The BMO Insurance Whole Life Plan Paul Morra

The BMO Insurance Whole Life Plan Paul Morra An advisor perspective PN 0098 E 2018/01/25

Default Product Selection Tendency to default to usual recommendatio n One size does NOT fit all Habits 2

All policies have the same ingredients … Premium Total Death Benefit Total Cash Value Policy Pie Duration Guaranteed Cash Value Face Amount . . . What’s most important depends on each client’s goals! 3

All policies have the same ingredients … Total Death Benefit Premium Total Cash Value Guaranteed Cash Value Policy Pie Duration Face Amount . . . What’s most important depends on each client’s goals! 4

All policies have the same ingredients … Total Death Benefit Total Cash Value Guaranteed Cash Value Premium Policy Pie Duration Face Amount . . . What’s most important depends on each client’s goals! 5

All policies have the same ingredients! Know your client(s) This is your first step in selecting the right product(s) for your client(s)! Rate your clients’ priorities 6

Case Study: Male 40 Non-Smoker, 10 -Pay

Male 40 Non-Smoker, 10 -Pay, Standard Class BMO Insurance Whole Life Plan Pay Period 10 -Pay Premium Face Solve Par Plan #1 Par Plan #2 Non-Par Plan 20 -Pay with premium offset at years 11 -20 10 -Pay 15 -Pay with premium offset at years 11 -15 $50, 000 annually Total Deposit over 10 years: $500, 000 1, 170, 886 BMO Insurance Advantage: 957, 734 885, 767 22% 32% more Coverage 971, 044 21% more Coverage Source: Based on illustration software values as of January 29, 2018 8

Guaranteed Cash Values Year 5 35, 000 30, 000 25, 000 20, 000 15, 000 10, 000 5, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 9

Guaranteed Cash Values Year 10 250, 000 200, 000 150, 000 100, 000 50, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 10

Guaranteed Cash Values Year 20 700, 000 600, 000 500, 000 400, 000 300, 000 200, 000 100, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 11

Guaranteed Cash Values Year 30 800, 000 700, 000 600, 000 500, 000 400, 000 300, 000 200, 000 100, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 12

Guaranteed Cash Values Year 40 1, 000 900, 000 800, 000 700, 000 600, 000 500, 000 400, 000 300, 000 200, 000 100, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 13

Total Cash Values Year 5 Current Scenario – 1% 140, 000 120, 000 100, 000 80, 000 60, 000 40, 000 20, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 14

Total Cash Values Year 10 Current Scenario – 1% 400, 000 350, 000 300, 000 250, 000 200, 000 150, 000 100, 000 50, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 15

Total Cash Values Year 20 Current Scenario – 1% 900, 000 800, 000 700, 000 600, 000 500, 000 400, 000 300, 000 200, 000 100, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 16

Total Cash Values 1, 600, 000 Year 30 Current Scenario – 1% 1, 400, 000 1, 200, 000 1, 000 800, 000 600, 000 400, 000 200, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 17

Total Cash Values 2, 500, 000 Year 40 Current Scenario – 1% 2, 000 1, 500, 000 1, 000 500, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 18

Total Death Benefit 1, 600, 000 Year 5 Current Scenario – 1% 1, 400, 000 1, 200, 000 1, 000 800, 000 600, 000 400, 000 200, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 19

Total Death Benefit 2, 000 Year 10 Current Scenario – 1% 1, 800, 000 1, 600, 000 1, 400, 000 1, 200, 000 1, 000 800, 000 600, 000 400, 000 200, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 20

Total Death Benefit 1, 800, 000 Year 20 Current Scenario – 1% 1, 600, 000 1, 400, 000 1, 200, 000 1, 000 800, 000 600, 000 400, 000 200, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 21

Total Death Benefit 2, 500, 000 Year 30 Current Scenario – 1% 2, 000 1, 500, 000 1, 000 500, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 22

Total Death Benefit 3, 500, 000 Year 40 Current Scenario – 1% 3, 000 2, 500, 000 2, 000 1, 500, 000 1, 000 500, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 23

Internal Rate of Return (IRR) on Death Benefit Year 5 Current Scenario – 1% 70% 60% 50% 40% 30% 20% 10% 0% BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 24

IRR on Death Benefit Year 10 Current Scenario – 1% 25% 20% 15% 10% 5% 0% BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 25

IRR on Death Benefit Year 20 Current Scenario – 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 26

IRR on Death Benefit Year 30 Current Scenario – 1% 7% 6% 5% 4% 3% 2% 1% 0% BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 27

IRR on Death Benefit Year 40 Current Scenario – 1% 6% 5% 4% 3% 2% 1% 0% BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Source: Based on illustration software values as of January 29, 2018 28

