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The Maritime Life Assurance Company. Maritime Life Investment Products Bill Ramsay CFP., CLU., CH.F.C., RHU Regional Marketing Consultant.

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Presentation on theme: "The Maritime Life Assurance Company. Maritime Life Investment Products Bill Ramsay CFP., CLU., CH.F.C., RHU Regional Marketing Consultant."— Presentation transcript:

1 The Maritime Life Assurance Company

2 Maritime Life Investment Products Bill Ramsay CFP., CLU., CH.F.C., RHU Regional Marketing Consultant

3 The Maritime Life Assurance Company INVESTMENT PRODUCTS Agenda 3 IP Contracts MLAC Fund Family Stock Market Guarantee Death Benefit Guarantee Seg Fund Loan Programs

4 The Maritime Life Assurance Company INVESTMENT PRODUCTS MLIA Seg Funds GICs (1-30 yrs) RRSP, RRIF & Cash No-load Funds reinvest earnings Series A MLIP Seg Funds Synchrony Funds RRSP, RRIF & Cash ISC or DSC Fund Distributions Electronic Series B CAP Seg Funds Investor Bonus RRSP & Cash DSC Funds reinvest earnings Series C Choice, Flexibility, Guarantees

5 The Maritime Life Assurance Company INVESTMENT PRODUCTS MLIA 23 Seg Funds 13 Partnership GIA’s (1-30 yrs) 9 Portfolio funds RRSP, RRIF & Cash No-load Funds reinvest earnings Series A Choice, Flexibility, Guarantees Issue Age: 0-80 Non-Registered Reg Min Deposit:$5,000 in Yr 1 (non reg) $1,000 ( Reg.) $25,000 RRIF Withdrawals:No Load Client Profile: Max Flexibility, GICs, Stays close to cash Advisor Profile: AttractiveTrailers!!! (Note: Indexing available on RRIF - specify %)

6 The Maritime Life Assurance Company INVESTMENT PRODUCTS MLIP 25 Seg Funds 13 Partnership 9 Portfolio Funds RRSP, RRIF & Cash ISC or *DSC Fund Distributions Electronic Series B Choice, Flexibility, Guarantees Issue Age: Non-Reg.& Reg Min Deposit: $5,000 in Yr 1 (Non Reg.) $1,000 (Reg.) $25,000 RRIF Withdrawals:10% DSC Free (units) Client Profile: Mutual Fund Investor Advisor Profile: Charge back rests with client * Note DSC is deposit based

7 The Maritime Life Assurance Company INVESTMENT PRODUCTS CAP 25 Seg Funds 13 Partnership 9 Portfolio funds Investor Bonus RRSP & Cash DSC Funds reinvest earnings Series C Choice, Flexibility, Guarantees Issue Age: 0-80 Non-Reg.| Reg. Min Deposit:$500 (Subsequent $30 PAC) Admin Fees:$0 - $50 (Deposits) Withdrawals:DSC (10%-0%) : DSC Based on contract date Client Profile: Long term Investor, - Ideal for locked in Funds - Bonus Opportunity Advisor Profile: FYSC (Note: CAP is not RRIF eligible)

8 The Maritime Life Assurance Company INVESTMENT PRODUCTS

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10 Why is a maturity guarantee important? Volatility levels continue to increase. Equity markets continue to offer the best risk- return trade-off. Emotional reactions continue to drive investor behaviour to their detriment.

11 The Maritime Life Assurance Company INVESTMENT PRODUCTS Increasing Volatility: Canada The Canadian market is represented by the TSE 300. YTD 200 as at October 31, Data source FMR Co. Returns expressed are $CDN cumulative annual returns. It is not possible to invest directly in the index. Past performance is not necessarily indicative of future performance TSE 300 index

12 The Maritime Life Assurance Company INVESTMENT PRODUCTS Increasing Volatility – U.S. S&P 500 Source: Policy and data reporting, FMR Co. Percentage of daily changes based on $US returns. YTD 2000 as at October 31, 2000.

13 The Maritime Life Assurance Company INVESTMENT PRODUCTS Increasing Volatility – Global MSCI World index Source: Policy and data reporting, FMR Co. Percentage of daily changes based on $US returns. YTD 2000 as at October 31, 2000.

