatening medical condition disrupt your financial plan. Although universal life is not a CI/DI/LTC insurance policy, through your Living Benefits you have the flexibility to access the money accumulated in your universal life plan, tax free,** and without surrender charges, to help you protect your quality of life.* Why do you need Living Benefits? If you are like most Canadians, the answer is that you will probably require funds to help pay for a critical illness, disability or long-term care facility in your lifetime. You may access your Living Benefits to fund CI/DI or LTC, and if you find that you don t need these funds to cover these expenses, then the funds may be used to supplement your retirement income, or pass on to your heirs tax free. * Please note that accessing your Living Benefits will have a direct impact on your death benefit. Your advisor would be happy to explain this impact in more detail. ** Under the Income Tax Act (Canada) and at the date of publication of this flyer, the receipt of Living Benefits is not currently taxable. Transamerica does not guarantee nor is it responsible for the tax treatment applicable to this policy feature. Please consult your legal or tax advisor for an opinion on this matter in relation to your particular circumstances. Based on the current interpretation of the Income Tax Act (Canada), its regulations and other relevant legislation. Are you a typical Canadian? 3% the amount of after-tax income Canadians saved in 2008 down from 13% in % the chance of having 1 of 4 major illnesses (heart attack, stroke, cancer, coronary artery bypass) before age % the probability of one spouse in a 60-year-old couple needing long-term care during their remaining lifetime 3 $1,614 the monthly amount Canadians pay for basic long-stay programs not covered by provincial health care 4 1 Source: The Current State of Canadian Family Finances 2008 Report, The Vanier Institute of the Family. 2 Source: Munich Re., Source: Munich Re., Source: Government of Ontario, Ministry of Health and Long-Term Care, [ 7 ]

10 Understanding universal life Simply put, a universal life insurance policy lets you grow your wealth, protect against risk and provides peace of mind for you and your loved ones throughout every stage of life. A universal life policy includes a savings component that permits tax-deferred investment growth, along with life insurance that provides a tax-free death benefit. With a universal life insurance strategy, you can: protect your family s standard of living pass family assets to the next generation pass company assets to the next generation add to your retirement income provide financial security in the event of a critical illness causing disability, an occupational disability or long-term care In order to help you better understand the features of a universal life policy, your advisor will prepare illustrations to review with you. These illustrations will provide further information on the specific features and benefits of the policy and explain how the policy may be affected by future conditions and assumptions. Based on the current interpretation of the Income Tax Act (Canada), its regulations and other relevant legislation. [ 8 ]

11 A final thought No matter what your budget is or how your life story is unfolding, a layered insurance solution from Transamerica can offer you protection for today that takes into account where you will be tomorrow.

12 Transamerica Life Canada is a leading life insurance company in Canada. Through a number of distribution channels, resulting in a national network of thousands of independent advisors, Transamerica provides a full spectrum of individual life insurance and savings products, including guaranteed investments, segregated funds and annuities, designed to improve the futures of Canadians from every walk of life. Transamerica Life Canada is an AEGON company. AEGON is an international life insurance, pension and investment company. With headquarters in The Hague, the Netherlands, AEGON has businesses in over twenty markets in the Americas, Europe and Asia. AEGON companies employ approximately 27,000 people and have some 40 million customers. Understanding the health and wellness issues affecting Canadians, Transamerica Life Canada commits funds annually to our in the spirit of hope charitable giving program, which supports our neighbours and communities through donations to numerous non-profit organizations Yonge Street Toronto, Ontario M2N 7J8 TM LifeScripter is a trademark of Transamerica Life Canada. AEGON and the AEGON logo are registered trademarks of AEGON N.V. AEGON Canada ULC and its affiliated companies are licensed to use such marks. Transamerica and the pyramid design are registered trademarks of Transamerica Corporation. Transamerica Life Canada is licensed to use such marks. LP1382 6/11