This document discusses challenges related to increasing life expectancy and proposes solutions for long-term income protection. It notes that people are living and working longer. Conventional insurance often only provides income replacement until age 65 but many will live decades longer. The document introduces Myriad's "Longevity Protectors" which extend income protection benefits later in life through benefit increases. This comprehensive solution helps ensure clients are protected against outliving their savings.

1. Redefining income protection in the 21st century

2. Agenda Living longer working longer Life expectancy of the disabled Financial planning implications Unique Myriad solution Opportunities

3. Many of us have been sold an unrealistic vision of retirement

4. But most of us cannot afford to spend a third of our lives on holiday

5. The history of retirement A relatively new concept Work-until-you-die model until late 19th century In the 1880’s, more than 75% of men over 64 still worked Half of 85-year olds still worked

6. The history of retirement Retirement invented in 1898 by Otto von Bismarck Made possible by the move from farm to factory Retirement age was 70, well beyond the average life expectancy of 44 then Changed in 1925 to 65 Has not changed despite increase in life expectancy

7. Life expectancy at 65 Life expectancy at 65, male, years 1940 2007 France 9.90 18.15 United States 11.94 17.52 Britain 10.84 17.40

8. Increasing life expectancy the main threat to comfortable retirement. What are we to do?

9. Experts agree that the only solution to a comfortable retirement is to work longer.

11. Net investment return 8%

13. Impact if you retire later Retire at 75% of income Live until age 85

15. Net investment return 8%

17. We just don’t want to listen!

18. Working longer - the double-whammy solution.

19. Retirement age trends Early retirement trend is being reversed Rich countries have no choice but to raise the retirement age Social security, pension deficits Falling support ratio Retirement age heading towards 70 Trend should spill over to South Africa

20. Hiring granny Knowledge-based economy Healthier bodies Animal spirit still there 55-64s launched more businesses than 20-34s Advantages of older employees Decades of experience and knowledge Repositories of company values People skills Lower levels of absenteeism

21. Hiring granny Retirement as a process, not an event Accommodating older workers Flexible hours Job sharing Telecommuting Just-in-time workforce Mentoring

22. Stats, expectations, predictions 1/3rd of Americans pursue second career after retirement Half expect to work until their 70s Number of workers aged 65 and over predicted to soar by 80% by 2016 South African labour force participation rate of males 65+ 1997: 10% 2007: 32% Boom in SMEs

23. “A new life stage is emerging between midlife and retirement”

24. Irving Kahn, 105 and Helen Reichert, 109Brother and sister from New York City; Kahn goes to his financial-services office daily, and Reichert enjoys movies. A recent favourite:Iron Man.

25. MiemsSwanepoel, 76, CEO MADventure, Cape TownTries something new every 5 years. Going hiking in the Peru next year

27. The solution: work longer

28. But what if?

29. Case study Kelly earns R20 000 She starts saving 15% from age 30 Life expectancy at 70 in 2050: 100 years If she works until age 75, she will receive 75% of her salary if she lives until 100

30. Case study (continued) She insures 100% of her income up to age 65 If she becomes disabled, she will only receive 50% of her salary after age 65 (assuming she lives until age 90)

31. Life expectancy of the disabled

32. Life expectancy of the disabled Some disabilities have little impact on life expectancy, e.g. Limb impairments Spinal cord injuries These injuries typically accident related (⅓ rd of Momentum’s claims) Other disabilities are as a result of illness And are impacted by medical technology Life expectancy improves daily

33. Major claim causes Musculoskeletal 36% Mental and behavioural 13% Cancer 11% Cardiovascular 10% Other 30%

34. Likelihood of survival to age 75

35. Likelihood of survival

36. What are the chances Likelihood of becoming disabled before 65 Likelihood of surviving to age 75 The perfect insurable risk

37. Becoming disabled in an era of exponentially increasing longevity may be your biggest financial risk.

38. Financial planning implications

39. How long do you assume your clients will live with a disability?

40. How much should your disabled clients withdraw from their capital annually?

41. How do you ensure that clients are protected against the risk of outliving their capital?

42. Are lump sums still appropriate considering the long term need?

43. Are lump sums still appropriate? The money illusion: Millionaire vs middle class Client may go on a spending spree Even if not… For the same premium as an Income Protector, how long will a lump sum last you?

44. Are lump sums still appropriate? Case study: 40 year old male non-smoker, best rates Income of R40 000 Insures 75% of income to age 65 IP premium is R630 Same premium could buy lump sum cover of R3.9m If invested, lump sum will only get the client half way to retirement!

45. Settling debt Lump sum vs. income Lump sum advantage – no further interest payable Still a place in financial planning

46. The problem with the conventional way 100% replacement only up to age 65 Extra working years lost Selection risk cause insurance to lag the trend Conundrum: disabled client may have to rely on their own capital for decades after income protection payouts cease

47. Unique Myriad solution

48. Why Myriad? Comprehensive lump sum solutions Market-leading income protection benefits 100% solution on temporary and permanent disability Best of sickness and loss of income Built-in impairment and illness events Partial claim upgrade Claim increase booster

49. Why Myriad? Market share Claims success stories Launch of the Longevity Protectors

50. Longevity Protector case study 1 John, age 35, takes out an Income Protector of R22 500 with a 5% benefit increase. R6 million* R6 million* Claim R22 500 pm *Five yearly payouts in real terms as at age 65 Age 35

51. Longevity Protector case study 2 John, age 35, takes out Death Benefit and Comprehensive Disability Benefit of R1 million with a 5% benefit increase. R200 000 in real terms R200 000 in real terms Claim R1 million Age 35

52. “10% extra premium extends income protection by up to 25 years”

53. Opportunities

54. Opportunities Use income benefits for long term, lump sums for once off Extend expiry age to age 70 Longevity protection