Critical illness insurance for small businessHelp protect your business from the financial impact of a critical illness.

The situationLike many small family businesses, your success and growth often hinges on a few key employees in important roles. How are you protecting the business from a critical illness diagnosis of a key employee who may require extensive time away from work to recover? Does your business have the resources to alleviate the financial impact from a loss of productivity and the capital strain of hiring additional staff?

In a competitive marketplace, it can also be challenging to retain key employees. To help keep these employees, how are you sweetening your benefit package?

Foresters Financial™ can help.

Critical illness insurance for a small business may protect your business from the financial impact of the absence of key employees. Forester Live Well Plus1 critical illness insurance can be an affordable solution with valuable built-in features and optional riders to customize coverage.

In addition, Foresters members are eligible for a wide range of complimentary member benefits2 that they can use from day one to make their lives better.

How the insurance works � Family-owned incorporated business is the owner of a Live Well Plus critical illness insurance policy.

� The business is the beneficiary. � The key employee is the insured and Foresters member. � Business pays the premiums for the coverage. � A Return of Premium on Surrender or Expiry rider may be added to the Live Well Plus policy if the business wishes to offer the key employee a retention bonus. - As the benefit under this rider is paid to the business as the policy owner, involve a lawyer to prepare an agreement between the business and the key employee regarding the payment of this benefit amount from the business to the employee.3

� If a benefit is payable due to the employee being diagnosed with a covered critical illness, the business receives the benefit as a lump-sum payment.

� If no critical illness claim is made before the policy is surrendered or expires, some of the premiums may be refunded as described in the policy.

Benefits of this approachCritical illness insurance for small business can help provide peace-of-mind.

Business owner:

� In the event the insured employee is diagnosed with a covered illness, funds may be available to help: - Ensure business continuity - Offset loss of revenue due to the absence of a key employee

- Hire and train new staff - Reassure creditors that the business is financially sound

� Built-in Return of Premium on Death may pay the business a benefit equal to the eligible premiums if the insured dies.

� Return of Premiums on Expiry or Surrender rider provides an affordable way to offer key employees a retention bonus.

Key employee (insured):

� Insured, as a member, has access to the many benefits of Foresters membership, which they can enjoy right away and for as long as the policy is in place.

� Reduce the stress of trying to return to work too soon, allowing time to fully recover.

� The Return of Premiums on Expiry or Surrender benefit grows over time and may provide an incentive to stay with the business.

� Insured and their family may access Advance Medical’s Expert Medical Opinion Program,4 which provides a second opinion on medical issues from some of the world’s leading experts.

Features of Live Well Plus � Covers 25 defined conditions with coverage up to $2,000,000. � Choice of 3 terms: Term 10, Term 20 and Term to Age 80. � No policy fee. � Built-in Return of Premium at Death for no additional premium. � No paramedical exam or lab work required for ages up to 65 with coverage of up to $100,000.5

� Non-Life-Threatening Illness Benefit: May provides a lump sum payment of 15% of the benefit, up to $50,000, in the event of a defined non-life-threatening illness.

� Optional riders include Return of Premium on Surrender or Expiry, Disability Waiver of Premium and Juvenile Critical Illness.

Business ownership of critical illness insurance

Calvin is the president of a small family-owned incorporated business. He hired his cousin Jason to manage the company’s IT infrastructure five years ago. Jason, now age 44, has become an essential employee of the business. Calvin is interested in strategies to reduce the risk of Jason leaving the company for a competitor.

Step 1During an annual meeting with his life insurance advisor, Calvin mentions how crucial Jason has become to the company. The advisor explains the concept of critical illness insurance for small businesses and Calvin immediately sees the benefits of this approach.

Step 2Calvin arranges a meeting with his advisor and Jason. The advisor explains the concept to Jason and outlines the key features of Live Well Plus. Jason likes the idea and Calvin offers to fund a Live Well Plus Term 20 policy with a benefit of $250,000 and Return of Premium on Surrender or Expiry. The business will be the owner of the policy and the payor of the annual premiums of $3,770 to Foresters for the first 20 years (annually renewable thereafter at the renewable premium rate).

Step 3Calvin and Jason meet with a lawyer to prepare an agreement with the details under which an amount equal to the Return of Premium on Surrender or Expiry benefit received by the business will be paid by the business to Jason.

Step 4As a Foresters member, Jason has access to a wide range of benefits he can use right away. He can use LawAssure6 to help prepare a will. His children can apply for Competitive Scholarships7 to help cover the cost of higher education. Jason and his wife can also apply for community grants of up to $2,000 to make a difference in their community.

Step 5After 20 years, the policy comes up for renewal. Calvin can opt to renew the policy, at the renewal premium rate, without having to provide Jason’s evidence of insurability. Calvin renews the policy each year for 5 years.