14 The Maritime Life Assurance Company INVESTMENT PRODUCTS Emotions = Irrational Investing Source: Westcore Funds/Denver Investment Advisers LLC

15 The Maritime Life Assurance Company INVESTMENT PRODUCTS The Reset Approach to Death & Maturity Guarantees Resets provide the opportunity to lock-in market gains On a reset date: Reset Value = Market Value = Gtd. Value Maturity Date = 10 years from Reset Date New Maturity Date Original Maturity Date

16 The Maritime Life Assurance Company INVESTMENT PRODUCTS Drawbacks of Manual Resetting Forces advisors to be market timers Administrative hassle Risky for advisor (potential liability) Non revenue-producing activity Rolling Ten Year Periods – Moving Target

17 The Maritime Life Assurance Company INVESTMENT PRODUCTS When Did You Reset or Did You at All? The December 31, 2000 value of $10,000 invested on January 1, 2000: Did you make the right calls? Weeks in

18 The Maritime Life Assurance Company INVESTMENT PRODUCTS How do the SMG & ADR work? Step 1: Select a maturity date at Plan Issue Plan Issue Chosen Maturity Date Age 3865

19 The Maritime Life Assurance Company INVESTMENT PRODUCTS How do the SMG & ADR work? Step 2: Maritime Life counts back 10 years from maturity date to establish the end of the Automatic Daily Reset period (ADR). The ADR begins at plan issue and ends 10 years prior to maturity. 55 Plan Issue Chosen Maturity Date Age 3865

20 The Maritime Life Assurance Company INVESTMENT PRODUCTS How do the SMG & ADR work? Step 3: During the ADR period, Maritime Life makes two important things happen: 100% of all deposits made are guaranteed at maturity All investment growth is automatically locked-in, every day! Plan Issue Chosen Maturity Date Age 3865

21 The Maritime Life Assurance Company INVESTMENT PRODUCTS How do the SMG & ADR work? Plan Issue Chosen Maturity Date Age 3865 Step 4: During the final 10 years, the SMG is increased by 75% of new deposits made. Withdrawals made at any time reduce the guarantee proportionately % of all deposits made are guaranteed at maturity All investment growth is automatically locked-in, every day! 75% of deposits are added to the SMG value

22 The Maritime Life Assurance Company INVESTMENT PRODUCTS The graph illustrates an investment which grows from $100,000 to $250,000 but suffers from volatility in the final 10 years Market Value $247,583 Stock Market Guarantee ® Chosen Maturity Date Plan Issue

23 The Maritime Life Assurance Company INVESTMENT PRODUCTS With the Stock Market Guarantee, your investment is protected from market downturns. Stock Market Guarantee $263,515 Market Value $247,583 Stock Market Guarantee ® Chosen Maturity Date Plan Issue $263,515

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26 Funds Subject to Stock Market Guarantee as of Jan. 01, 2003: $80, 834 Guaranteed Death Benefit as of Jan 01, 2003: $58,431 Accumulated Value as of Jan. 01, 2003: $61,576.43

27 The Maritime Life Assurance Company INVESTMENT PRODUCTS How do withdrawals affect the guarantees? The guarantees are proportionately reduced for withdrawals For Example: Market Value = $100,000 Gtee = $125,000 Withdrawal = 10,000 or 10% of Market Value Gtee reduced by 10% or $12,500 New Gtee = $125,000 - $12,500 = $112,500

28 The Maritime Life Assurance Company INVESTMENT PRODUCTS Downside Protection... When is Nortel going to be > $125 C($)?

29 The Maritime Life Assurance Company INVESTMENT PRODUCTS Speaking of Nortel... If you had invested $2,000 at the peak of Nortel It would be worth $50.40 today!! (Jan. 06, 2003 $3.15 share) Or, on the other hand If you you bought $2,000 worth of Molson Canadian canned beer You would have $ worth of empties!!!

