1. Participating Whole Life VS Universal Life
The differences and the similarities!
Welcome!
First of all I would like to thank you for taking time out of your busy schedules to spend time with me.
Traditional Participating Whole Life Insurance versus Universal Life insurance is the topic for today.
The purpose of this presentation is not to pit one product against the other, but to show how both products meet the needs of various prospects and clients. Both products are essential for your product portfolio!

2. Agenda Product Similarities Differences Case Study 1 Case Study 2
Today we are going to look briefly at the key similarities, and the key differences.
The best way to look at the two products and to see their unique marketing potential or Financial Planning solutions is to look at case studies. I have three case studies to go over, each client with a primary need of permanent protection, but various other needs and risk profiles.

3. Overview Participating Whole Life insurance has been around since 1762
Universal Life… the new kid on the block was developed in the late 1970’s as a solution to the ”Buy Term and Invest the Difference” concept
Whole Life insurance has been around for a long time in fact,
In 1762, James Dodson formed a company based on the radical idea of a level-premium whole life insurance policy.  William Morgan (reputed to be the first actuary) developed mathematical processes to make the plan and the company work. 
Over the years, bells and whistles were added to provide the product with more flexibility and adaptability to ever changing consumer needs.
Universal Life was developed in the late 1970’s as an answer to the Buy Term and Invest the Difference concept. Universal Life was an unbundled product giving the client more control. The product provided more flexibility with respect to premiums, investment options, death benefit choices, cost of insurance and the list goes on. Universal Life was designed to be the product that you and your clients could individually tailor to meet their needs.

4. The Key Similarities Low cost permanent life insurance protection
Flexibility
Premium Holidays
Riders and Benefits
Death Benefit Configurations
Tax-deferred Cash Accumulation
Access to Cash
Withdrawals
Policy Loans
Both traditional participating whole life insurance and universal life can be configured to provide your clients with low cost permanent protection.
Each product offers clients a number of options that enhance the flexibility of the product, the ability to take premium holidays, add a wide variety of riders and benefits, and select from various death benefit options to name a few
Both products offers your clients with the ability to have tax deferred cash accumulation and access to that cash down the road.

5. The Key Differences Traditional Participating Whole Life
The company manages the cash accumulation
Dividend Scales can increase/decrease, but can never be “negative”
Premium is “Bundled”
Premium
Policy Fee
Guaranteed Cash Values
Universal Life
The client/producer manages the cash accumulation
Account values can earn negative and positive interest
Premium is “Unbundled”
COI
Administration Charges
Premium Tax
Investment Portion
Higher Premium deposits available
There are some key differences between the two products…
The main difference between traditional participating whole life insurance and universal life insurance is the management of the cash accumulation…
With whole life the company manages the cash accumulation, in the crediting of dividends to your clients policy. While dividend scales can fluctuate based on a number of factors, such as the company’s experience with claims , investment earnings, expenses and taxes, the guaranteed cash values and death benefits are there for the life of the policy.
On the other hand, with universal life you and your client manage the cash accumulation.
With universal life your client elects which Investment Interest accounts he or she would like to invest their excess premiums into and has the opportunity to change those accounts down the road. But with the flexibility comes the risk. Unlike Guaranteed Deposit Accounts or the Daily interest account your client could earn positive or negative interest.
Premiums are another key difference.
With whole life the premiums your client is required to pay in return for the guaranteed benefits within policy are set at issue and are guaranteed for the life of the contract. With some participating whole life plans, additional deposits are available to increase accumulated values in a tax deferred manner. However, the extent to which a client may deposit additional premiums to their policy is more limited with whole life than with Universal life.
With Universal Life the premiums are “unbundled”. What is guaranteed within your client’s premium is the cost of insurance rates and the administration charges. Premium tax and the amount of premiums required to fund your client policy are not guaranteed. However, with Universal Life your client may have the opportunity to put more money into their policy than they could with whole life.

6. Case Studies VS
The simplest way to demonstrate the differences between whole life and universal life is to look at some case studies, or examples of how the products could be used.

7. Case Study 1 Client: Need:
Male, age 43, nonsmoker, residing in Ontario
On the risk scale… leans to the more risk averse
Need:
$750,000 Permanent Insurance
Premiums Payable for a maximum 20 years
Cash available as a safety net for enhancing retirement income 65 and 69
Currently maxed out RRSP
Looking to spend $15,000/year
In this case study the client is a male, 43, nonsmoker, residing in Ontario.
He doesn’t like to take a lot of risks. His investment choices are GDAs or portfolio funds as he is not an avid investor. What he would really like is to put this plan into place and not have to worry about it!
He needs:
750,000 Permanent Insurance
Premiums Payable for a maximum 20 years
Cash available as a safety net for enhancing retirement income 65 and 69
Currently maxed out RRSP
Looking to spend $15,000/year

8. Product Configurations
Equimax®
Equimax 20 Pay
Dividend Option – Enhanced Protection with Lifetime guarantee
Excelerator Deposit Option added to increase premium to $15,000
Equation Generation III®
Premiums payable for 20 years
Level Protector as Death Benefit Option
YRT as COI type
Portfolio Interest Option elected earning 5.5% interest
Increase Death Benefit by 8% for exempt handling purposes
This is how we set up the two policies
READ SLIDE

9. Equation Generation IIII
Comparison
Equimax
Equation Generation IIII
Premium
$15,000
Death Benefit
$750,000
Guar. CV Age 65
$237,977 -
Age 85
$335,821
Total CSV Age 65
$526,094
$379,218
Age 70
$722,421
$510,059
$1,675,184
$1,290,373
Total DB Age 65
$1,019,795
$1,248,277
$2,182,651
And here is the performance
The premium for both plans is $15,000 with an initial death benefit of $750,000
As you can see in this Case Equimax out performs Universal life.
READ some of the NUMBERS
Summary
Equimax
In this case Equimax out performed Universal Life
Minimal additional deposits available
Offers a guaranteed death benefit and a guaranteed cash value
Equation Generation III
Net Rate of Return illustrated was 5.5% potential for higher or lower growth
More Flexibility for future dump-ins
The cost of insurance and administration fees are guaranteed
Notes: Earliest Offset is NOT Guaranteed.
Values illustrated assume premiums have been paid for life of the plan.

