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The Shoe Salesman
What is Critical Illness

   It Pays a Lump Sum Benefit on the
    Diagnosis of a Covered Condition

 Critical Illness Insurance was created
 to Remove Financial Stress so that the
 Person can Focus on Recovery

     It’s About Survival

 We believe Critical Illness is the best
 opportunity our generation will have in
 the insurance business

 Meets A Need Not Met by any Other
 Makes a Difference in People’s Lives
 No One Owns It - Everyone is a
 Sets You Apart
History of Critical Illness

 Developed by Dr Marcus Barnard
 Originated in South Africa in 1983
 Introduced in:
     England      1987
     Australia    1990
     Japan        1993
     Canada       1994
     US           1999
Successful In Every Country

 Takes 5-7 years before sales start to
 Sales Ideas are transferable
 20 years of Sales Ideas
Claims Experience
            UK Claims Paid
Age          Male        Female
Under 40     33%         45%
41-50        35%         35%
51-60        23%         14%
Over 61       9%          6%

Average Age of Claims Paid: 43
        Who Do You Know?
 Ask your clients:
    “Who do you know?”
       “Who do you know that’s had a heart attack,
        cancer or stroke?”
       “Who planned to be on that list?”
       “Who on your list could’ve used $25,000, $50,000
        or $100,000?”
       “How would they have used that money?”
      Medical Advances have changed our
      lives and are changing our world

Due to medical advancements:
   People are living longer
   More critical illnesses are being diagnosed
   People are surviving critical illnesses
   Survival has a price
Why Critical Illness Insurance Now?
Why there are more Critical Illnesses
such as Cancer, Heart Attack and
Strokes today?
Leading Causes of Death in
 Pneumonia                        12 %
 Tuberculosis                     11 %
 Enteritis                         8%

Source: The Wall Street Journal, 08/27/01
      People are living longer

 Average Life Expectancy
         1900 - 47.3
         2001 - 77.2

Source: National Center for Health Statistics 2002
 Lifestyles – Today We

  Diet
  Smoke (Some of Us)
  Work more
  Sleep less
  Rush

The Result: More Stress
     What are the odds?

In the United States
      Every 29 seconds, someone suffers a
       coronary event 1
      Every 45 seconds, someone suffers a stroke                        1

      About 1.3 million new cancer cases are
       expected to be diagnosed in 2003 2
 1 HeartDisease & Stroke Statistics - 2003 Update: American Heart Association
 2 2003 Cancer Facts & Figures, American Cancer Society
Critical Illness Insurance
Your chances of surviving are better than ever...

     2000 Heart and Stroke Statistical Update, American Heart Association
     2000 Cancer Facts & Figures, American Cancer Society
    Critical Illness Insurance

Surviving has a price...

                 Source: 2002 Cancer Facts & Figures, American Cancer Society
        Survival Has a Price
Indirect Expenses
    Loss of income for self and / or spouse
    Home modifications
    Experimental treatment
    Child care and domestic assistance
    Transportation and lodging for family members and
      caregivers during treatment
     Survival has a price

Critical illness insurance meets a need
 not met by:
  Medical Insurance
  Life Insurance
  Disability Income
Type of Critical Illness
 Rider On a Life Policy
 Stand Alone Health Policy
         Simplified Critical Illness

  Covered Conditions and Definitions
     Life-Threatening Cancer                      Alzheimer’s Disease
     Heart Attack                                 Paralysis
     Stroke                                       Renal (kidney) Failure
     Major Organ Transplant                       Coma
     (when registered with United                 Major Burns
     Network Organ Sharing/UNOS)

As defined by the policy. May vary by state. Exclusions & limitations apply.
         Simplified Critical Illness

  Pays 25% of Maximum Benefit
          When you are diagnosed or require:
                 Cancer in-situ
                 Bypass Surgery
          Pays 10% of the maximum benefit for

As defined by the policy. May vary by state. Exclusions & limitations apply.
 Return of Premium

Death Benefit
 If you die while your policy is in force,
    you can receive:
 100% of the premiums paid minus any
  claims or
 The benefit amount (if from a covered
 Optional Benefits

Return of Premium Rider
 In the event you survive and do not have a
    covered condition, you can receive
    100% of the premiums you’ve paid at
    age 75
 The Return of Premium rider provides
    increasing percentages beginning in the
    5th year.
  Optional Benefits
 Spouse Rider – can purchase any amount not to
  exceed primary insured
 Children’s Rider – amounts of $5,000 or $10,000
 Waiver of Premium – total disability, 6 month
  elimination period – retroactive benefits
 Accidental Death Benefit – any amount up to the
  maximum benefit amount
          Personal Needs Analysis:
 If you were diagnosed with cancer or suffered a
heart attack or stroke, would you want all or part of your
mortgage balance paid off? What amount would meet
your needs?                                                $
     In the event of a critical illness, would you want
      your credit card or other lines of credit paid in
      full? What amount would meet your needs?           $
     In the event of a critical illness, would you want
      to make sure that all of your other financial
      obligations are met? What amount would meet $
      your needs?
                             Total                        $
Underwriting – Simplified

 Must Answer Questions “No”
 Must Be Within Build Guidelines
Underwriting - Simplified

      Build Guidelines
Underwriting - Simplified

 Tobacco Question -
     Has the proposed insured(s) used any
      tobacco or nicotine during the past 12
Underwriting - Simplified
                   Family History
Have any two or more of the Proposed Insured’s natural
  parents, brothers or sisters, either living or deceased,
  been diagnosed with the same condition(s) from the
  following list:
 Heart disease, stroke, diabetes, kidney disease
  or breast cancer prior to age 60?
 Colorectal cancer or Alzheimer’s or Senile
  Dementia prior to age 75?
 Any other same cancer in both relatives prior to
  age 55?
Underwriting - Simplified