30 The Maritime Life Assurance Company INVESTMENT PRODUCTS Why Maritime Life’s Stock Market Guarantee ® ? The ONLY maturity guarantee that can: reduce administrative hassle eliminate market timing provide Automatic Daily Resets This promise of unparalleled security can: build new relationships maintain relationships during turbulent times give the advisor a tool for establishing trust and dispelling emotional reactions

31 The Maritime Life Assurance Company INVESTMENT PRODUCTS Strong Pricing Position Stock Market Guarantee is reserve-friendly 0.11% average increase in response to OSFI Maritime Life in strong position vs. competition (most of whom offer only 75%) - Canada Life- Great West Life - Industrial Alliance- TransAmerica - Clarica- Manulife - Standard Life MLAC Average IMF: 2.74% (with SMG & ADR) Competitor Average IMF: 2.75% (mostly 75% only)

32 The Maritime Life Assurance Company INVESTMENT PRODUCTS Funds Not Covered by Stock Mkt. Guarantee Discovery Fund (Signature series) Pacific Basin Equities Fund (Signature Series) AGF International Stock Class Fund Talvest Small Cap Canadian Equity Fund AGF All Styles Global Equity Portfolio Canadian Small Cap International Equity Fund AIM RSP International Growth Class

33 The Maritime Life Assurance Company INVESTMENT PRODUCTS Maritime Life’s Death Benefit 100% of Deposits made before age 76 80% of Deposits made at age 80 and over Deposit Age Protection 76 and under 100% 77 95% 78 90% 79 85% 80 and over 80%

34 The Maritime Life Assurance Company The 2003 RSP Loan Program with AGF Trust

35 The Maritime Life Assurance Company INVESTMENT PRODUCTS AGF Trust selected as our preferred provider AGF Value-Added Proposition Offers convenience and reduced administration Web “Open to Serve” MLAC Processors 24/7 Time saving application process Automatic error checks and edits Paper management – Fax documents Detailed Payment Booklet provided to assist with calculations No Administrative fees Competitive interest rates

36 The Maritime Life Assurance Company INVESTMENT PRODUCTS AGF Value-Added Proposition Service delivery focused on the Advisor’s business Automatic credit decisions Instantaneous counter-proposals Ongoing status updates = Fast and Efficient turn-around to the field For 2004 RSP season we will roll online loan access to Agents

37 The Maritime Life Assurance Company INVESTMENT PRODUCTS AGF Trust Company Wholly owned subsidiary of AGF Management Limited Federally incorporated and licensed to carry on business across Canada Has offered financial solutions to Investment Advisors and their clients since 1988

38 The Maritime Life Assurance Company INVESTMENT PRODUCTS RSP Loan Features — Contribution Loan Minimum Amount Interest Rates Income Verification Payment Terms Prime $2,500 Minimum, No Maximum Not Required 1, 1.5 or 2 Years

39 The Maritime Life Assurance Company INVESTMENT PRODUCTS RSP Loan Features — Maximizer Loan Minimum Amount Interest Rates Income Verification Payment Terms Prime + 3% $5,000 Minimum, No Maximum Over $13,500 3 to 10 Years

40 The Maritime Life Assurance Company INVESTMENT PRODUCTS RSP Loan Features Early-bird rates end February 15, 2003 Add 0.5% from February 16 to March 15 Prime rate applies for loans taken out after March15, 2003 Invest in any MLAC product Flexible Payment Options: Weekly Bi-Weekly Semi-Monthly Monthly

41 The Maritime Life Assurance Company INVESTMENT PRODUCTS RSP Loan Features Funding Options Current dated, or post-dated anytime from 30 to 120 days Up to 180 day payment deferral RSP Loan Program is available throughout the entire year

42 The Maritime Life Assurance Company INVESTMENT PRODUCTS RSP Loan Features Fees No Set-up Fee No charge to re-amortize loan after principle payment made $35 charge for: all other changes to loan terms after loan acceptance Cancellation after loan acceptance Any returned payments Note:Once the loan funds are deposited into the policy, the loan cannot be cancelled

43 The Maritime Life Assurance Company INVESTMENT PRODUCTS Credit Decisions Declines Less than 10% decline rate in 2002 (similar to TD) Bankruptcies / poor credit history Inability to service debt Low net worth AGF may ask for a co-borrower or offer a counter- proposal before a decline

44 The Maritime Life Assurance Company INVESTMENT PRODUCTS Prime Interest Rate Prime is the AGF prime rate in effect on the day the application is funded, not the day it was approved To obtain prime lending rate call the Maritime Life Interest rate hotline at or visit and the rate will be located under “Mortgage and Investment Rates”.

