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Frequently Asked Questions &
Other Important Terms

GLWB (Guaranteed Lifetime Withdrawal Benefit) program:
Also, at times, referred to as GMWB, (Guaranteed Monthly Withdrawal Benefit) program. This program, as outlined in the first few pages of the appendix, provides a known amount of income in a known time frame. For each year that there are no withdrawals from the plan (RRSP), the respective company (i.e. Desjardins, Empire, Manulife, Transamerica) credits a 5% NOTIONAL bonus to the figure that your income will be based on in future years. It is to be clearly noted that in no way is the notional value to be perceived as a cash or market value. In other words, while the notional value may be stated in the report as $11,500, the market value may be significantly different than that, either higher or lower. Should the account be redeemed, you will receive the market value minus any applicable DSC (deferred sales charges).

DSC (Deferred Sales Charges):
DSC apply for up to 7 years from date of deposit(s). Therefore, if a deposit is made today a DSC schedule of up to 7 years applies to that deposit. Any subsequent deposits made have their own DSC schedule of up to 7 years associated with them but do not affect any other prior deposits made. Once the DSC schedule for the respective deposit expires, there are no other related sales charges.

Market Volatility:
Although cashable on any business day, funds invested in the markets are considered to be long-term investments and their day-to-day value will fluctuate during short-term periods. Past performance of market performance is not indicative of future performance and therefore cannot be guaranteed. While GLWB's/GMWB's have maturity and death benefit guarantee dates, they are not guaranteed on a day-to-day basis, prior to such dates. (See the information folder and contract related to the GLWB/GMWB for more details. This document will be given to you once you proceed with your investment into the GLWB/GMWB.)

Rounding of Numbers:
For purposes of easy reading, the numbers contained in this report have been rounded to the nearest dollar. Numbers related to monthly expenses have been rounded up. Numbers related to future income and/or savings have been rounded down.

Why are payment(s) shown as monthly figures?
For easy reading and referencing all payment(s) are expressed as monthly. The stated payment in this report has been calculated as outlined below for each respective payment method:

- bi-weekly payment x 26 payment periods / 12 months
- weekly payment x 52 payment periods / 12 months
- semi-monthly payment x 24 payment periods / 12 months
- monthly payment is simply stated as is

History shows that most people will refinance their mortgage and other debts no less than twice in a ten-year period of time and yet they will strain their monthly cash flow attempting to make their minimum payment in an effort to pay off their mortgage in less than 25 years. Given the current interest rate environment, the amortization has been stretched out as far as possible, (i.e. 30 years). With a lower monthly payment associated with a longer amortized mortgage there is less strain on your monthly cash outlay thus allowing the ability to redirect monies to Grow you assets, Protect you, your family, your money and your estate and Save you strain on your monthly cash outlay.

Given that at times the GPS System for Money™ may state a consolidation of multiple consumer debts, often including car loans, the benefit of a longer amortization is further realized as it greatly decreases your monthly cash outlay even more.

Why Consolidate Car Loans into a Mortgage?
As stated above, a longer amortization results in a smaller monthly payment and given that car payment(s) are generally only calculated over 7 years or less, their respective payment(s) are significant. While it is argued that interest is being stretched out over many more years, the entire picture must be taken into account. Meaning, when consideration is given to all the excess interest being charged on short term/consumer debts and the high minimum payment(s), the savings can result in the equivalent amount (of a car loan) being paid off in a shorter period of time than otherwise may have been.

Calculation Method of Interest Paid on Long Term Debt:
Interest on long-term debt is calculated as it is on a typical mortgage calculation – as the debt decreases per payment, the interest charged adjusts to the new balance.

Calculation Method of Interest Paid on Short Term/Consumer Debt:
Given multiple variations of offers by the many different consumer-type loans, (i.e., no interest for 6 months), difference between interest charges for cash advances and purchases and different repayment structures, (i.e. 1% of balance per month, 3% of balance per month, etc), interest paid is calculated as simple interest and does not adjust. Simply put, $10,000 at 19% results in $1,900 per year in interest being charged/paid.