 Telephone Inspection
 Telephone Inspection every 25th App
Critical Illness
Covered Conditions
 Cancer                       Major Burns
   Heat Attack                Coma
   Stroke                     Deafness
   Major Organ Transplant (UNOS)
   Benign Brain Tumor         Kidney Failure
   Motor Neuron Disease       Blindness
   Advanced Alzheimer's       Aortic Surgery
   Heart Valve Replacement    Loss of Speech
Critical Illness
Covered Conditions
 Cancer in situ – 25% - $25,000
 Bypass Angioplasty – 25% - $25,000
Critical Illness

  Similar to Preferred Life
  Some Differences
Critical Illness

Mortality vs. Incidence
          Critical Illness
         Your client is not eligible for CI if there is a prior history of:
          Cancer (some exceptions)*
          Diabetes (insulin dependent or uncontrolled)
          Heart Disease, including heart attack, angina, vascular surgery or
          Major Organ Transplant
          AIDS, HIV+
          Alcohol Abuse, treated within past 2 years
          Drug Abuse
          Stroke or Transient Ischemic Attack (TIA)
          Kidney Failure or Disease (other than kidney stone)
          Cystic Fibrosis
          Hepatitis other than A                     Multiple Sclerosis
          Muscular Dystrophy                         Huntington’s Chorea
          Permanent Paralysis                        Systemic Lupus Erythematosus
          Alzheimer’s Disease                        Amyotrophic Lateral Sclerosis
*applicants with certain cancers, including skin cancers other than melanoma or certain
early state cancers, may still be eligible for coverage.
Critical Illness

Occupational Consideration
Financial Guidelines
 7 times earned income up to $250,000
 6 times earned income up to $500,000
 Nonworking spouse: 50% of working
  spouse limit up to maximum of $250,000
Critical Illness

Family History
Based on Immediate Family Members –
Natural Parents, Brothers or Sisters
Family History
Has any Immediate Family Member
 suffered from Cancer (specify type),
 Motor Neuron disease, Alzheimer’s
 Disease, or other hereditary disease
 prior to age 65?
How do you Sell Critical Illness

 Forget the Statistics
 Doctors and good medicine created the problem
 People survive today! 50 years ago they would
  have died
 A Doctor created the Solution
 You need to help the client with options to attach
  the dollars
      ex. Mortgage, replacement of income, etc.
      Personal Debt

Your existing Clients are the Best Prospects

Who Are Some Other Prospects?
Return of Premium Approach
 When was the last time your car insurance gave you
  money back when you didn’t have a claim?
 When was the last time your homeowners insurance
  gave you money back if you didn’t have a claim?
 I have a special type of insurance that gives you all your
  money back. Would that interest you?
Presenting Critical Illness

 Organized Presentation
 Who do you know?
 Are you covered?
 Claims examples
 Video
 Consumer PowerPoint
Make It Affordable
 If you knew you were going to be
 diagnosed with cancer in the next 6
 months, would you buy this?

How do you know you won’t?
Critical Illness
Target Markets
 Supplement to medical insurance
 Mortgage Protection
 Supplement to Disability Income
 Business Market
     Key Person
     Loan Protection
     Buy / Sell Funding
 Asset Protection
Mortgage Market

 Do you have mortgage insurance?
 Do you have the old kind of mortgage insurance or
  the new kind of mortgage insurance?
 What do you mean?
 The old kind of mortgage insurance pays off your
  mortgage only if you die. The new kind pays off your
  mortgage on death, but in addition, will pay your
  mortgage if you are diagnosed with cancer, have a
  heart attack or stroke.
Mortgage Market

 Only 3% of mortgage foreclosures are due to death.
  48% are due to a Critical Illness
 Would you rather have a heart attack and lose your
  house or have a heart attack and lose your
 You and your family will be able to stay in your
  house even if the the worst happens.
 If you had a goose that laid golden eggs, would you
  insure the goose or the eggs?
Critical Illness &
     Disability Income
 You need Disability Income
 Critical Illness does not replace DI
 You need DI especially if you are
  disabled because of stress or a bad
  Critical Illness &
       Disability Income
   How They Fit Together
                  A Car
 DI is the brakes
 CI is the air bag
 Critical Illness is there when you have
          the big crash with Cancer
Critical Illness &
     Disability Income
 Self Employed
 Supplement to Group DI
 Occupations Not Eligible for DI
What Would You Do If Your
 Employer Asked You To Take a
 40% Pay Cut?
After going through Chemo therapy
  treatments for 5 or 6 months, will
  you want to go back to work as
  soon as you can perform the
  material and substantial duties of
  your occupation?
Business Owners

 If you were diagnosed with Cancer, or
  had a Heart Attack, would there be more
  or less stress in your life as a Business
 What is your bank’s policy for people
  diagnosed with Cancer who have
  demand loans?
What Would Your Banker Do?

If He/She Heard That You Were
    Diagnosed with Cancer?
 Double Your Line of Credit
 Be Totally Unconcerned
 Withdraw Your Credit Completely
If you were diagnosed with Cancer today,
   what would happen to your business?
You need to believe that without
Critical Illness Insurance, all other
aspects of a Client’s financial and
personal plans could be

Alphonso Franco
Keys To Selling CI

   Organized Presentation
   Passion
   Start with your Existing Clients
   Make it Affordable
   Educate your Client on the need
   Developed by a Doctor
   Celebrity Stories
   Study
Do you want to Know the
Secret to selling Critical
 Critical Illness was only accepted by 3%
  of the market in England 10 years ago.
 Now it is promoted by 99% of the same

Peter Dodd
Pegasus Life
London, England November 1999
Good Meeting?

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