0. Critical Illness Insurance: Key Markets & Sales Ideas
Note that this is the 2nd in a series of 4 CI presentations:
Needs Analysis
Key Markets & Sales Ideas
Claims & Underwriting
Product Overview
Each presentation is designed to be standalone
Presentations can also be combined to give longer workshops (half day to virtually full day)
Presentation Length (Key Markets & Sales Ideas)
At 48 slides, presentation will take about 1 ½ hours
Presentation Overview (Key Markets & Sales Ideas)
Client and CI sales overview
Uncovering the CI need
Key Markets – Sales Ideas and Case Studies
Summary of BMO Insurance CI Plans

1. Critical Illness Insurance: Key Markets and Sales Ideas
AGENDA
Client and Sales Overview
Uncovering the CI Need
Key Markets – Sales Ideas and Case Studies
BMO Insurance Living Benefit CI Plans

2. Critical Illness Sales Overview
CI Sales in Canada: Client Profile*
Average age is around 33
75% of buyers are between ages 35 and 54
Just under half of sales are to females (47%)
Non-smokers represent 89% of sales
* Source: Munich Re (by face amount )

3. Critical Illness Sales Overview
CI Sales in Canada: Client Profile*
Average annual premium is just under $1,130
Average face amount is $80,000
Almost 90% of policies have 20 or more covered conditions
70% of sales have a Return of Premium Feature
* Source: Munich Re Canada (2011)

4. Critical Illness Sales Overview
CI Sales in Canada: By Product Type
Total 2011 Sales: $102 million (+9%)
* Source: Munich Re (2011)
Renewable is T10 and T20
Limited Period is T75
Permanent is T100 or 15-Pay T100

5. Uncovering the CI need
How do you open the CI discussion with your clients?
2. What are the most important questions?
3. Needs Analysis for CI?
4. Educating your client

6. Uncovering the CI need
How do you open the CI discussion with your clients?
Do you know anyone who was recently diagnosed with a critical illness?
Can you weather the financial impact of a serious illness?
Did you know that a certain type of insurance pays a tax-free benefit 30 days after diagnosis?

7. Uncovering the CI need Fact Find Any CI experiences in your family?
Impact?
If you had a CI what’s important to you?
Benefits at work / private coverage?
Emergency funds in place?
Would cash help?

8. Key Markets: Matching the product to your market
Mortgage market
“I want to pay off my debts”
Over 50 market
“I want a comfortable retirement”
Disability market
“I don’t have enough disability coverage”
Small Business market
“I am the business”
Corporate market
“I need to protect our shareholders”

9. “I want to pay off my debts”
KEY MARKET
Mortgage market
Debt protection
Little disposable income
Combination with life insurance is better
Need affordable coverage
Convertible later
IDEAL PLAN
Living Benefit 10
Living Benefit 20
Living Benefit 100 with ROPS

10. “I want to pay off my debts”
Mortgage market
The Critical Illness Benefit is used to reduce or eliminate the outstanding debt.
If diagnosed with a critical illness, there is a strong chance you will lose your job or be away from work for a long time. The last thing you need to worry about is losing your home.

11. CI Sales Idea: “Mortgage Protection and Your Money Back”
Eric, 35, has just been approved for a $175,000 mortgage. The mortgage rate is 6% and Eric’s selected an amortization period of 25 years. Eric also wants the financial security of knowing that his mortgage will be paid off if he becomes critically ill. Eric makes the right choice and purchases a BMO Insurance Living Benefit 100 critical illness plan providing a benefit of $175,000. If Eric suffers a critical illness, the Benefit can be used to pay off his mortgage. And with BMO Insurance, his critical illness plan also includes a Return of Premium on Surrender Benefit Rider, which gives him the option to surrender coverage anytime after the 10th year and receive back a portion of his premiums. After the 15th year, he can receive 100% of his annual premiums … anytime!

12. CI Sales Idea: “Mortgage Protection and Your Money Back”
Case Study - Eric
Monthly mortgage payment $1,120
*Monthly critical illness premium $221
Total Monthly Payment $1,341
On the 15th policy anniversary:
Mortgage principle just over $100,000
Critical Illness Benefit $175,000
*(based on a Male, age 35, and non-smoker rates)
Mortgage is $100,000 and CI premiums are $221/mo.

13. CI Sales Idea: “Mortgage Protection and Your Money Back”
Now that Eric’s mortgage has been reduced, he may want to surrender $75,000 of coverage.
If he reduces his Critical Illness Benefit to $100,000, he receives a premium refund of $16,560!
Eric can use these funds to pay down his mortgage principal and pay off his mortgage two years earlier!
Mortgage is $100,000 and CI premiums are $221/mo.
Surrender excess Critical Illness coverage of $75,000 for a refund of $16,560!
Partial surrender of coverage is available provided that a minimum coverage of $25,000 is maintained in force. The return of premium on a partial surrender is based on the annual base premium excluding the policy fee. The policy fee is only returned when there is a full surrender of coverage.

