This document discusses various types of insurance and risk management strategies. It covers topics such as life insurance, term insurance, whole life insurance, universal life insurance, disability income protection, critical illness insurance, and long term care insurance. For each type of insurance, the document provides details on coverage options, premium costs, benefits, and common uses. It emphasizes the importance of insurance for individuals, families, and business owners to manage risks related to mortality, health issues, loss of income, and more.

1. COCHRANE WEALTH MANAGEMENT
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Honest Ideas – Successful Solutions

2. LEARNING ABOUT
INSURANCE AND RISK
MANAGEMENT
Richard Foy
Certified Financial Planner

3. CHANGING NEED FOR LIFE INSURANCE

4. RISK MANAGEMENT - Are you covered?

5. MANAGING RISK FOR BUSINESS
 Attracting and retaining employees
 Ownership, conflict or change
 Loss of key person
 Economic risks
 Consumer spending
 Supplier risks
 Protecting intellectual property
 Credit risks
 Operational risks
 Catastrophic risks

6. FINANCIAL PAIN RELIEF
PURPOSE:  Creation of estate
 Protection of estate
TYPE:  Term insurance
 Permanent insurance
REASON:  Love
 Fear

7. GENERAL USES OF LIFE INSURANCE
 Create an estate
 Pay taxes at death
 Income replacement
 Capital loss due to death
 Fairness at inheritance time
 Provide for retirement funds
 Excellent for business transfers
 Gifts to charities
 Payoff mortgages, guarantees, loans

8. FOR BUSINESS OWNERS
 Life insurance creates immediate liquidity for
business continuation
 Replace a key employee
 Restructure financing arrangements
 Repay creditors
 Facilitate business succession to buy
partners shares upon death

9. THE INSURANCE WORLD
What if you die too soon…?
What if you live too long…?
What if your health fails…?
What if you cannot earn a living…?

10. THE INSURANCE WORLD
Too much insurance…
Not enough insurance…
Paying too much for your insurance…
Not the right kind of insurance…

11. INSURANCE MANAGEMENT STRATEGIES
I am bullet proof
Self insure
Share the burden

12. “WILL I RECEIVE BENEFITS?”
At time of claim??
At time of Application??

13. TERM
INSURANCE

14. TERM INSURANCE
 Term insurance is designed to last a specified
amount of time such as one year, five years,
ten years or up to a certain age
 At the end of this time, the policy expires
 Temporary
 Ideal for young families
 Low cost

15. TERM INSURANCE
 Term 10 and 20
 Renewable until age 85
 Joint protection
 Preferred rates based on lifestyle and medical history
 Guaranteed premiums for future renewals
 Option to convert into permanent insurance
until age 65

16. TERM INSURANCE IS USED FOR…
 Insure mortgage and other personal loans
 Provide for children’s education
 Preserve your estate
 Cover costs of final wishes and inheritance
 Share buy back for deceased shareholder
 Hire a replacement or offset losses resulting
from the death of a key employee

17. FOR EXAMPLE…*
TERM 10 TERM 20
$500,000 $500,000
1 – 10 years $464 $778
11 – 20 years $2,770 $778
21 – 30 years $6,637 $9,580
31 – 40 years $18,981 $9,580
*Annual Premiums based on:
40 year old male, non-smoker

18. Private Mortgage Protection
vs. Bank Mortgage Protection
Refer to handout

19. WHOLE
LIFE
INSURANCE

20. WHOLE LIFE INSURANCE
 A traditional policy with level premium payments
designed to remain in force over the lifetime of the
insured
 Early premiums tend to be higher than required
 This builds a base reserve along with accumulated
interest which enables the premium to remain level
in later years

21. WHOLE LIFE INSURANCE
 Offers permanent coverage with guarantees
on premiums and values
 Way to pay for taxes when an inheritance is
transferred

22. WHOLE LIFE
Types of Coverage:
Whole life 100
Whole life limited pay, age 65, age
75, 20 years, 25 years, 30 years

23. COVERAGE AVAILABLE
 Single
 Joint last to die
 Joint first to die

24. OTHER FEATURES
 Cash surrender value: The cash surrender value begins
around the 10th policy anniversary year and builds the
longer the policy is in effect
 Automatic premium loan is only available if there is cash
surrender value, interest will be charged on the amount
of the loan
 Reduced paid up option entitles the client to stop paying
the insurance premiums provided there is a cash value
to do so
 Once this option is elected, the client cannot pay back
the premium and have the sum insured increased to the
original amount

25. ……and more features
 Guaranteed insurability benefit
 Medical underwriting can become an issue

26. FOR EXAMPLE…*
TERM 10 TERM 20 WHOLE LIFE WHOLE LIFE
$500,000 $500,000 $500,000 $100,000
1 – 10 years $464 $778 $5,897 $1,250
11 – 20 years $2,770 $778 $5,897 $1,250
21 – 30 years $6,637 $9,580 Paid Up Paid Up
31 – 40 years $18,981 $9,580 Paid Up Paid Up
*Annual Premiums based on:
40 year old male, non-smoker

27. LIFE PROFILES
Refer to handout

28. UNIVERSAL LIFE
INSURANCE

29. UNIVERSAL LIFE INSURANCE
 Flexible premium
 Adjustable benefit policy
 Blends term insurance and a savings account
earning current interest rates
 Unlike whole life, premiums can be adjusted
provided the policy value is adequate to maintain
the cost of insurance

30. Universal Life Insurance
 Minimum funding
 Maximum funding
 Maximum tax actuarial reserve (MTAR)

31. UNIVERSAL LIFE
Refer to handout

32. LIFE INSURANCE
INVEST UNIVERSAL
PREPAY WHOLE LIFE
LOW COST TERM LIFE

33. COMMON QUOTES……..
“Insurance is a waste of money
if we never use it”
“Insurance is the best thing we’ve ever
done when we need it”

34. INSURANCE
Is not about ourselves…………
It is about:
our survivors
our caregivers
Don’t forget to ask your survivors or
caregivers what they think!

