If it took a lifetime to accumulate your nest egg, it’s worth protecting

Melissa DaileyConsultant

Investors Group Financial Services Inc.

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This Presentation

Is presented as a general source of information only, and is not intended as a solicitation to buy or sell investments, nor is it intended to provide professional advice including, without limitation, investment, financial, legal, accounting or tax advice. For more information on this topic or any other investment or financial matters, please contact an Investors Group Consultant.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

Insurance products and services distributed through I.G. Insurance Services Inc. (in Quebec, a Financial Services Firm). Insurance license sponsored by The Great-West Life Assurance Company (outside of Quebec).

™ Trademark owned by IGM Financial Inc. and licensed to its subsidiary corporations.

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Agenda

Wealth Preservation

Estate Equalization

Life Altering Illness

Critical Illness & Long Term Care Protection

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Wealth Preservation

Your legacy represents a lifetime of earnings and savings - your lifetime!

If it is worth a lifetime to accumulate, is it worth keeping?

Wealth preservation is ensuring your heirs receive the full value of your legacy!

THE GOVERNMENT WILL PROBABLY BE AN UNINTENDED BENEFICIARY OF YOUR ESTATE.

You may be able to offset the tax liability

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Wealth Preservation

Can you afford to ignore the ‘tax bite’?

100% of the value of your RRSPs or RRIFs (unless rollover exemption applies)

Tax on capital gains

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Wealth Preservation

Examples of capital property that may attract income tax if a capital gain occurs: Mutual funds Stocks & Bonds Cottage Rental property Land investments Business assets (including farm property) Antique cars, artwork and jewelry

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Wealth Preservation

Current Exceptions:

Personal Residence

Rollover of property to a spouse or common-law partner

$750,000 capital gains exemption in case of qualified farm property and qualified small business corporation shares.

Rollover of farm property to a child or grandchild

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Wealth Preservation

Paying taxes on an estate - what are other solutions?

Spousal or common-law partner rollover

Heirs pay the taxes from their own income or assets

Heirs can borrow money

Heirs can sell estate assets

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Wealth Preservation

Paying taxes on an estate - Another viable option is life insurance:

Proceeds are guaranteed, tax free and can be payable upon the second to die spouse’s death;

Cost effective because only a single plan is required

Monetary outlay is generally 1% - 2 % of gross estate

Buy enough life insurance to cover your estate taxes. No matter how stiff the premium might seem, it’s a bargain. Fortune Magazine, March 1996

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Fair & Equitable Estate Distribution

What if... Your estate assets include a cottage, rental property,

business or farm that cannot be easily divided or sold? The assets are tied up in buildings, land, or machinery? One child is interested in the cottage, business or farm,

while other children are not? Your surviving spouse still requires an ongoing income

and does not want to rely upon the children or give away the assets yet?

The child who wants the assets cannot raise the funds to buy out other siblings?

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Estate Equalization

Critical issues to consider first:

Who wants to own the cottage, or who is capable and committed to running the business or farm?

What other assets are available?

How will your other children (heirs) feel?

When do you want to transfer your assets (at death, retirement or spouse’s death)?

Do you and your spouse have enough to retire comfortably?

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Estate Equalization

An estate equalization strategy, using life insurance, can address all of these situations to enable a fair and equitable distribution of assets to all heirs

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Estate Equalization

What is it?

A guaranteed financial commitment provided by a life insurance benefit that is triggered upon the death of both parents

A cash benefit that is made available at the precise moment it is needed

Beneficiaries receive cash benefit completely tax free

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Estate Equalization - How it works?

Rental Property Farm Business Cottage

ESTATE

Involved/Interested child

Asset usually acquired at increased

cost base

Estate Residue

Insurance Company

Estate Equalization Payments

Non-Involved/Interested child

No legal interest in asset bequeathed to “Involved

Child”

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Estate Equalization - Advantages

Conserves family assets

Enables transfer of property to a child who wishes to acquire it and provides proceeds to non-involved children

Achieves an equitable estate distribution

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Life Altering Illness

Did you know, in Canada, it is estimated that:

Approximately 410,000 Canadians will suffer a critical illness this year – and most will survive

1 in 2 men and 1 in 3 women are predicted to develop heart disease in their lifetime

40,000 to 50,000 Canadians suffer a stroke each year An estimated 3,075 Canadians will be diagnosed with

cancer every week - the cancer survival rate has nearly doubled to 55 percent in 30 years.

Commissioner’s Disability Table 1985Heart and Stroke Foundation 2001National Cancer Institute of Canada: Canadian Cancer Statistics 2007

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Life Altering Illness

Alarming?

Yes - but thanks to advances in medical science and technology - many will survive

But…what if you recover, but your finances don’t?

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Living With A Life Altering Illness

Ongoing expenses

Lifestyle Adaptation Expenses

Transportation Expenses

Home Conversion Expenses

“I have learned how the financial health of an ailing person can also become a contributing factor to his or her physical health. There is a definite link between physical and financial well-being”

Dr. Marius Barnard

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Life Altering Illness and Long-Term care insurance Protection

Critical Illness Protection - Provides alump-sum payment upon diagnosis of a specified critical illness and surviving a required period of time

Long Term Care Protection - Covers a variety of on-going nursing, personal care and social services that may be required as a result of a long illness

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How can a Critical Illness or Long Term Care insurance Plan Help You?

Critical Illness

Out of country medical expenses

Private nursing

Child care

Debt/mortgage repayment

Home adaptation/renovation

Change of lifestyle

Supplemental income

Long Term Care

Medical care

Home care

Daily care in an adult day care centre

24 hour care in a long-term care facility

Services of a registered nurse

Homemaker services

Respite care for your caregiver

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Critical Illness insurance & Long Term Care insurance

Critical illness & Long Term Care Protection:

Fills the gaps between life and disability insurance

Provides you with living benefits

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Questions?

If it took a lifetime to accumulate your nest egg, it’s worth protecting C3226 (03/2009)