14. CI Sales Idea: “Mortgage Protection and Your Money Back”
Eric’s monthly critical illness premium is now reduced from $221 to $129 …
Case Study - Eric
Monthly mortgage payment $1,120
*Monthly critical illness premium $129
Total Monthly Payment $1,249
On the 23rd policy anniversary:
Mortgage is Nil
*(Premium for $100,000 of coverage)
Mortgage is $0 and CI premiums are $129/mo.

15. CI Sales Idea: “Mortgage Protection and Your Money Back”
Now that Eric’s mortgage is paid off, he may want to surrender his Critical Illness Policy and receive a premium refund of $35,720!
Surrender Critical Illness policy for remaining $100,000 for a refund of $35,720!
Mortgage is $0 and CI premiums are $129/mo.

16. CI Sales Idea: “Mortgage Protection and Your Money Back”
Eric can use this money to top up his RRSP, add a sun room to his home or other improvements, fund his children’s education, take a trip ...
And most importantly ... through the term of his mortgage, if Eric becomes critically ill, his Critical Illness Benefit will pay off his mortgage.

17. “I want a comfortable retirement”
KEY MARKET
Over 50 Market
Retirement savings protection
More income, less debt
Level cost of insurance more attractive
Need to protect retirement lifestyle
IDEAL PLAN
Living Benefit 75

18. “I want a comfortable retirement”
Over 50 Market
Critical Illness Benefits can be used to prevent the need to use retirement savings for medical treatments outside of Canada, homecare, home upgrades, medication or other unforeseen expenses.
If diagnosed with a critical illness, many individuals would need to use their RRSPs or home equity to fund their medical and non-medical expenses. The cost of lost retirement income can be in the hundreds of thousands.

19. CI Sales Idea: Protecting Your Savings/Investments
Your client calls to thank you!
“Thanks for encouraging me to save and invest … now whenever I need cash, I can simply use my savings to get me through hard times.”
If your client is diagnosed with critical illness, what happens to their savings and investments?

20. CI Sales Idea: Protecting Your Savings/Investments
Will your clients need to dip into their retirement nest egg?
Will your client reach their retirement and other goals as planned?
Did you complete a full needs analysis for your client?
Why not suggest protecting their savings and investments?

21. CI Sales Idea: Protecting Your Savings/Investments
Case Study – Jennifer
Jennifer, 50, purchases $100,000 of Living Benefit 75 critical illness coverage for an annual premium of $1,815*
At age 58, Jennifer is diagnosed with an aggressive form of breast cancer
She decides to get experimental cancer treatment in Rochester, New York
The critical illness benefit of $100,000 covers the cost of treatment (rather than using some of her $350,000 of retirement savings)
* Quote using BMO Insurance Wave illustration software as of November 22, 2011 using non-smoker rates

22. CI Sales Idea: Protecting Your Savings/Investments
Without CI
With CI
With CI coverage, Jennifer has almost $220,000 more in retirement savings at age 75*
* Includes cost of LB 75 CI policy premiums; assuming 6% annual interest
Note: The savings figures with LB 75 CI insurance include the accumulated cost with interest of the LB 75 premiums from ages 50 to 58, then accumulated with interest until ages 65 and 75.

23. “I don’t have enough disability coverage”
KEY MARKET
Disability Market
Supplemental disability coverage
Off-the-job coverage
Disability income protection
IDEAL PLAN
Living Benefit 10
Living Benefit 20

24. “I don’t have enough disability coverage”
Disability Market
The Critical Illness Benefit is used to top-up the income derived from a disability plan.
If diagnosed with a critical illness, many conditions are similar to those that pay for disability coverage. Unlike disability coverage, critical illness will pay a lump sum amount immediately after the 30 day wait period, AND will not be altered because of your income level.

25. Fact Find (also means educating your client)
Explain the difference between CI and DI
Lump sum vs. monthly income with limited benefit period
CI claim is not dependent on your client’s ability to work
Adjudication once (diagnosis) vs. ongoing claims process & validation of disability (own occ/any occ definition)
30 day survival vs. 90 day plus elimination/waiting period
DI may not cover additional medical costs associated with your illness
** Note: Disability policies often include as a definition of disability that the insured is unable to perform their own occupation for the first two years, and any occupation after two years that the insured could be expected to perform given their level of experience, training and education

26. CI Sales Idea: The 1.0% Solution
If I could show you a way to receive a tax free, lump sum payment in the event of a heart attack, cancer or stroke, would you be interested?
If I could show you how to replace one year’s salary for less then 1.0% of your salary, would you be interested?

