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A partner you can trust.

Critical Illness – Part 2. Conference 2013 Elite. Paul Prosser B.Comm, CFP, RHU Regional Vice-President (Prairies). A partner you can trust. Agenda. Origins Death vs. Critical Illness Perspective Tough Sale? Product Line-Up Sales Idea. Impacting People Every Day. In Canada

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A partner you can trust.

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  1. Critical Illness – Part 2 Conference 2013 Elite Paul Prosser B.Comm, CFP, RHU Regional Vice-President (Prairies) A partner you can trust.

  2. Agenda OriginsDeath vs. CriticalIllnessPerspectiveTough Sale?Product Line-UpSales Idea

  3. Impacting People Every Day In Canada Every 2 minutes someone is diagnosed with cancer Every 7 minutes someone has a heart attack Every 10 minutes someone has a stroke Many will survive. But survival has a cost. $$$$$$$$.

  4. CI – A Unique Beginning in 1967 Critical Illness Protection – The ultimate “Gap Filler” “Not because you are going to die,butbecause you are going to survive!” - Dr. Marius Barnard

  5. Dr. Marius Barnard

  6. From 1983 To Present – 54 Countries

  7. Not because you are going to die... 226,584 Deaths in Canada in 2004 52.4% of all Deaths caused by: Cancer 29.5% Heart Disease 22.9% Source: CBC.ca

  8. Because you are going to survive! Source: StatsCan

  9. Critical Illness – Heart Attack - 1 in 4 Canadians will contract some form of Heart Disease. - 75,000 Canadians will suffer a Heart Attack each year. - The rate of death among patients hospitalized for Heart Attack has decreased by half, from 16% to 8%. - 1 in 2 victims is under age 65. Living with Heart Disease: Age 20 – 49 1.3% Age 50 – 64 6.9%

  10. Critical Illness – Heart Attack Every 7 minutes…a heart attack! Every year 70,000 Canadians will have a heart attack • 82% of victims survive their first heartattack • 1 in 4 Canadianswilldevelopsomeform of heartdiseaseduringtheir life • 1 of 2 heartattackvictimsisunderage 65 Source: Stats Canada

  11. Critical Illness - Stroke - 50,000 Canadians suffer a Stroke each year. • 75% survive the initial event. • Stroke is the leading cause of neurological disability. - 1 in 3 victims are under Age 65. - 75% of victims are left with a disability: • 15% of victims die. • 10% recover completely. • 25% recover with minor impairment or disability • 40% left with moderate to severe impairment • 10% require long-term care for severe impairment Source: Heart and Stroke Foundation of Canada

  12. Critical Illness – Heart Attack & Stroke 80% of Canadians have at least one risk factor for Heart Disease or Stroke: • Smoking • Alcohol • Physical Inactivity • Obesity • High Blood Pressure • High Blood Cholesterol • Diabetes

  13. Critical Illness - Cancer Each week in 2009, 3300 Canadians will be diagnosed with Cancer 30% of these new cancer cases will occur in young & middle aged adults (aged 20-59) Cancer incidence is rising in young women aged 20-39 Nearly half of all Canadian males and 40% of females will be diagnosed with cancer at some point in their lives. Source: StatsCan

  14. Critical Illness - Cancer An estimated 166,400 Canadians were diagnosed with Cancer in 2008. 1 in 3 Canadians will develop Cancer in their lifetime. Three types of Cancer account for the majority of new cases: Men – Prostate, Lung, Colorectal Women – Breast, Lung, Colorectal Mortality from Cancer is declining for both Men and Women under Age 70.

  15. Leading Types of Cancer & Incidence Three leading types of Cancer in males 1. Prostate Cancer – 1 in 7 men will develop prostate cancer 2. Lung Cancer – 1 in 11 men will develop lung cancer 3. Colorectal – 1 in 14 men will develop colorectal cancer Source: StatsCan

  16. Leading Types of Cancer & Incidence Three leading types of Cancer in females 1. Breast Cancer – 1 in 9 women will develop breast cancer 2. Lung Cancer – 1 in 16 women will develop lung cancer 3. Colorectal – 1 in 15 women will develop colorectal cancer Source: StatsCan

  17. CriticalIllness – Cancer, The GreatestRisk Every 2 minutes…a new diagnosis! 173,800 new cases of cancer (excluding about 75,500 non-melanoma skin cancers) and 76,200 deaths will occur in Canada in 2010. Men 90,000 Women 83,900

  18. Critical Illness – Cancer in Young Adults • Cancer is the main cause of early death among young adult females: • Almost 2/3 of young adult Cancers occur in females • Breast cancer is the most common. • More young adult females than young adult males are diagnosed with Lung Cancer. • 30% of new Cancer cases will occur in young and middle-aged adults – ages 20 to 59.