Gross Decrease in Monthly Cash Outlay:
The Gross decrease in your monthly cash outlay is the difference between two factors:
- The first factor consists of your total current monthly payment(s) to carry your long-term and short-term debt plus any current insurance premiums, which will be replaced with the revised scenario.
- The second factor consists of your new monthly payment(s) to carry your revised long-term and short-term debts.
- NOTE: It does not take into account your new Universal Life insurance policy planned deposits, also known as the Ultimate Savings Plan™ (USP™).

Total Interest saved over remaining term:
This is the amount of interest saved, in consideration of the above noted calculation methods, between current debt vs. new debt.

Tax Savings vs. Refund:
A refund is money paid back to you for an overpayment of taxes. Tax savings, while also may be in the form of a refund, do not necessarily mean that money will be “paid back to you”, if you have not paid enough taxes. Savings simply are a reduction in taxes that are otherwise owed.

Equity at work:
This is increased debt. Better stated, it is repositioned equity. The GPS System for Money™ encourages repositioning otherwise lazy equity and putting it to work.

USP™ (Ultimate Savings Plan™) is a universal life insurance policy that consists of both an insurance component and an investment component. The illustration for the USP™ illustrates 20 years of deposits. The reason; given that most people will have their mortgage for 20 years, if not more, it is encouraged to make deposits into the USP™ to increase the investment component for future use. Deposits can be for a shorter period of time. Values will be reflected accordingly.

USP™ Deposits:
Made with a portion of your gross monthly savings. Note, this is utilizing money that would have otherwise been paid in excess interest and/or taxes.

Shuttle Account Value inside of the Universal Life Insurance policy (USP™)
This account is where monies from excess deposits and/or investment performance over and above the allowable portion that can be sheltered from tax are moved to. These monies are subject to possible taxation. If there is any balance in the Shuttle account, it is transferred back out of it when there is taxation room available inside of the tax exempt portion of the policy. For further detailed explanation, see the actual life insurance policy upon delivery.

Associated fees:

- Mortgage Penalty:
You, the client, have provided the mortgage penalty shown in the report. If there is any discrepancy in the amount shown and the actual amount charged, please advise the presenter of this report.

- Approximate Appraisal & Legal Fees;
When doing a refinance there could be appraisal fees of ~ $400 and legal fees of ~ $1,000 associated with doing so.

- How is The GPS System for Money™ Fee Expressed?
The GPS System for Money™ fee is expressed as a percentage of your total gross guaranteed results. It is expressed this way because your true benefit is the gross result. After related expenses, you are still ahead. Even if the net result is minimal, you have successfully repositioned your equity from your house, a non-eatableTM asset, to your RRSP, an eatableTM asset. Additionally, you have secured an Ultimate Savings Plan™ (USP™), which is not only an eatableTM asset for future years; it also provides protection for you, your family, your money and your estate.

Canada Mortgage and Housing Corporation (CMHC):
CMHC protects the lender in case of mortgage default by the borrower. This amount is added to the approved mortgage amount. Note however, that the CMHC amount is included in the stated new mortgage amount, if applicable. CMHC is only applicable for mortgages that are 80% LTV or more.

Tax on CMHC:
You, the client, pay the tax on CMHC. It is not included in the mortgage amount. The lawyer will take this from the mortgage proceeds upon closing.

Total Net Guaranteed Results:
This value is expressed as an after-tax figure and is net of any and all associated expenses/fees.

Total Net Monthly Savings:
This amount is after consideration is given to the gross decrease in monthly cash outlay described above minus the planned monthly deposits into the USP™.

Mortgage Payment Excludes Property Taxes:
Both the current mortgage payment and the new mortgage payment exclude property taxes.

Taxes on RRSP/RRIF Withdrawals:
Note that RRSP/RRIF withdrawals are fully taxable. Upon death, taxes will be owed on the value of the RRSPs/RRIFs. Taxes on RRSPs/RRIFs are delayed until the death of the surviving spouse if married or common law. Proper Estate Planning can greatly aid in minimizing, if not avoiding, such taxes.