27. Insuring One Year’s Salary - $50,000
LB 10*
LB 20*
AGE
MALE
FEMALE 30
12.42
13.41
14.67
16.11 35
15.71
17.78
20.75
22.37 40
21.38
24.48
31.01
31.46 45
31.14
33.21
48.47
45.00
Note that at these ages, all but one of the monthly premiums is less than 1% of annual salary to protect a full year’s salary
1.0% = $500 per year = $45 per month
* Monthly premium as a Living Benefit rider; all rates are non-smoker

28. Insuring One Year’s Salary - $75,000
LB 10*
LB 20*
AGE
MALE
FEMALE 30
18.63
20.12
22.01
24.17 35
23.56
26.66
31.12
33.55 40
32.06
36.72
46.51
47.18 45
46.71
49.82
72.70
67.50
Note that at these ages, all but one of the monthly premiums is less than 1% of annual salary to protect a full year’s salary
1.0% = $750 per year = $68 per month
* Monthly premium as a Living Benefit rider; all rates are non-smoker

29. “I am the business” KEY MARKET Small Business Market
Family business protection
Business income protection
Need to hire help to keep the business running
Avoid the need for an immediate sale
IDEAL PLAN
Living Benefit 10
Living Benefit 20
Living Benefit 75

30. “I am the business” Small Business Market
The Critical Illness Benefit is used to keep the business running and continue the income stream.
If diagnosed with a critical illness, there may be a need to sell the business or close the doors due to illness. Losing the family business or being forced to sell to meet a called bank loan can be devastating.

31. CI Sales Idea: Business Monthly Expenses
How much would you need to cover your business monthly expenses for 6 months, 9 months, 12 months?
Allows your client and their business to adjust to the reality of their changed lifestyle in the event of a critical illness.
This is covered in Critical Illness Needs Analysis (Form 528)

32. CI Sales Idea: CI as a Rider
The CI rider offers the same benefits as a standalone Critical Illness policy
It also includes value-added services at no extra cost: Critical Care Assist Benefit and HelpingHands (provided by Best Doctors and Shepell.fgi)!†
No CI policy or rider fee!
† BMO Insurance may change the service providers or cancel access to these services at any time without notice unless otherwise specified in the contract. Other restrictions may apply.

33. CI Sales Idea: CI as a Rider
Case Study – Anthony and Parveen
Anthony, 38, owns and runs a small bakery
Anthony recently married Parveen, who works part-time at a travel agency
Anthony is looking to purchase $200,000 of term life insurance
His advisor recommends also purchasing $50,000 of Living Benefit 10 renewable critical illness insurance
Note: Case study is based on a true story

34. CI Sales Idea: CI as a Rider
The monthly premium for $50,000 of Living Benefit 10 critical illness coverage from BMO Insurance is only: $19*
Ironically, the monthly cost for Anthony to have purchased just Best Doctors family coverage was also $19**
In this case study, it is the same monthly cost for $50,000 of CI insurance with Best Doctors and Helping Hands services included as it would have cost to buy Best Doctors family coverage only
* Based on non-smoker rates ** Source: Best Doctors (04/06/2010)

35. CI Sales Idea: CI as a Rider
Anthony, while playing in his men’s regular weekly hockey game, started coughing persistently
His family doctor prescribed antibiotics but with no relief of the coughing
Despite monthly visits to his doctor, nothing serious could be detected
Anthony subsequently developed pneumonia, and x-rays indicated an infection in his right lung

36. CI Sales Idea: CI as a Rider
Over a period of months, with constant chest pain and severe coughing, a respiratory specialist ordered two bronchoscopies in addition to a needle biopsy, all which had inconclusive results
Even with the suspicion of cancer, without the pathology to support the diagnosis, treatment could not commence
With all local pathology reports being inconclusive, specialist recommended consulting with a surgeon to undergo a surgical biopsy

37. CI Sales Idea: CI as a Rider
Anthony turned to Best Doctors, who reviewed his medical files and test results, including tissue samples from the first biopsy
Best Doctors confirmed lung cancer that had metastasized into his left hip
Specialist immediately referred Anthony to regional oncologist, who supported Best Doctors findings and recommended treatment, which included a trial drug treatment
Best Doctors also recommended bone maintenance medication used to treat osteoporosis

38. CI Sales Idea: CI as a Rider
After many months of treatment, Anthony was able to return to work at his bakery
The $50,000 critical illness benefit allowed Anthony to hire a temporary worker to keep his bakery going, and Parveen to take a temporary leave of absence from work to stay at home to assist in Anthony’s recovery
The critical illness benefit also covered the $5,000 cost of the trial drug treatment not covered under Anthony’s provincial health care plan

39. CI Sales Idea: CI as a Rider
Best Doctors provided expert and timely life saving recommendations to assist Anthony’s local hospital physicians
HelpingHands services provided Anthony and Parveen stress counseling services through this difficult time
Each of these services saved thousands of dollars in costs and valuable time for unnecessary invasive surgical procedures
All this for a CI rider cost of $19/month!

