1 a partner you can trust. how do you cover overhead expenses in case of disability?
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A PARTNER YOU CAN TRUST.
How do you cover overhead How do you cover overhead expenses in case of expenses in case of disability?disability?
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Agenda
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Target market
Votre partenaire de confiance.
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Target market
> Self-employed workers
> Registered> Incorporated> Who must incur expenses in the exercise of their
profession
> Microentreprises
> Limited number of employees
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Target market
> Context
> Shareholder/owner must be active> Impact of the insured person on
> Company operations> Financial support provided> Company income
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Target market
> Example: a bakery
> 1 artisan baker> Some counter clerks> A delivery person
> If the artisan baker is disabled
> No production> No sales> No income
> Insured overhead expenses are payable
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Target market
> Example: a bakery
> 1 artisan baker> 2 assistant bakers> Some counter clerks> A delivery person
> If the artisan baker becomes disabled
> Nearly normal production> No reduction of income
> Insured overhead expenses are not payable
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Target market
> Other examples of microentreprises
> Professional firms> Financial security advisors> Real estate agents
> Graphic designers> Truck drivers
9Votre partenaire de confiance.
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Definition of overhead expenses
> A company or a self-employed worker has expenses to produce an income
> Fixed and recurring expenses
> Financial obligations
> Lease> Equipment rental, etc.
> Necessary expenses for functioning of office or business
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Covered overhead expenses
> Covers normal office expenses such as:
> Rent > Heat, electricity and cleaning > Telephone and Internet> Equipment rental and depreciation> Employee salaries (maximum 3)> Insurance premiums> Accounting services> Advertising fees
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Definition of covered overhead expenses
> Covers normal office expenses such as:
> Interest on business loans> Registration fees for professional associations> Other normal fixed and recurring expenses for proper
functioning of the office
> In proportion to the shares held
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Rent – at home
> Based on number of square feet used
> Eligible expenses
> $25 per sq. ft. per year
> Example:
> Occupation of 200 sq. ft. in residence for business> 200 x 25 = 5,000 divided by 12 = $417 per month
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Rent – outside of home
> Lessor
> Rent paid
> Owner
> Business taxes> Property tax> Interest on mortgage
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Non-eligible overhead expenses
> Principal insured’s salary during disability
> Disability insurance
> Any other person hired to replace the principal insured during disability
> Costs for goods, property, equipment, supplies, accessories, merchandise and devices
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Overhead expenses for automobiles
> Automobile must be essential to conduct work
> Expenses covered:
> Rental or interest and depreciation for a purchase
> Insurance> Registration > Driver’s licence
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Overhead expenses for automobiles
> Non-covered expenses:
> All fuel (gasoline, diesel, etc.)> All vehicle maintenance> Travel costs
> As a percentage of use for professional activities
> Tax returns or financial statements
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Practical advice
> Separate contract for
> Disability insurance> Overhead expenses
> Lessee, payor and beneficiary = Company
> Creditor insurance> Lessee, payor and beneficiary = Company
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Limitations
> As with disability insurance, it’s for insureds with the following characteristics:
> Employment categories 3A and 4A> With stable employment for at least two years> With a certain degree of expertise> Work up to 75% of time at home
> Minimum 60-day waiting period
> Work more than 75% of time at home> Minimum 90-day waiting period
20A partner you can trust.
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Needs analysis
> Documents necessary for analysis
> For a self-employed worker working at home> Income tax return> Personal budget
> For a microentreprise> Financial statement> Record of wages
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Needs analysis – general
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Needs analysis for farms
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Needs analysis for truck owners
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Needs analysis
> Available on Pyramide
> Available on EXCEL spreadsheet
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Solutions offered by ExcellenceSolutions offered by Excellence
Votre partenaire de confiance.