  19. Critical Illness - Statistics • Of 10 Healthy Males 3 will have a Critical Illness before Age 65. • Of 10 Healthy Females 2.7 will have a Critical Illness before Age 65. Source: www.criticalillnessinsurance.com

  20. Critical Illness before Age 65 Source: Heart and Stroke Foundation, Canadian Cancer Society Canadians are 3X more likely to be diagnosed with a Critical Illness before Age 65 than to Die!

  21. Statistics “Everyone will die, but I won’t get sick” Possibility of death vs. probability of critical illness Male - Before age 65 25% 20% 15% 10% 5% Age 35 Age 40 Age 45 Age 50 Age 55 Age 60 0% Source : MunichRe

  22. Statistics “Everyone will die, but I won’t get sick” Possibility of death vs. probability of critical illness Female - Before age 65 25% 20% 15% 10% 5% Age 35 Age 40 Age 45 Age 50 Age 55 Age 60 0% Source : MunichRe

  23. The High Cost of Getting Sick Canadian Dollars ($) The Stats Support The Need Costs for treatment at Mayo Clinic have been converted from US dollars to Canadian dollars assuming a conversion rate of $1.07 Canadian to $1.00 US.

  24. The SteepCost of Surviving • 151,712 Canadians filed personal Bankruptcy/Consumer proposals in 2009 • The average household debt is greater than $90,000. • The total debt to disposable income ratio has increased to 145% for 2009. • The ratio of consumer debt plus mortgage debt climbed to 127% of disposable income in 2008 • Spending and debt have risen much faster than incomes • Annual savings are smaller and average net worth is also less. Now what would you do if you were Stricken with a critical illness?

  25. IA Sales Numbers Life Policy Sales ’12 - 136,000 policies CI Policy Sales ’12 - 19,000 policies Life Policy Sales ’11 - 136,000 policies CI Policy Sales ’11 - 17,000 policies We sell 8X more Life Insurance policies than Critical Illness policies!

  26. Some Perspective

  27. Two Questions? ? Who do you know that has suffered: • Heart Attack? • Life Threatening Cancer? • Stroke? ? What would a little bit of money have meant to them?

  28. What makes CI insurance a tough sale ? • The Price is High • Complexity of Product • Declines for Claims • The Refusal Rate is High • Many Cases with Extra Premiums • Long Underwriting Periods • More difficult underwriting when a Life and CI application is submitted at the same time

  29. Average Face Amount - $95,000 per policy 2005 Sales Breakdown for Products with Guaranteed Premium Rates Source: Munich Re’s Critical Illness Survey 2006

  30. Average Family Income in Canada Source: Stats Canada

  31. IA Stats – Declined Claims • Approx. 600 claims to date • Approx. 100 claims were invalid • Remember CI is a living benefit, claims for death and uncovered illnesses don’t qualify • Approx. 500 valid claims • 56 refusals • Approx. 10%

  32. Causes for Denied Claims According to Swiss Re The most common causes for claims denial are: • 20% - 90 day exclusion for Cancer • 20% - Cancer In Situ • 20% - Heart Attack did not meet definition • 40% - Misrepresentation Source: Swiss Re - 2001

  33. What makes CI insurance a tough sale ? Average age 35 32

  34. Current Techniques for Sales Clients have limited funds…need to take care of their Life Insurance, RRSP, RESP, TFSA, Disability coverage first. Why doesn’t this work? Clients needs & demographics changing Clients risk is living too long not dying too soon.

  35. Current Techniques for Sales Need $$ to access healthcare outside of Canada – Wait lists are increasing! Ability to jump the Queue. Why doesn’t this work? Many people don’t want to leave “home” during a period of Critical Illness. To purchase the amount of coverage required – could be prohibitive.

  36. Current Techniques for Sales CI provides a magic “pot” of money so you can do “whatever” you want to do with it! Why doesn’t this work? “Anything you want” – does not provide a value proposition. What CI benefits can do is not as clear as what Life Insurance does.

  37. Current Techniques for Sales People with $$$ have no need for CI Why doesn’t this work? Wealthy people understand the value of insuring risks. Why use your own money if you can use someone else’s?

  38. Current Techniques for Sales Sell CI for the “Investment” component…aka Return of Premium. Why doesn’t this work? Former product design and pricing is not sustainable. The odds of a claim are high. Adding ROP increases the cost – may eliminate potential buyers.

  39. IA Product Line-Up Transition – Full Product • T10, T20, T75, T100 • 25 Covered Illnesses • Flexible premium options • Ages 0-65* • Prevention + • $10K - $2M face amount * Age at issue varies by term

  40. IA Product Line-Up Transition Evolution • T100 • ROP built in • 25 covered illnesses • $10K - $2M face amount Transition Simplified Issue • T10, T75 • Non Medical • 4 covered illnesses • $10K - $100K face amount

  41. IA Excellence Product Line-Up Cancer Guard • Guaranteed Issue • Non Medical • No MIB • Up to 6 covered illnesses • Up to $100K face amount

  42. Simple Sales Process

  43. Thank you!

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