Step 6At the end of those 5 years, Jason decides it is time to retire. Calvin surrenders the policy and meets the policy requirements for the business, as the policy owner, to receive under the policy a lump sum payment of $145,660, which the business pays to Jason as part of their arrangement.8

Case study

Policy Key Employee Business

YearCumulative Premiums

Return of Premium on

Surrender

Internal Rate of Return on

Surrender

Critical Illness Benefit

Internal Rate of Return on

Critical Illness Benefit

Return of Premium on

Death

Internal Rate of Return on

Death

20 $75,600 $41,580 3.47% $250,000 14.18% $75,600 4.32%

21 $96,895 $58,137 4.65% $250,000 12.74% $96,895 4.73%

22 $118,190 $82,733 6.31% $250,000 11.40% $118,190 4.96%

23 $139,485 $97,640 6.42% $250,000 10.14% $139,485 5.06%

24 $160,780 $120,585 7.04% $250,000 8.95% $160,780 5.08%

25 $182,075 $145,660 7.52% $250,000 7.83% $182,075 5.04%

1 1 Underwritten by Foresters Life Insurance Company. Underwritten by Foresters Life Insurance Company. 2 2 Foresters member benefits are non-contractual, subject to benefit specific eligibility requirements, definitions and limitations and may be changed or cancelled without Foresters member benefits are non-contractual, subject to benefit specific eligibility requirements, definitions and limitations and may be changed or cancelled without notice or are no longer available. notice or are no longer available.

3 3 Foresters, their employees and life insurance representatives, do not provide, on Foresters behalf, legal or tax advice. Prospective purchasers should consult their tax or Foresters, their employees and life insurance representatives, do not provide, on Foresters behalf, legal or tax advice. Prospective purchasers should consult their tax or legal advisor on the nature, consequences and structure of this agreement. legal advisor on the nature, consequences and structure of this agreement.

4 4 This Program is provided solely by Advance Medical Inc., subject to eligibility requirements and limitations and may be changed or cancelled at any time without notice. This Program is provided solely by Advance Medical Inc., subject to eligibility requirements and limitations and may be changed or cancelled at any time without notice. This benefit is not part of the policy. This benefit is not part of the policy.

5 5 Insurability depends on answers to medical and other application questions and underwriting searches and review. Insurability depends on answers to medical and other application questions and underwriting searches and review. 6 6 LawAssure is provided by Epoq, Inc. Epoq is an independent service provider and is not affiliated with Foresters. Not available in Quebec, the Yukon, the Northwest LawAssure is provided by Epoq, Inc. Epoq is an independent service provider and is not affiliated with Foresters. Not available in Quebec, the Yukon, the Northwest Territories and Nunavut. LawAssure is not a legal service or legal advice and is not a substitute for legal advice or services of a lawyer. Territories and Nunavut. LawAssure is not a legal service or legal advice and is not a substitute for legal advice or services of a lawyer.

7 7 This program is administered by International Scholarship and Tuition Services, Inc. Eligible members, their spouse, dependent children, and grandchildren may apply This program is administered by International Scholarship and Tuition Services, Inc. Eligible members, their spouse, dependent children, and grandchildren may apply subject to the eligibility criteria. Please visit https://www.foresters.com/en-ca/foresters-difference/scholarships for further details. subject to the eligibility criteria. Please visit https://www.foresters.com/en-ca/foresters-difference/scholarships for further details.

8 8 This payment may be subject to taxation based on the nature of the legal agreement or applicable tax laws. This payment may be subject to taxation based on the nature of the legal agreement or applicable tax laws. 9 9 Foresters Lifelong Learning Program is administered and delivered by The Training Company Inc. Foresters Lifelong Learning Program is administered and delivered by The Training Company Inc. 10 10 Currently available to eligible members with an in-force certificate having a minimum face value of $10,000 or if an annuity, a minimum cash value of $10,000 or a Currently available to eligible members with an in-force certificate having a minimum face value of $10,000 or if an annuity, a minimum cash value of $10,000 or a

minimum contribution of $1,000 paid in the previous 12 months. Certificate includes an in-force individual policy or annuity offered by The Independent Order of minimum contribution of $1,000 paid in the previous 12 months. Certificate includes an in-force individual policy or annuity offered by The Independent Order of Foresters or eligible products issued by Foresters Life Insurance Company. Foresters or eligible products issued by Foresters Life Insurance Company.

11 11 Governance rights are available to voting members only.Governance rights are available to voting members only.

Foresters Financial, Foresters, and Helping Is Who We Are are trade names and/or trademarks of The Independent Order of Foresters (a fraternal benefit society, Foresters Financial, Foresters, and Helping Is Who We Are are trade names and/or trademarks of The Independent Order of Foresters (a fraternal benefit society, 789 Don Mills Rd, Toronto, Ontario, Canada M3C 1T9) and its subsidiaries. NC246 789 Don Mills Rd, Toronto, Ontario, Canada M3C 1T9) and its subsidiaries. NC246

505540 CAN 06/21505540 CAN 06/21

Since 1874, Foresters Financial has been providing socially responsible financial services to individuals and families. Foresters is a purpose-driven organization that exists to enrich family and community well-being and offers insurance products to over three million members and clients in Canada, the US and the U.K.

Through our unique member benefits program, we empower our members to live richer, fuller lives.

Well-being benefits � LawAssure, an online document preparation service to help take care of important matters including writing a will, making a power of attorney and preparing a healthcare directive.

� Lifelong Learning,9 an easy-to-use learning library offering a diverse range of over 200 online courses. � Monthly orphan benefit payments10 for orphans under 18 years. � Interest-free terminal illness loans of up to 75% of the life insurance. � Complimentary fun family events.

Community and volunteer benefits � Member-sponsored community involvement events. � Opportunities to lead and organize events and activities as an elected Foresters Council member.11

� Complimentary fun family events.

Grant and scholarship benefits � Community grants provide up to $2,000 to organize community activities in your area. � Competitive Scholarships to help cover the cost of higher education. � Orphan scholarships10 for post-secondary tuition and related costs.

Learn more at foresters.com or talk to your life insurance advisor.

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