The Critical Path

The Canadian Institute of Financial Planners

June 15, 2010

Mark Halpern, CFP

My First Application was a Failure

It was me

My First Sale

My Wife Rhonda

My friend Paul44-year old accountant$200,000 benefitLost his mortgage instead of his house

My First Claim

The New Reality – Take Advantage Of It

Governments and healthcare systems cannot take care of us

People are living longer

Clients need our advice for living

No one is selling living benefits

The World Critical IllnessInsurance Conference

Victoria, BC2004

The Big Idea

CI: A Well Kept Secret

UntappedTapped

•10+ years in Canada

Source: Munich Re

Make More Money … Work Less

• Just one sale per month could earn you over $200,000 per year

Housekeeping Tips

Do what you love Commit to the business eg CFP Join the team eg CIFP, Advocis,

MDRT Get a coach

Start an e-Newsletter

Start Telemarketing

Develop a Brand

Develop a Website

Tell The StoryMark Halpern told me about Critical Illness insurance. I now have peace of mind. Mark crash-tested our lives so we are now financially protected no matter what happens. I have no hesitation in recommending Mark to protect you and your family. He is a real pro.

Gord StellickSports BroadcasterSportsNet and FAN590

Public Relations

National Post Financial Toronto StarToronto SunVancouver SunEdmonton JournalWinnipeg Free PressCanadian Living MagazineChatelaine MagazineGlobe & MailCHTV BNN Advisors EdgeInvestment ExecutiveDialogue MagazineMetro OttawaHalifax Daily NewsCalgary SunEdmonton SunMontreal GazetteVancouver Province CBC.ca

The High Cost of Ignoring CI

Lost income

Lost clientsA lawyer and his insurance advisor

Potential liability“I think there’s potential for a claim if there is a failure to

suggest appropriate types of coverage” Neil Gross, LLB

CPR For a Dying SaleWaiver of Responsibility

To: Mark Halpern, CFP,FMAillnessPROTECTION.com200-600 Cochrane DriveMarkham, Ontario L3R 5K8

Thank you for sharing the information on Critical Illness Insurance with me. We have discussed the importance of this insurancecoverage as part of a complete risk management program. You have shared some key statistics relating to incidence of cancer, heart attack and stroke as well as the overall probability of suffering from one of the many covered conditions.

You have emphasized that this protection is extremely valuable and have highlighted the adverse financial consequences that Critical Illness would have on our family finances.

At this time, we have decided not to proceed with Critical Illness Insurance and we recognize the financial risks of this decision.

We will not hold you legally or financially responsible in the event of an illness for not having this insurance coverage in place.

Thank you

______________________Date

___________________________ ___________________________Client Signature Client Name (please print)

_____________________________Advisor Signature

Emotional Sales Process

• Financial Mayo Clinic• Three paradigms• Up-to-date will, POA• Titles, beneficiaries, trusts• Estate directory• Life insurance• Illness protection• Health benefits• Mortgage financing• Investments, RESP, IPP, TFSA• Aging Parents• Planned charitable giving

4 Reasons To Love Rated Cases

• Create urgency• Increase commissions• Open the door for additional sales

•Life, LTC, DI• Cement relationships for life

Return of Premium (ROP) - The Ultimate Hook

•Canadian Advantage•Magic – too good to be true•Creates immediate buyer interest •Creates urgency •Increase commissions

Web 2.0

CI for HNW – What We Learned•Great product

•Expensive

•Hard to qualify

•HNW don’t need it - they can write their own big cheques

•HNW want stop-loss protection

•HNW will pay for concierge treatment

From GP to specialist

From specialist to treatment

Waiting …

Source: Waiting Your Turn, Fraser Institute, 2007

Waiting for treatment (weeks)

Canada 9.2 9.1

0 10 20 30 408.8

10.6

10.8

8.2

7.6

10.0

14.7

11.2

12.7

13.5

10.1

8.9

16.5

12.0

7.3

9.4

10.5

13.6

11.9

10.6

BC

AB

SK

MB

ON

QC

NB

NS

PEI

NL

HNW Solution: ELITE U.S. Healthcare™

•For Canadians - 60 days to 74 years

•Covers ANY illness, injury or sickness with a wait time for treatment in Canada

•Rapid 2nd opinion from Cleveland Clinic U.S. (no deductible)

