Critical Illness Impact Calculator

Four situations are analyzed through the Critical Illness Impact Calculator (CIIC). The first is our baseline, illustrating what projected asset values will be at retirement should the client remain healthy and continue periodic savings. From there, we can evaluate the following scenarios:

  1. Baseline projection illustrates the value of savings at retirement should the client remain healthy and continue periodic investments.
  2. Health is maintained until retirement and the client obtained a Health Priorities Critical Illness contract. The premium cost can be subtracted from the planned periodic investments. Should the client opt for the return of premium at surrender rider, was assume that these funds are added to the savings available for retirement.
  3. A diagnosis of a covered critical illness is made, and the client makes a claim through their Health Priorities Critical Illness contract. The insurance protection allows for the continuation of retirement investments during the recovery period.
  4. The client suffers a critical illness but does not have coverage. This represents the worst case scenario and can result in a significant financial shortfall at retirement.

Advantages

  • Demonstrate the potential value of critical illness insurance to protect investments that are intended for retirement
  • Provide a comparison of four scenarios relating to the client’s health and optional insurance coverage
  • Base comparisons on the individual client’s planned retirement date, current age and savings strategy.

Available products

  • Health Priorities Critical Illness Insurance
    • Term 10 or 20
    • Term 65 with optional return of premium at expiry
    • Term 75 or Permanent with optional return of premiums at cancelation after 15 or 20 years
    • Permanent 10 or 20 pay with return of premiums at cancelation after 20 years

Type of protection

  • Individual

The Critical Illness Impact Calculator is ideal for clients in their working years who are actively saving towards retirement. This concept is designed to help client conceptualize how a diagnosed critical illness could potentially cause a significant drop in their retirement portfolio. The dual impact of making withdrawals from investments and lost accumulation time, especially tax-deferred accumulations as available through registered savings, can compound the effects of such an unfortunate scenario.

This concept can also help clients realize the potential value of a critical illness insurance contract, whether through a claim or with the optional return of premium upon cancelation that is available with most coverage types.

Target market

  • Clients saving for retirement:
    • Couple or single
    • Actively working and contributing to their investments
    • Under the age of 65 (projected retirement can be as late as age 71)
  • People with the following concerns
    • Having sufficient savings for retirement
    • Achieving their retirement goals
    • Maintaining financial independence, now and into retirement

Procedure to illustrate the Critical Illness Impact Calculator:

  1. Begin with a needs analysis for the client to determine the amount of coverage required
  2. Illustrate a Health Priorities contract based on the coverage need identified. You can access the insurance illustration software anytime.
    • Select an individual coverage type (if preparing this concept for a couple, complete one analysis per individual)
    • Ensure that the summary view is indicated as Annual Frequency
  3. Note: This concept is only available for adult clients, Health Priorities – Child or coverages for an insured under the age of 18 will cause an error message to be displayed. When compiling the illustration report, it is important to include the Critical Illness definitions.

  4. When the spreadsheet opens, activate the content and the macros.
  5. The following input screen will appear:
  6. Begin by confirming the information that has been pre-populated from the illustration and modify the ‘prepared for’ name as needed
    • Other modifications will need to be updated on the source illustration
  7. Tax information is pre-filled based upon the chosen province of residence, this can be modified should the client’s specifics differ from the defaulted values provided
  8. Fill out the values pertaining to the client’s current investments that are intended to be used for retirement.
    • Indicate the fair market value, annual contribution amount and projected rate of return
    • For the non-registered investment portfolio, indicate the adjusted cost base
  9. Select the client’s chosen retirement age (maximum value 71)
  10. Confirm if the premium payments will result in a reduction of the planned contributions to the investment portfolio, if not, it will be assumed that additional funds are used to fund the policy
  11. Select an age for the hypothetical illness to occur
  12. The financial impact of the illness will be pre-filled in accordance with the critical illness insurance coverage amount chosen
  13. Note that the graph will adjust to the inputted information, click on the graph to make it larger during the input stage
  14. Select the PDF icon to produce the concept report
  15. A copy of the report will automatically save in the directory "\Downloads\Desjardins". You will also have an option to manually save the document.
  16. When you have finished consulting the report return to the input screen and click Quit. Please note that the concept report is only valid with all pages and the accompanying insurance illustration.
  17. To illustrate the concept again, produce a new illustration and download the concept from the Sales Strategies tab.