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GSI 101 - The New Face of Benefits

GSI 101 - The New Face of Benefits. Guaranteed Standard Issue Solutions For Your Clients August 2007. Introduction. Agenda. I. Employee Benefits – Trends II. GSI Defined – The New Face of Benefits III. Prospects – Who is it relevant to? IV. Market Solutions – CI, LTD, Life, LTC

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GSI 101 - The New Face of Benefits

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  1. GSI 101 - The New Face of Benefits Guaranteed Standard Issue Solutions For Your Clients August 2007

  2. Introduction

  3. Agenda I. Employee Benefits – Trends II. GSI Defined – The New Face of Benefits III. Prospects – Who is it relevant to? IV. Market Solutions – CI, LTD, Life, LTC V. Critical Illness Case Study

  4. “The Old Face”Traditional Benefit Plans “Paternalistic” Model • One Size Fits All • Insured • Renewable • Limited and non-guaranteed contracts. • Limited benefit maximums • Participation in group required to maintain benefits

  5. Demographics • Baby Boomer impact • Aging workforce • Inter-generational workforce • Semi-Retired: Ages 62 - ? (8-17% of workforce) • Boomers: Ages 42-61 (36-40% of the workforce) • X: Ages 27-42 (30-33% of the workforce) • Y: Ages 1- 26 (8% of the workforce) • Women in the workforce • Incidence of Illness

  6. Healthcare

  7. Cost • Sustainability • 14% increase in prescription drug costs in 2006 • LTD premiums have almost doubled in the last 5 years • Benefits represent 8%-10% of employer payroll in 2007 • Canadian corporations considering radical steps to manage cost in the next 12 to 24 months: • Increased employee contribution • Decreased benefits Dilemma: Health benefits are increasing in importance, but costs are burdensome to both employer and employees

  8. GSI DefinedGuaranteed Standard Issue The integration of traditional group and individual protection

  9. GSI DefinedGuaranteed Standard Issue The capacity to: • Deliver the contractual strength of individual policies that have been integrated with traditional group coverage • Avoid full underwriting requirements • Contain costs with level rates • Discount opportunities available on some solutions • Funding flexibility

  10. GSI DefinedGuaranteed Standard Issue The capacity to: • Implement contracts with coverage guarantees • Manage diverse demographic requirements • fill coverage gaps • Create a portable benefit

  11. GSI Implemented • Offer Letter • One page enrollment • Issue of individual policies • Ownership • Employee Sessions • Education is critical • Administrative Management • Billings • Hires • Terminations • Employee Changes

  12. Administrative Considerations • Carrier Billing systems • Aligning with Human Resources processes. • Mergers and Acquisitions • Turn-Over • Enrollment • Preservation of contracts (time sensitive)

  13. Who is it relevant to? • Leaders & innovators • Attraction/Retention focused organizations • “Greying” workforces • Premium sensitive companies • Executive Groups

  14. GSI Solutions Available in the Market • Integrated Long Term Disability • Critical Illness • Life • Long Term Care

  15. Integrated Long Term Disability Plans“The Brakes” Combining Individual and Group Benefits (non-medically) Advantages: • Lock in up to 50% of LTD premium to age 65 • Increase Non-Evidence maximums (reverse discrimination) • Improve contract • Residual Benefits • 80% Income rules

  16. Integrated LTD

  17. Integrated LTD

  18. GSI Integrated Long Term Disability“Reverse Combo” Group Coverage $7000 LTD ($4,000 Non Evidence) I NCOME Individual Coverage $3,000. Monthly Maximum (Guaranteed Standard Issue) Wage Continuation or STD Group LTD Individual GSI

  19. Integrated Long Term Disability Plans“The Brakes” Caution: • Not available to all occupations • Could be an initial price increase • Sometimes cost stays the same or goes down

  20. Critical Illness Insurance“The Air Bag” Focus on providing coverage for serious illness Advantages: • Reduce cost with locked in premium platform • Not tied to ability to work – Disability Management • Second opinion program • Manages rising incidence in the workforce • Fastest growing benefit in Canada • 30% of Canadian employers intend to add Critical Illness in the next 24 months

  21. Critical Illness – Case Study • Joint Case • 75 person company • Traditional benefits plan with employer paid LTD. • After evaluation of plan, LTD became employee paid. • This freed up employer sponsored dollars that allowed the implementation of $50,000 GSI CI without an additional cost.

  22. Critical Illness Quoting Requirements • Date of Birth • Smoking Status • Gender • Occupation • Salary • Date of Hire

  23. Critical Illness – Case Study Monthly Premium for GR65: $4,057.38 for 72 lives • Core benefit • Employer paid • Employer owned • Ownership transferred at termination

  24. Critical Illness – Case Study Compensation: • Ran business through MGA • FYC + Bonus was approximately $35,000 in commission • Renewal approx: 17.5% • Power of turn over

  25. Other GSI Solutions New to the market: • Optional GSI Critical Illness • Top-up • Good will offering • GSI Life T-20 (minimum 10 lives) • Executive, Professional or Management Classes • Key Man • Long Term Care

  26. Connectivity Ensuring efficient utilization of benefit plans

  27. Melanie Jeannotte Senior Advisor Vital Benefits Inc. 403.209.3817 mjeannotte@vitalbenefitsinc.com www.vitalbenefitsinc.com

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