•US $5 million lifetime limit

•Personal case manager helps navigate through the system

•Concierge services and business class travel

Cost Effective•Client selects deductible of U.S. $5K or $10K

•CDN$1,252* annually for a 40 year old male non-smoker

•CDN$2,098* for a 50 year old male non-smoker

•Tax Deductible if set up properly

• *assumes a U.S. $10K deductible

Best Prospects•Previous U.S. Medical Experience•Unsatisfactory experience in Canadian Medical System•Entrepreneurs and Business Owners•Professionals•C - Suite Executives•Executive Groups•Declines on CI for pre- existing conditions may qualify•Ineligible for CI due to age can qualify•You

7 Great Sales Ideas

Coming soon….

It’s more than CI…

Death of the salesman Focused on product and concept

sales

Become the Trusted Advisor

Purveyor of wisdom and knowledge Problem solver vs. Product peddler Show we “care” before we “know” Sales will follow

My 3 rules…

Never assume anything Uncover information Build the big picture

7 Great CI Sales Ideas

1. Portfolio protection2. Executive retention strategy3. Promissory note insurance4. Unused CSV5. Double duty dollars6. Group CI for the executive suite7. Business Solutions

Portfolio protection

2%

25% Stock

35% Cash & Equity Funds

38% Fixed Income40% Fixed Income

35% Cash & Equity Funds

25% Stock

0% GIC Hedge

Asset Transfer

Executive retention strategy

Additional benefit for key executives CI coverage at a discount Full ROP to the executive at retirement

Note: Tax consequences depending on how arrangement is structured.

Executive Benefit $250,000Premium $13,510Benefit after-tax $6,215ROP @65 $148,610

IRR @ 65 12.52%Male, 54, NS, MTR 46%

Balance Sheet

As At December 31/2007 UNAUDITED

LIABILITIESCurrent 2002 2001

Accounts Payable 166,770 136,663GST Payable 40,072 9,270Tenants Deposits 9,857 158,419Management salary payable 200,000 200,000

Intercompany loan payable 260,548 280,602677,247 784,954

Loan Payable 326,954 359,856Mortgage Payable 636,350 654,505

Shareholders’ Loans Payable 543,221 582,0002,183,772 2,381,315

Promissory note insurance

Promissory note insurance

Shareholder

Shareholder Loan

OPCO

Stage 1: During Normal Health

Stage 2: After A Critical Illness of the Shareholder – Cannot maintain business

Shareholder Suffering Critical

IllnessCRA

Critical Illness Insurance Benefit Repays Shareholder Loan

OPCOCritical Illness Policy

Shareholder operating business efficiently

Business is suffering too and may not be easily marketable

Unused CSV

Is there CSV on the balance sheet? Is there a personal policy with CSV? Leverage CSV for CI or LTC

Double duty dollars

Gift of shares Use tax savings to fund life and CI

insurance (preserve estate and protect lifestyle)

CDA credit if donation is made by a corporation

Double duty dollars

Fair market value $500,000

Adjusted Cost Base $300,000

Capital gain $200,000

Taxable capital gain $ 0

If net income $666,667

Eligible gift $500,000

Tax savings(46% MTR) $230,000

Asset FMV $500,000

Capital gain $200,000

Taxable capital gain $ 0

Tax savings(36% tax rate) $180,000

CDA credit $200,000

Personal Donation Corporate Donation

Group CI for the executive suite

Stroke

Later StageCancer

Neurological

DisordersAccidents

Ability to Work (Own / Any Occ)

Ongoing Income Stream 60% - 70% pre-disability ( taxable?) Income Replacement

Mental Health Issues, Soft Tissue Injuries, Stress, Depression General Health Complications

D.I.

Paid on “Incidence” of an event

Heart Attack Early-Mid Stage Cancers

Specific Surgery

C.I.

One time lump sum25K – 2 millionProvides ‘Choice’ Money

Group CI for the executive suite

“Free” CI Guaranteed Standard Issue CI for

executives Guaranteed Standard Issue CI for

other employees Top up to existing plans

Business Solutions

Keyperson coverage Shareholder buyout

Your opportunity

Become the trusted advisor Sell it Refer it Don’t ignore it

Questions?

The rest is up to YOU