For Producer Use Only. Not For Use with the Public Principal Life Insurance Company Why Principal Life for Individual Disability Insurance? & Disability

For Producer Use Only. Not For Use with the Public

Principal Life Insurance Company

Why Principal Life for Individual Disability Insurance?

&Disability Center

Disability Center is your “one stop shop” for DI.- Full back office support- Top DI products and compensation- Discounted plans available- Free training, Marketing materials, Personal web portals for DI- Niche products and occupations

888-677-6575 www.DisabilityCenter.com [email protected]

http://www.disabilitycenter.com/

mailto:[email protected]


Competitive Product Offering

• Individual Disability Income Insurance– To $15,000 MB Individual1; Up to $25,000 MB Multi-Life1

• Overhead Expense Insurance– To $50,000 MB reimbursement1

– Business Loan Protector Rider (new); for HH702 OE2

• Up to $10,000 MB; $1 million Aggregate P&I Loan repayment• Disability Buy-Out Insurance

– To $3 million* reimbursement for purchase of disabled owner’s interest• Key Person Replacement Insurance (new)2

– 2x times key employee’s earned income to $500,0001

• DI Retirement Security Insurance3 – These benefits are in addition to other coverage. Benefits paid to an irrevocable

trust which are invested according to the investment option chosen by the client. 15% of annual income to $4,125 per month individual pay, $5,325 employer paid.1

MB = Maximum Benefit1 – Additional guidelines apply.2 – Not approved in all states. For listing of state approvals, go to: principal.com/distateapprovas3 – Not available in California.


What is TeleApp?

TeleApp means:

• Improved policy issue time

• Less paperwork and follow-up

• Fewer APSs, full paramedical exams, PTIs, and inspection reports.

• Client answers questions only once

• Producer stays fully informed throughout the application process

• Direct access to Underwriters


TeleApp Process

• Complete the initial application

• Explain the interview process to your client

• Schedule the TeleApp interview by calling 1-888-TeleApp (1-888-835-3277) from 7 a.m. to 10 p.m. Monday through Thursday, or 7 a.m. to 7 p.m. on Friday. (Central Time Zone)

• Provide broker and client contact information

• Submit initial application and additional necessary forms to new business coordinator in your office

• Deliver policy to client and secure signatures to verify application information

• Return one set of signed applications to the home office


Sales Concepts and ProgramsSelect Professionals

4 Need to have business ownership to qualify.


Sales Concepts and ProgramsSelect Professionals

4 Need to have business ownership to qualify.


Sales Concepts and ProgramsSelect Professionals (cont.)

Underwriting considerations: A blood profile and urinalysis are required if the Benefit Update rider is selected for the following doctor occupations: first through last year resident/intern or medical student third and fourth year. | A blood profile and urinalysis are required if the monthly benefit amount is greater than $3,000.| Additional application paperwork for Overhead Expense and DI Retirement Security is required.


Sales Concepts and Programs

• 10% 5A Select Occupation Discount

– Actuaries, Architects, Attorneys, Certified Public Accountants (CPAs), Engineers, Executives (earning over $60,000), and Pharmacists

– Can be “stacked” with Principal Life’s other discount offerings of the 20% Multi-Life or 10% Association

– The Select Occupation discount applies to Individual Disability, Business Overhead, Disability Buy-Out, Key Person Replacement and DI Retirement Security insurance



• 20% Multi-life Discount

– 20% discount for three or more lives with a common employer*

– Unisex rates where available for Individual DI

– Discount is fully portable, and no list bill required

* 5 or more lives required in Ohio.



Association Benefits Member Benefits Producer Benefits

• Valuable benefit for existing members at a discount

• An incentive for enticing new members

• No cost to the association

• No administrative work required

• Materials and marketing support to promote program

• 10% Association Discount available

• Financial needs analysis by trained representative

• Quality coverage • Access to From Here to SecuritySM educational materials

• Access to multiple prospects in one setting

• Credibility afforded by an association’s endorsement

• Networking an relationship building potential

• Opportunities for new business and cross-sales

•10% Association Discount

Association offering may not be available in all states, for all products. For state approvals, go to: principal.com/distateapprovals. Not available in California.



• Simplified Sales Programs

– Streamlined underwriting decision in 48 hours once the applications and TeleApp interviews are completed and received – without income verification (for incomes less than $150,000/year; for most occupations) or routine medical requirements*.

– Up to $3,000/month benefit – Single Life– Up to $5,000/month benefit – Multi-Life – Up to $10,000/month benefit – Simplified OE– Up to $360,000 aggregate benefit – Simplified DBO

*Unless a significant and undisclosed medical condition is reported by MIB, significant medical information is derived from the TeleApp, or any other disability coverage has been issued or applied for on a non-medical basis. Urine/HIV test is required in Maine. This is not a guaranteed issue program; applications could be rated, ridered or declined. Subject to Issue & Participation limits and minimum premium requirement. Combined Simplified DI and Simplified OE benefits cannot exceed $10,000/month.



• The DI Solutions Center – Standard Issue Program

– Your one stop resource for multi-life case assistance (15+ lives)

– Provides standard coverage for an entire group

– Available for employer-paid or voluntary employee paid cases

– Discounts and coverage based on participating lives

– This program gives employees an opportunity to obtain coverage without medical evidence of insurability.

