GSI 101 -The New Face of

BenefitsGuaranteed 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

V. Critical Illness Case Study

“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

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

Healthcare

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 increasingin importance, but costs are burdensome

to both employer and employees

GSI DefinedGuaranteed Standard Issue

The integration of traditional group and individual protection

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

GSI DefinedGuaranteed Standard Issue

The capacity to:

Implement contracts with coverage guarantees

Manage diverse demographic requirements fill coverage gaps

Create a portable benefit

GSI Implemented Offer Letter

One page enrollment

Issue of individual policies Ownership

Employee Sessions Education is critical

Administrative Management Billings Hires Terminations Employee Changes

Administrative Considerations

Carrier Billing systems

Aligning with Human Resources processes.

Mergers and Acquisitions

Turn-Over Enrollment Preservation of contracts (time sensitive)

Who is it relevant to?

Leaders & innovators

Attraction/Retention focused organizations

“Greying” workforces

Premium sensitive companies

Executive Groups

GSI Solutions Available in the Market

Integrated Long Term Disability

Critical Illness

Life

Long Term Care

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

Integrated LTD

Cost Containment

$1,800

$2,000

$2,200

$2,400

$2,600

1 3 5 7 9 11

Years LTD Programs in Force

LT

D R

ates

Per

Mo

nth

Existing PlanRates

New LTDProgram Rates

Integrated LTD

Income Protection

020,00040,00060,00080,000

100,000120,000140,000160,000180,000

30k 60k 100k 150k 200k 300k

Actual Income

Insu

red

LT

D I

nco

me

Group LTD

Group &Individual

IndividualNeed

GSI Integrated Long Term Disability

“Reverse Combo”

I NCOME

Group Coverage

$7000 LTD($4,000 Non Evidence)

Individual Coverage

$3,000. Monthly Maximum(Guaranteed Standard Issue)

Wage Continuation

or STD

Group LTD Individual GSI

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

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

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.

Critical Illness Quoting Requirements

Date of Birth Smoking Status Gender Occupation Salary Date of Hire

Critical Illness – Case StudyMonthly Premium for GR65:

$4,057.38 for 72 lives

Core benefit Employer paid Employer owned

Ownership transferred at termination

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

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

Connectivity Ensuring efficient utilization of benefit plans

STD

EAP

Wellness

Health & Dental

LTD

Melanie JeannotteSenior Advisor

Vital Benefits Inc.403.209.3817

mjeannotte@vitalbenefitsinc.comwww.vitalbenefitsinc.com