10. Case Study 2 Client: Need:
Male, age 52, nonsmoker, residing in Ontario
A risk taker, investments include stocks
Need:
$500,000 Permanent Insurance today with an increasing death benefit
Looking for a Tax Deferred investment to supplement retirement income
Premium $$$ no maximum
In this case study the client is a male, 52, nonsmoker, residing in Ontario.
He is a risk taker, however the risks he takes do not have an adverse affect to his insurance rate, therefore he is not a skydiver, or scuba diver etc. He likes to take his risks with the stock market and investments. He likes to manage his money on his own!
He needs:
$500,000 Permanent Insurance today
He wants the death benefit to grow as he believes his net worth is going to continue to grow
Looking for a Tax Deferred investment to supplement retirement income
Premium $$$ no maximum

11. Product Configurations
Equimax
Equimax 20 Pay
All Basic Permanent Protection
Dividend Option– Paid Up Additions
Specified Offset 8 years
Maximum Excelerator Deposit Option
Equation Generation III
Account Value Protector as Death Benefit Option
Level as COI type
Portfolio Interest Option elected earning 6.5% interest
Matched Equimax Maximum
Premiums payable for 8 Years
Increase Death Benefit by 8% for exempt handling purposes
Here’s how the plans were set up:
READ SLIDE
It is important to note that we ran UL two ways, one with a premium that matches Equimax and the other with the maximum variable premium for 8 years.
In addition, I used Level COI with the UL scenarios due to the short premium paying period and the need for maximum exempt room.

12. Equation Generation III
Comparison
Equimax
Equation Generation III
Matched Premium
1at Yr Max Exempt
Premium
$28,305
$32,558
Total Cumulative Premium
$226,440
$258,163
Death Benefit
$500,000
Total CSV Age 65
$226,688
$283,046
$335,409
Age 70
$341,860
$368,375
$436,206
Age 85
$804,039
$1,082,908
$1,280,937
Total DB Age 65
$625,335
$783,046
$933,098
$565,338
$868,375
$1,033,895
$1,206,761
$1,438,993
$1,707,950
As you can see in this Scenario Universal Life out performs Whole Life. More money can be put into the policy while ensuring its exempt status.
READ figures from slide.
It is important to note that the Cash Surrender Value available with Equation Generation III in this scenario includes the Surrender Value Supplement, which is only available if the policyowner fully or partially surrenders his or her policy
Notes: Earliest Offset is NOT Guaranteed.
Values illustrated assume premiums have been paid for life of the plan.

13. Case Study 3 Client: Need:
Female Age 31, Non Smoker, Residing in Ontario
Purchasing life insurance to protect her mortgage,
Doesn’t like paying with nothing in return… likes the idea of cash values
Likes to take some chances in life… but doesn’t consider herself a big gambler
Need:
$250,000 of Life insurance
Cash Values…
Looking to spend no more that $100 per month
READ Slide

14. Product Configurations
Equimax
Equimax Life Pay
Dividend Option – Enhanced Protection with 10 Year Guarantee
Equation Generation III
Level Protector as Death Benefit Option
YRT as COI type
Portfolio Interest Option elected earning 5.5% interest
Increase Death Benefit by 8% for exempt handling purposes
This is how we set up the two policies
READ SLIDE

15. Equation Generation III
Comparison
Equimax
Equation Generation III
Premium
$1,018
Death Benefit
$250,000
Earliest “Offset”
Age 59
Age 54
Guar. Cash Value Age 55
$21,330 -
Age 65
$32,327
Total CSV Age 55
$37,079
$ 39,057
$74,545
$ 80,874
Age 75
$137,437
$154,305
Total DB Age 75
Age 85
$337,909
$300,400
And here is the performance
The premium for both plans is $1, 018
As you can see both Equimax and Equation Generation III provide similar benefits.
Summary
Equimax
Equimax offers similar total cash values but has guaranteed cash values as well
Equation Generation III
Net Rate of Return illustrated was 5.5% potential for higher or lower growth
The cost of insurance and administration fees are guaranteed
What is the solution for this case… Does your client want the company to look after her insurance and investment or does she want to look after it… with your help of course.
Notes: Earliest Offset is NOT Guaranteed.
Values illustrated assume premiums have been paid for life of the plan.

16. Which One… No Quick Answer
Both products are important to keep in your product portfolio
Both products meet different “risk tolerance”
Both products require different levels of participation in the management of this asset by you and your client
In the end… both provide you with a product to meet your clients protection and cash accumulation needs!
Read Slide

17. Thank You
Equitable Life® has made every effort to ensure the accuracy of this presentation. However, if the information presented here differs from that contained in any Equitable Life policy contract, the policy contract prevails in all cases. This presentation is intended for informational purposes only and is provided with the understanding that it does not render legal, accounting or other professional advice.
Equitable Life, Equitable Life of Canada ,Equation Generation, Equimax, Equitable Sales Illustrations and design, and the lighthouse design are all trademarks of The Equitable Life Insurance Company of Canada. Reproduction or redistribution of this presentation, in whole or in part, without permission from Equitable Life is forbidden.
© 2005 The Equitable Life Insurance Company of Canada. All rights reserved.