Summary For every metric used. . . • • Similar results in all areas for Joint Last to Die plans Guaranteed Cash Values Total Death Benefit IRR on Death Benefit BMO WLP advantage even more pronounced on rated cases BMO Insurance Whole Life Plan comes out ahead from years 20 plus! 29

Take advantage of our age rating method for rated cases Male 50 Non-Smoker, 200% Rating BMO Insurance Whole Life Plan Pay Period 10 -Pay Premium Rating Face Solve Par Plan #1 Par Plan #2 Non-Par Plan 20 -Pay with premium offset at years 11 -20 10 -Pay 15 -Pay with premium offset at years 11 -15 $50, 000 annually Total Deposit over 10 years: $500, 000 Age 57 150% 200% 1, 170, 886 957, 734 885, 767 971, 044 9% 19% BMO Insurance Advantage: 11% more Coverage Source: Based on illustration software values as of January 29, 2018 30

Male 50 Non-Smoker: 200% Rating Year 20 Current Scenario – 1% 800, 000 700, 000 BMO Insurance Advantag 600, 000 e 36% BMO Insurance Advantag 1, 100, 000 e 11% BMO Insurance Advantag 1, 050, 000 1, 000 500, 000 400, 000 950, 000 300, 000 900, 000 BMO Insurance Advantag e 6% e 8% 200, 000 850, 000 100, 000 800, 000 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Total Cash Value Non-Par Plan BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Total Death Benefit Source: Based on illustration software values as of January 29, 2018 31

Male 50 Non-Smoker: 200% Rating Year 40 Current Scenario – 1% BMO Insurance Advantag 1, 800, 000 BMO Insurance Advantag 1, 600, 000 1, 400, 000 2, 000 e 15% 1, 800, 000 1, 600, 000 e 41% 1, 200, 000 BMO Insurance Advantag e 12% e 32% 1, 400, 000 1, 200, 000 1, 000, 000 800, 000 600, 000 400, 000 200, 000 0 0 BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Total Cash Value BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan Total Death Benefit Source: Based on illustration software values as of January 29, 2018 32

Performance Bonus vs Dividend Rate

“Par” Dividend Very important to explain Often challenging for clients to understand • • Terminology (dividend interest rate, lapse assumptions, mortality gains, etc …) Methodology 34

Typical “Par Dividend” Calculation 35

“Performance Bonus” Calculation Simple to explain! Performan ce Bonus Performanc e Bonus Rate Guaranteed Cash Value Simple to understand! 36

Performance Bonus Rate Based on the Smoothed market performance Guaranteed never to be negative Declared Annually Guaranteed to be at least 5. 50% until April 30, 2020 37

Other features

Additional Riders on Joint Last Plans BMO Insurance ü Term Riders ü CI Riders Par Plan #2 Par Plan #1 ü Term Riders C CI Riders C Term Riders C CI Riders Keeping it simple … no need for multiple policies to get extra benefits! Non-Par Plan ü Term Riders C CI Riders 39

First Year Commission (FYC) Male 40 Non-Smoker, $1, 000 Coverage BMO Insurance Whole Life Plan Par Plan #1 Par Plan #2 Non-Par Plan $1, 000, 000 10 -Pay 20 -Pay with premium offset at years 11 -20 10 -Pay 15 -Pay with premium offset at years 11 -15 Deposit $42, 710 $51, 665 $56, 035 $51, 665 FYC $52, 960 $43, 946 $60, 798 $48, 165 109% 94% Coverage Pay Period 124% of Deposit (includes Max ADO for 10 years) 85% of Deposit (includes Max ADO for 10 years) of Deposit Source: Based on illustration software values as of January 29, 2018 40

The BMO Insurance Whole Life Plan Simple. Flexible. Guaranteed. 41

We’re here to help. Give us a call! WESTERN CANADA SALES OFFICE 1 -877 -1272 ONTARIO REGIONAL SALES OFFICE 1 -800 -608 -7303 QUEBEC-ATLANTIC REGIONAL SALES OFFICE 1 -866 -217 -0514 42

Information Disclaimer The information in this publication is intended as a summary of our products and/or services and may include projected values based on a set of assumptions. Actual results may not be guaranteed and may vary. Please consult the appropriate policy contract for details on the terms, conditions, benefits, guarantees, exclusions and limitations. The actual policy issued governs. Each policyholder’s financial circumstances are unique and they must obtain and rely upon independent tax, accounting, legal and other advice concerning the structure of their insurance, as they deem appropriate for their particular circumstances. BMO Life Assurance Company does not provide any such advice to the policyholder or to the insurance advisor. Registered trade-mark of Bank of Montreal, used under licence. Insurer: BMO Life Assurance Company. TM/® 43