45 The Maritime Life Assurance Company INVESTMENT PRODUCTS Looking beyond the “Loan” rate… $200,000 Borrowed Amort.4.5% Loan Rate3.5% Loan RateDifference 2 Yr.$8,729\mo.$8641\mo.$88\mo. COB$9,509 Int. Pd.$7,373 Int. Pd.$2,136 1 Yr.$17,076\mo.$16,984\mo.$92\mo. COB$4,908 Int. Pd.$3,811 Int. Pd.$1,097

46 The Maritime Life Assurance Company INVESTMENT PRODUCTS Looking beyond the “Loan” rate… $10,000 Borrowed Amort.4.5% Loan Rate3.5% Loan RateDifference 2 Yr.$436\mo.$432\mo.$4\mo. COB$476 Int. Pd.$368 Int. Pd.$108 1 Yr.$854\mo.$849\mo.$5\mo. COB$246 Int. Pd.$191 Int. Pd.$55

47 The Maritime Life Assurance Company INVESTMENT PRODUCTS Looking beyond the “Loan” rate… $10,000 Borrowed Amort.4.5% Loan Rate3.5% Loan RateDifference 2 Yr.$436\mo.$432\mo.$4\mo. COB$476 Int. Pd.$368 Int. Pd.$108 1 Yr.$854\mo.$849\mo.$5\mo. COB$246 Int. Pd.$191 Int. Pd.$55 Question: “with all the market volatility in the past two years, would it be worth it to your client to save $55 (or $108 in the first example above) in interest charges and give up the ‘Stock market Guarantee’ and ‘Daily Resets’???

48 The Maritime Life Assurance Company INVESTMENT PRODUCTS Documentation Signed and completed loan applicationIncome verification loans greater than $13,500Void personal chequeMLAC Investment Application

49 The Maritime Life Assurance Company INVESTMENT PRODUCTS Loan Administration MLAC inputs and “vets” loan applications in 3 regional centres MLAC corresponds with advisors and “accepts” approvals AGF funds loans daily by EFT to MLAC HO Processing centres reconcile daily funding and invest proceeds Loan paperwork forwarded to AGF after the fact

50 The Maritime Life Assurance Company INVESTMENT PRODUCTS The Advisor Guide provides details on: Applying for an RSP loan Tips to avoid RSP loan processing delays Features of the 2003 RSP Loan Program Repayment requirements The loan process Loan administration and inquiries Loan approval process Questions and answers

51 The Maritime Life Assurance Company INVESTMENT PRODUCTS Opportunities and Strategies Fast Facts on RSP Loans 57% of annual contribution room used Unwilling or unable to save maximum RSP contribution room $319 billion: $59 billion new $260 billion carry-forward Lowest interest rates in decades

52 The Maritime Life Assurance Company INVESTMENT PRODUCTS Do you want to… Avoid the last minute February rush? Obtain the Early Bird prime interest rate? Ensure your clients’ loan is processed the first 60 days of the year with interest costs delayed until the end of February?

53 The Maritime Life Assurance Company INVESTMENT PRODUCTS Why not consider completing the RSP loan paperwork in January? You are able to postpone the funding date so that the loan is actually funded during the last week in February.

54 The Maritime Life Assurance Company INVESTMENT PRODUCTS Marketing & Support Materials The following materials are available from Maritime Life’s Stockroom and the Advisor Centre (online materials): E4346 RSP Loan Program – Asset/Liability Disclosure (forms, investment products) E4347 RSP Loan Program – Advisor Guide (investment products, marketing guides and support) E4348 RSP Loan Application (forms, investment products) E4349RSP Loan Repayment Calculator Booklet (investment products, marketing guides and support)

55 The Maritime Life Assurance Company Questions?


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