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Solutions offered by Excellence
> Universal coverage 24/7
> At work> At home> When practicing sports
> Non-taxable monthly benefits
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Solutions offered by Excellence
> Superior Program
> Accxel
> Acci-Jet
> Guaranteed issue
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Superior Program
> Eligibility
> Between age 18 and 59> Exercise gainful employment
> At least 8 months per year> At least 21 hours per week (1050 hours per year)
> Meet selection criteria> Be a Canadian citizen or live in Canada for more
than six months and meet certain conditions
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Acci-Jet
> Eligibility
> Between age 18 and 59> Exercise gainful employment
> At least 8 months per year> 21 hours per week (735 hours per year)
> Meet selection criteria> Be a Canadian citizen or live in Canada for more
than six months and meet certain conditions
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Accxel
> Eligibility
> Between age 18 and 59> No criteria for exercising gainful employment> Meet selection criteria> Be a Canadian citizen or live in Canada for more
than six months and meet certain conditions
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Solutions offered by Excellence
> Duration of benefits
> 24 months
> Waiting period
> 30 days > 30 days or more
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Benefits
Superior Program
Acci-Jet Accxel
Minimum $500 $500 $300
Maximum $6,000 $6,000 $3,000
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Solutions offered by Excellence
Type of coverage Superior Program
Acci-Jet Accxel
In case of illness and accident yes no yes
In case of accident only yes yes no
For muscle and ligament injuries yes yes yes
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> For the Superior Program and Acci-Jet
> Pricing based on risk of insured’s regular occupation> Occupations with a lower risk of disability
> Better rates
> List of occupations available in sales software
> No distinction by employment category for Accxel
Employment category
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> Employment category guarantee
> No changes after contract is issued> Limitations and exclusions are applicable for the
employment category at time of disability
Employment category
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> Available at all times
> Advantages:
> Decreases amount of premiums
> Criteria:
> Work outside of home 50% of time> Minimum 3 years experience with the same company> In charge of 5 employees or 5 years of experience> Income:
> $60,000 for 3A to 4A, otherwise $35,000
Upgrade of employment category (Superior Program only)
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Upgrade of employment category
> Not available for:
> Drivers> Fishermen> Daycare educators> Farm owners> Forest industry workers
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Premiums
> Two options:
> Level premiums until end of contract> Level premiums for successive 5-year periods
> Guaranteed renewal
> Premiums are not guaranteed
> Option to adjust premiums based on experience
> Waiver of premiums included
> Disability before age 60
> Deductible for income tax (expenses/business)
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Commissions – Superior Program
> Base
> First-year commissions are recoverable for 12 months
> Accelerated
> First-year commissions are recoverable for 24 months
1st year 50%
Renewal 15%
1st year 100%
Renewal 2.5%
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Commissions – Acci-Jet
> Basic
> First-year commissions are recoverable for 12 months
> Accelerated
> First-year commissions are recoverable for 24 months
1st year 45%
Renewal 12.5%
1st year 75%
Renewal 2.5%
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Commissions – Accxel
> Basic
> First-year commissions are recoverable for 12 months
1st year 50%
Renewal 17%
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Case studiesCase studies
A partner you can trust.
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Case #1
> Registered financial security advisor working alone at home
> Needs analysis
> Income tax return> Personal budget
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Case #1: Needs analysis – Business overhead expenses
> Registered financial security advisor working alone at home
Rent – at home
Total area in sq. ft. Allocation Monthly
Occupied space at $25/sq. ft. 2,000 10% $416.67
Rent – outside of home
Business condo Cost Frequency Allocation Monthly
Rent OR
Interest on mortgage A 100% -
Property and municipal taxes A 100% -
Business taxes A 100% -
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Case #1: Needs analysis – Business overhead expenses
> Registered financial security advisor working at home
Overhead expenses Cost Frequency Allocation Monthly
Salaries (if less than 3 employees)
- Total $50,000
- Owners/associates $50,000
- Eligible - A 100% -
Electricity (outside of home) - M 100% -
Telephone
- Home/office $52 M 70% $36.40
- Cellphone $75 M 100% $75.00
Internet $50 M 70% $35.00
Insurance premiums
- Home/office $378 A 10% $3.15
- Professional liability $789 A 100% $65.75
Maintenance $1,500 A 10% $12.50
Accounting services $200 A 100% $16.67
Licence fee $225 A 100% $18.75
Depreciation of material $500 A 100% $41.67
Professional association - 100% -
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Case #1: Needs analysis – Business overhead expenses
> Registered financial security advisor working at home
Automobile expenses
Cost Frequency Allocation Monthly
Purchase of vehicles
- Depreciation $
- Interest on loans $
Rental of vehicles $750 M 70% $525.00
Auto insurance $825 A 70% $48.13
Registration and driver’s licence $273 A 70% $15.93
TOTAL
Rent - at home $416.67
Rent – outside of home -
Overhead expenses $304.88
Automobile expenses $589.05
GRAND TOTAL $1,310.60
NECESSARY COVERAGE $1,300.00
