Presentation for All FinancialsPresentation for All FinancialsAugust 2007August 2007

Income Protection Income Protection

What is your largest financial What is your largest financial asset?asset?

Is it your home?Is it your home?

Is it your business?Is it your business?

Your Income is an Asset...Your Income is an Asset...

Annual salary of Annual salary of €60,000€60,000, aged 40, aged 40

–Earnings to retirement = Earnings to retirement = €2.1M€2.1M

*Based on retirement age of 65

Mortgage

Car Loan

Savings &Investments

Entertainment

Light & Heat

Life Cover

Clothing

Child-care

Holidays

Food

Insurances

BEST ADVICE VHI/BUPA

… who will pay all these bills ?

SALARYSOCIAL

WELFARE€185pw

Creating the NeedCreating the Need

The Big DropThe Big Drop

€40,000

€14,000

€0

Income Protection - Product ReviewIncome Protection - Product Review

Policy that Policy that pays you an incomepays you an income if you’re out if you’re out of work for more than 13, 26, or 52 weeksof work for more than 13, 26, or 52 weeks

If you can’t do your If you can’t do your ownown occupation occupation Premiums are Premiums are guaranteedguaranteed Full tax reliefFull tax relief on premiums at marginal rate on premiums at marginal rate Pay out in Pay out in 90%90% of claims of claims Hospital Cash after Hospital Cash after 8th day8th day

Premium depends on ….Premium depends on …. Guaranteed (exclusive to FF)Guaranteed (exclusive to FF) ReviewableReviewable

- 5th anniversary & every 5th after that5th anniversary & every 5th after that- Level or Indexing optionsLevel or Indexing options- Occupational Class e.g.Occupational Class e.g.

• 1 Office worker1 Office worker• 2 Salesperson – driving2 Salesperson – driving• 3 Vet 3 Vet • 4 Carpenter4 Carpenter

Length of deferred period - 13, 26 or 52 weeksLength of deferred period - 13, 26 or 52 weeks Ceasing age - 55, 60 or 65Ceasing age - 55, 60 or 65

Examples Of Occupation ClassesExamples Of Occupation Classes

Class 1 Class 2 Class 3 Class 4

Accountant Dentist Driving

Examiner

Bar Person

Office

WorkerEstate Agent Baker Mechanic

Doctor Insurance

Broker

Social

Worker

Carpenter

Cashier Restaurateur Tiler – Floor

& Walls

Builder

OccupationsOccupations

The cost optionsThe cost options::

Gold:Gold:

Deferred 13 weeks, ceasing age 65, indexing Deferred 13 weeks, ceasing age 65, indexing

Silver:Silver:

Deferred 26 weeks, ceasing age 60, indexingDeferred 26 weeks, ceasing age 60, indexing

Bronze:Bronze:

Deferred 52 weeks, ceasing age 60, no Deferred 52 weeks, ceasing age 60, no indexationindexation

Peace of mind ….Peace of mind ….

Guaranteed premiumsGuaranteed premiums Help to get back to work if you need itHelp to get back to work if you need it

– Rehabilitation BenefitRehabilitation Benefit– Proportionate BenefitProportionate Benefit– Linked ClaimsLinked Claims– Health Claims ServiceHealth Claims Service

Ability to increase your level of cover by Ability to increase your level of cover by 30% every 3 years - Guaranteed Increase 30% every 3 years - Guaranteed Increase OptionOption

Changing OccupationChanging Occupation

Benefit LimitsBenefit Limits

Min SA €100 p.w., Max €3,365 p.w. (€175,000 p.a.) Min SA €100 p.w., Max €3,365 p.w. (€175,000 p.a.) Increases to €4,080 p.w. (€250,000 p.a.) for Increases to €4,080 p.w. (€250,000 p.a.) for

“special occupations”“special occupations” Calculation of benefit:Calculation of benefit:

– 75% of income, less single person’s social 75% of income, less single person’s social welfare amount (€9,622 per annum)welfare amount (€9,622 per annum)

Max Benefit CalculationMax Benefit Calculation• 75% of first €125,000 plus 33% of balance to 75% of first €125,000 plus 33% of balance to

maximum of €175,000maximum of €175,000• less state single person disability benefitless state single person disability benefit• less any continuing income less any continuing income

Position the coverPosition the cover

““Deluxe” cover - not everyone can get itDeluxe” cover - not everyone can get it

Depends on your occupation, health historyDepends on your occupation, health history

It will never happen to me ...It will never happen to me ...

Likelihood of long term absence is twice as high as Likelihood of long term absence is twice as high as likelihood of critical illnesslikelihood of critical illness

Average claim payment is for 5.5 yearsAverage claim payment is for 5.5 years Longest claimant - 27 years (still paying)Longest claimant - 27 years (still paying) Claims currently being paid …...Claims currently being paid …...

Policy Start Date Claim Started Age claim started

Occupation Cause of claim Benefit Paid to Date

26-Apr-81 07-Jul-87 42 Accountant Cardiomvopathy €120,000 28-Feb-88 24-May-94 40 Butcher Rheumatiod Arthritis €125,000 16-Dec-94 29-Feb-00 52 Engineer Brain Haemorrhage €59,400 09-Dec-93 06-Jul-01 36 Radiographer Manic Depression €48,400 08-Dec-99 09-Feb-01 44 Insurance boker Cancer €60,000 11-Jun-99 01-May-03 39 Sales Director Multiple Sclerosis €28,000

Total Cover: €

1,257,611

Value for MoneyValue for Money

Cost versus BenefitCost versus Benefit

Male Age 31 n.b, to age 65, Class 2, Deferred Period 26 Male Age 31 n.b, to age 65, Class 2, Deferred Period 26 weeks, premium and benefit escalationweeks, premium and benefit escalation

Benefit:Benefit: €20,800 p.a. (€400 p.w.)€20,800 p.a. (€400 p.w.)

Gross premium €47.42 p.m.Gross premium €47.42 p.m.

Net premium €27.50 p.m.Net premium €27.50 p.m.

Company DirectorsCompany Directors

Company pays the premium - its free Company pays the premium - its free for the clientfor the client

Tax relief for the company, treated as Tax relief for the company, treated as company expense - reduce the company expense - reduce the company’s tax billcompany’s tax bill

No BIKNo BIK Pension contribution protection so can Pension contribution protection so can

have more than 75% of salary have more than 75% of salary covered, up to €40k p.a.covered, up to €40k p.a.

The Business OwnerThe Business Owner Company Directors can take out Executive Company Directors can take out Executive

Income Protection - company pays the premiumIncome Protection - company pays the premium

Position as business insurance - necessary Position as business insurance - necessary business expensebusiness expense

If out of work for medium period - need to If out of work for medium period - need to ensure the business is still there is come back toensure the business is still there is come back to

Can cover net profit amount to ensure own Can cover net profit amount to ensure own salary drawings are covered, plus money to salary drawings are covered, plus money to keep business goingkeep business going

If business ultimately needs to be sold, then If business ultimately needs to be sold, then profit made from this does not effect claim profit made from this does not effect claim paymentpayment