35. HOW MUCH LIFE INSURANCE DO
“THEY” NEED??
$100,000 @ 6% $6,000/year
$500/month
$200,000 @ 6% $12,000/year
$1,000/month
$500,000 @ 6% $30,000/year
$2,500/month
$1,000,000 @ 6% $60,000/year
$5,000/month

36. DISABILITY
INCOME
PROTECTION

37. DISABILITY INCOME PROTECTION
 Self-employed
 Trade professions
 Medical professions
 Business owners
 Corporate employees

38. DISABILITY INCOME PROTECTION
Guaranteed Premiums
Renewable Premiums

39. DISABILITY INCOME PROTECTION
Any occupation
Regular occupation
Own occupation

40. HOW WILL YOU PAY FOR YOUR DISABILITY?
 Spouse’s income
 Government programs
 Emergency savings
 Investments
 RRSP withdrawals
 Loan
 Friends and family
 Downsize your lifestyle

41. CRITICAL
ILLNESS
INSURANCE

42. CRITICAL ILLNESS INSURANCE
 Provides a lump sum cash benefit if a medical
condition is diagnosed
 Assists with needs such as mortgage and debt
protection, supplementing gaps in other insurance
protection, asset preservation

43. CRITICAL ILLNESS INSURANCE
 It’s about peace of mind
 It’s about recovery
 Getting better costs money
 Treating and coping with illness can mean
significant and often unexpected costs

44. CRITICAL ILLNESS INSURANCE
 The money is yours to use any way you want
 Find the best health care available – anywhere
 Hire a nurse or caregiver to help you at home
 Make mortgage payments
 Replace lost income

45. CRITICAL ILLNESS INSURANCE
 Coverage available from $25,000 to $2 million
 Policy is available with level premiums, renewable
premiums payable to age 100 or limited pay
 Lots of bells and whistles …

46. CRITICAL ILLNESS INSURANCE
 Getting your money back
 If you don’t ever need a critical illness payout, there
are return of premium riders available at an
additional charge

47. WHO NEEDS CRITICAL ILLNESS INSURANCE??
Everyone…
A single woman…
A single parent…

48. CRITICAL ILLNESS INSURANCE
Refer to handout

49. LONG TERM CARE
INSURANCE

50. LONG TERM CARE INSURANCE
Provides benefits to cover the costs of long
term care either home based or in a
nursing care facility

51. LONG TERM CARE INSURANCE
Long Term Care Insurance is a horribly named
product and should be called:
“Bathing and toileting insurance so your kids
won’t have to do it for you!”

52. LONG TERM CARE INSURANCE
Retirees and pre-retirees who are concerned about:
 Maintaining the qualify of life
 Protecting retirement savings
 Estate preservation

53. LONG TERM CARE INSURANCE
When the insured person is functionally
dependent, cannot do two or more activities of
daily living, which includes bathing, eating,
dressing, toileting, maintaining continence
or
cognitive impairment

54. CHANGING NEED FOR LIFE INSURANCE

55. BUILD A TEAM OF TRUSTED CONSULTANTS
FINANCIAL
ADVISOR
BIG PICTURE
LIFE PLAN INSURANCE
BANKER AGENT
LOANS / MORTGAGES
SAVINGS / CHEQUING CAR INSURANCE
HOME INSURANCE
ACCOUNTANT LAWYER
TAXES REAL ESTATE
BOOKKEEPING WILL & PROBATE

56. 8 KEYS TO BUILDING WEALTH
 What does wealth mean to you?
 Identify key issues that need your attention
 Research solutions that will work
 Am I adequately protected?
 Who should be on the “trusted advisor” team?
 Schedule my next financial checkup
 Don’t procrastinate
 HAVE FUN!!!

57. REMEMBER YOUR FINANCIAL
CHECKUP

58. BE HONEST WITH YOURSELF
Procrastination is painless……
until hindsight kicks in

59. THANK
YOU!

60. QUESTIONS?

61. The opinions expressed at the seminar will be those of Richard Foy and not
necessarily those of Raymond James Ltd. Statistics and factual data and other
information presented at the seminar are from sources RJL believes to be reliable
but their accuracy cannot be guaranteed. It is furnished on the basis and
understanding that Raymond James is to be under no liability whatsoever in respect
thereof. It is for information purposes only and is not to be construed as an offer or
solicitation for the sale or purchase of securities. Securities are offered through
Raymond James Ltd., member CIPF. Financial planning and insurance are offered
through Raymond James Financial Planning Ltd., which is not a member CIPF.