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Case #2
> Incorporated financial security advisor who works in his firm outside his home with 2 assistants
> Needs analysis
> Financial statement> Record of wages
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Case #2: Needs analysis – Business overhead expenses
> Incorporated financial security advisor working outside of home with 2 assistants
Rent - at home
Total area in sq. ft. Allocation Monthly
Occupied space at $25/sq. ft. - 0% -
Rent - outside of home
Business condo Cost Frequency Allocation Monthly
Rent OR
Interest on mortgage $7,500 A 100% $625.00
Property and municipal taxes $5,500 A 100% $458.33
Business taxes $500 A 100% $41.67
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Case #2: Needs analysis – Business overhead expenses
> Incorporated financial security advisor working outside of home with 2 assistants
Overhead expenses Cost Frequency Allocation Monthly
Salaries (3 employees or less)
- Total $140,000
- Owners/associates $65,000
- Eligible $75,000 A 100% $6,250.00
Electricity (outside of home) $225 M 100% $225.00
Telephone
- Home/office $125 M 100% $125.00
- Cellphone $100 M 100% $100.00
Internet $75 M 100% $75.00
Insurance premiums
- Home/office $759 A 100% $63.25
- Professional liability $789 A 100% $65.75
Maintenance $125 M 100% $125.00
Accounting services $3,000 A 100% $250.00
Licence fee $225 A 100% $18.75
Depreciation of material $2,000 A 100% $166.67
Professional association $250 A 100% $20.83
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Case #2: Needs analysis – Business overhead expenses
> Incorporated financial security advisor working outside of home with 2 assistants
Automobile expenses
Cost Frequency Allocation Monthly
Purchase of vehicles
- Depreciation $10,000 A 70% $583.33
- Interest on loans $3,000 A 70% $175.00
Rental of vehicles - M 70% -
Auto insurance $825 A 70% $48.13
Registration and driver’s licence $273 A 70% $15.93
TOTAL
Rent - at home -
Rent – outside of home $1,125.00
Overhead expenses $7,485.25
Automobile expenses $822.38
GRAND TOTAL $9,432.63
NECESSARY COVERAGE PER ASSOCIATE $9,400.00
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Case #3
> Unincorporated trucker working alone
> Needs analysis
> Income tax return> Personal budget
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Case #3: Needs analysis – Business overhead expenses
> Unincorporated trucker working alone
Rent - at home
Total area in sq. ft. Allocation Monthly
Occupied space at $25/sq. ft. - 0% -
Rent - outside of home
Garage Cost Frequency Allocation Monthly
Rent OR
Interest on mortgage $1,200 A 10% $100.00
Property and municipal taxes $3,500 A 10% $29.17
Business taxes - A 100% -
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Case #3: Needs analysis – Business overhead expenses
> Unincorporated trucker working alone
Overhead expenses Cost Frequency Allocation Monthly
Salaries (3 employees or less)
- Total $75,000
- Owners/associates $75,000
- Eligible - A 100% -
Electricity (outside of home) $225 M 10% $22.50
Telephone
- Home/office $25 M 100% $25.00
- Cellphone $100 M 100% $100.00
Internet - M 100% -
Insurance premiums
- Home/office $759 A 10% $633
- Professional liability $756 A 100% $63.00
Maintenance - M 100% -
Accounting services $250 A 100% $20.83
Licence fee $375 A 100% $31.25
Depreciation of material - A 100% -
Professional association $250 A 100% $20.83
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Case #3: Needs analysis – Business overhead expenses
> Unincorporated trucker working alone
Automobile expenses
Cost Frequency Allocation Monthly
Purchase of vehicles
- Depreciation $17,500 A 100% $1,458.33
- Interest on loans $10,500 A 100% $875.00
Rental of vehicles - M 100% -
Auto insurance $825 A 100% $68.75
Registration $273 A 100% $22.75
TOTAL
Rent - at home -
Rent – outside of home $129.17
Overhead expenses $289.73
Automobile expenses $2,424.83
GRAND TOTAL $2,843.74
NECESSARY COVERAGE PER ASSOCIATE $2,800.00
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Case #4
> Microentreprise
> 3 partners (1/3, 1/3 and 1/3)> 4 employees
> Needs analysis
> Financial statements
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Case #4: Needs analysis – Business overhead expenses
> Microentreprise with 3 partners and 4 employees
Rent - at home
Total area in sq. ft. Allocation Monthly
Occupied space at $25/sq. ft. - 0% -
Rent - outside of home
Office Cost Frequency Allocation Monthly
Rent OR $2,500 M 100% $2,500.00
Interest on mortgage - A 10% -
Property and municipal taxes - A 10% -
Business taxes - A 100% -
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Case #4: Needs analysis – Business overhead expenses
> Microentreprise with 3 partners and 4 employees
Overhead expenses Cost Frequency Allocation Monthly
Salaries (3 employees or less)
- Total
- Owners/partners
- Eligible - A 100% -
Electricity (outside of home) $375 M 100% $375.00
Telephone
- Home/office $225 M 100% $225.00
- Cellphone $300 M 100% $300.00
Internet $275 M 100% $275.00
Insurance premiums
- Home/office $250 A 100% $20.83
- Professional liability $4,000 A 100% $333.33
Maintenance $250 M 100% $250.00
Accounting services $6,000 A 100% $500.00
Licence fee - A 100% -
Depreciation of material $5,000 A 100% $416.67
Professional association $2,500 A 100% $208.33
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Case #4: Needs analysis – Business overhead expenses
> Microentreprise with 3 partners and 4 employeesAutomobile expenses
Cost Frequency Allocation Monthly
Purchase of vehicles
- Depreciation - A 100% -
- Interest on loans - A 100% -
Rental of vehicles $3,000 M 70% $2,100.00
Auto insurance $2,450 A 70% $142.92
Registration $819 A 70% $47.78
TOTAL
Rent - at home -
Rent – outside of home $2,500.00
Overhead expenses $2,904.17
Automobile expenses $2,290.69
GRAND TOTAL $7,694.86
NECESSARY COVERAGE PER ASSOCIATE 2 500,00
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Questions?
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