– If they leave their employer, the policy is portable with continued discounts


Attractive Compensation

Series 700 Compensation Shown; Compensation Differs for Solutions II (California)1 – For issue ages 65 and older, the first year commission rate is 4%.2 – During the Conditionally Renewable Period, a renewal commission of 4% will be paid to the servicing producer if the policy was issued after May 2006 regardless of FYC.3 – Renewals in years 11+ are contingent upon $5,000 of annualized disability commission in the prior year.


Please remember to abide by the company's policy on disclosure of compensation. You can obtain more information, as well as a sample disclosure form, at www.principal.com


Your income potential over 10 years


We have one goal in mind…to help you sell more.


Disability’s Triple Threat

Business owners face a triple threat

• Keeping a roof over their head

• Keeping their business’ doors open

• Keeping their business investment intact


Keeping a roof over their head – income protection

Individual Disability Income insurance


Income

$4,216,000

Home

$242,700

Car

$28,715

Keeping a roof over their head

1 – Auto Affordability Index, complied by Comerica Bank, February 20082 – Average sale price in United States, © 2009 National Association of REALTORS®

3 –Projected cumulative income, 35-year-old earning $6,250/month assuming 4% annual increase to age 65.



Ask clients:

• What would happen to your income?

• How would you maintain your lifestyle?

• Where would the money come from to pay for bills?

• What happens to your retirement savings and other financial goals?

• Do you have Group Long-Term Disability insurance in place? Are the benefits taxable?


Can your clients live on 42% of their income?

Chart based on $5,000 gross monthly income ($60,000 annually), with 60% Group Long Term Disability program, assuming a 30% tax bracket for Federal, State and FICA.

Few could live on 42% of their income.



Personal income protection so clients can:

• Provide for family if they become too sick or hurt to work

• Maintain their lifestyle without draining savings or business profits

• Protect a higher level of their income (in the event you have Group LTD insurance)

Individual Disability Income (DI) insurance


Keeping the business’ door open – risk management

Overhead Expense and Key Person Replacement Insurance


Keeping the business’ door open

Ask your clients:

• If you are unable to work, would your business be able to keep the doors open?

• How would business expenses get paid (rent, salaries, utilities, etc....)?

• Would you have to turn clients away?

• What would happen to your business if a key employee became totally disabled?


Chances of a Disability Lasting Three Months or Longer (Before Age 65)

Age 1 Owner 2 Owners 3 Owners

27 45.3% 70.0% 83.6%

37 40.4% 64.5% 78.8%

47 32.8% 54.8% 69.6%

57 19.6% 35.4% 48.1%

Based on Commissioner’s Individual Disability Table A – Equally Weighted, All Occupation Classes, Unisex

Keeping your business’ door open


Possible income sources

• Business partner

• Creditors

• Liquidate assets

• Personal savings

• Sell the business



With Overhead Expense insurance:

• Fixed business expenses are reimbursed

• No reliance on creditors

• Savings and investment plans aren’t jeopardized

• Foreclosure or liquidation can be avoided

• Premiums are tax-deductible



With Key Person Replacement insurance:

• Protects the business from the loss of a key employee

• Business pays for and is the owner of the policy

• Any benefits received can be used at the business’ discretion, but cannot be assigned to the key employee

• Helps demonstrate financial stability to creditors, shareholders and other stakeholders



Keeping the business investment intact – succession planning

Disability Buy-Out Insurance


Keeping the business investment intact

• Would you want to sell your share of the business?

• Would you want to buy out your partner?

• How would the price be determined?

• Where would the money come from?

• Is it guaranteed to be there when it’s needed?

Ask your clients, if you or one of your partners is disabled …


The disabled partner may:

• Become a drain on income while not contributing to the business

• Have different priorities for the business income and profits and may not want to reinvest profits

• Decide to let spouse or relative take over their role in the business


The healthy partner may not:

• Be able to pay the disabled partner an income and maintain the business

• Have funds to buy the disabled partner out

• Want to share business decisions with the disabled partners family


Disabled owner advantages

• Assures a definite price and buyer

• Financial future is no longer contingent on the business’s success


Healthy owner(s) advantages

• Avoids negotiation of price

• Assures complete and orderly transfer of ownership

• Retains control of the business

• Provides continuity and credibility for customers and creditors

Establishing a buy-sell agreement



Funding alternatives

• Current cash flow

• Establish a sinking fund

• Borrow the funds

• Disability Buy-Out insurance



Disability Buy-Out Insurance

• A written agreement that specifies when and for how much the buy-out will take place, and...

• is funded with the right amount of Disability Buy-Out insurance.


OE + DI + DI = 20% discount

A business owner purchases OE and employees purchase their own DI = 20% discount!

DBO + DBO + KPR = 20% discount

Two business owners purchase DBO policies and pay premiums for an employee’s KPR policy = 20% discount!

DI + DI + DI = 20% discount

Three individuals with a common employer purchase DI policies = 20% discount!

Provide peace of mind … at a multi-life discount

OE = Overhead Expense | DBO = Disability Buy-Out | DI = Individual Disability Income |KPR = Key Person Replacement

Multi-Life Discount may not be available in all states for all products. Ohio requires 5 lives.










Disability Center

Thank you!

Questions?

888-677-6575 www.DisabilityCenter.com [email protected]

Documents

For Producer Use Only. Not For Use with the Public Principal Life Insurance Company Why Principal Life for Individual Disability Insurance? & Disability