40. “I need to protect our shareholders”
KEY MARKET
Corporate Market
Key man coverage
Fund buy-sell agreements
Shared ownership agreements
Protection of the day-to-day operation
IDEAL PLAN
Living Benefit 75
Living Benefit 100
15-Pay Living Benefit 100

41. “I need to protect our shareholders”
Corporate Market
The Critical Illness Benefit is used to provide an uninterrupted income flow of the company due to the loss of a key employee and assist in the finding of a replacement.
If diagnosed with a critical illness, the loss of a key employee or executive can cause havoc with the daily operation as well as possibly affect the stock price of the company if there is any significant lost revenue.

42. Corporate Market: Case Study
Case Study – Jarred
Omega Limited Partnership was trying to recruit Jarred, 50, a highly regarded and experienced local engineer
As part of an attractive offer package which included partnership, Omega entered into both a buy/sell and shared ownership agreement with Jarred
The partnership purchased, with Jarred as the life insured, a 15-pay Living Benefit 100 critical illness policy with a benefit of $400,000 and annual premium of $15,963*
* Quote using BMO Insurance Wave Illustration software as of Nov. 1, 2011, based on non-smoker rates

43. Corporate Market: Case Study
The CI coverage included a return of premium on surrender (ROPS) feature which would return 100% percent of premiums paid after 15 years if no CI benefit was paid
The partnership owned the underlying critical illness benefit, but Jarred owned the ROPS benefit
In the event that Jarred were to suffer a critical illness, the partnership could use the CI benefit to hire a temporary replacement
If Jarred was unable to return to work, the CI benefit could also be used to buy-out Jarred’s partnership

44. Corporate Market: Case Study
After many years of a productive and healthy career with the partnership, Jarred decided to retire at 65
Since no CI benefit under the policy was paid, Jarred decided to exercise his ROPS ownership right
The ROPS benefit paid to Jarred was $239,445*, which he could use any way he wanted
Jarred felt that he did not need to supplement his retirement income, so he used the ROPS proceeds to renovate and enlarge his family cottage, and to purchase an adjacent parcel of land that would give him an additional 75 feet of lake frontage
* It is recommended to consult professional advisors regarding the taxation and deductibility of CI benefits and premiums under buy/sell and shared ownership agreements. BMO Insurance makes no representation or warranty regarding this tax treatment.

45. BMO Insurance: Living Benefit Critical Illness Plans
Broad range of critical illness plans with competitive rates and standardized definitions
Industry leading number of covered conditions, including built-in Loss of Independent Existence*
CI riders available on Preferred Term and UL policies (no additional rider or policy fee – bundle up and save!)
Renewable CI plans convertible will full commission
Best Doctors coverage for the life insured, their immediate and extended family members
Helping Hands assistance from Shepell-FGI
Multi-policy fee discount for family and business relationships
* 15-Pay Living Benefit 100 does not include Loss of Independent Existence

46. Getting Started It’s just that easy!
Our application for Life Insurance also includes the application for Critical Illness. No need for supplementary health questionnaires.
Also, remember that your clients can pay their first year premium, up to $50,000 with their MasterCard or VISA.

47. Plan for the unexpected
No matter what plan you have in place, nothing can prepare you for the financial burden associated with surviving a critical illness.
Critical Illness insurance is a vital part of the financial planning process to protect your assets, your lifestyle and your financial future.
FOR ADVISOR USE ONLY
Information contained in this document is for illustrative purposes and is subject to change without notice. Concept illustrations are not contracts and the values shown are not guaranteed. Refer to an up-to-date policy illustration for this plan for a current statement of benefits.
Insurer: BMO Life Assurance Company.
® Registered trade-mark of Bank of Montreal, used under license.

48. We’re here to help. Give us a call!
WESTERN CANADA SALES OFFICE
ONTARIO REGIONAL SALES OFFICE
QUEBEC-ATLANTIC REGIONAL SALES OFFICE

49. Thank you for your time. If you have any questions,
Thank you for your time. If you have any questions, please don’t hesitate to ask.