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(Association Name) Individual Disability Insurance Association Program

(Association Name) Individual Disability Insurance Association Program. (Name) (Title). Importance of Disability Coverage Products Available Benefits to Your Association Program Guidelines Promotion & Enrollment Next Steps. Agenda. Importance of Disability Coverage.

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(Association Name) Individual Disability Insurance Association Program

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  1. (Association Name) Individual Disability Insurance Association Program (Name) (Title)

  2. Importance of Disability Coverage Products Available Benefits to Your Association Program Guidelines Promotion & Enrollment Next Steps Agenda

  3. Importance of DisabilityCoverage

  4. Over their careers, workers are three and a half times more likely to be injured and need disability coverage then they are to die and need life insurance (Source: Health Insurance Association of America, 2000) How Important is Individual Disability Insurance Coverage?

  5. A person’s chances of becoming disabled prior to age 65 are higher than most people would expect. Chances of a Disability lasting 90 days or longer* What are the Chances? *Commissioners Individual Disability Table B

  6. 13% own an individual disability income (DI) insurance policy 40% believe they do not have adequate disability protection 59% feel very/somewhat unknowledgeable about DI Who Needs It? A recent employee survey of Principal Life’s small-to-medium sized business clients, indicated:

  7. Successful Financial Strategy

  8. Products Available – • Disability Income

  9. Cover daily personal expenses such as: Mortgage or rent Car payment(s) Utilities Groceries What is Disability Income(DI)?

  10. Non-cancelable Guaranteed renewable Disability Income Insurance

  11. Important part of any DI policy Defines when a person becomes eligible for benefits Definition of Disability

  12. During the Your Occupation Period, the insured is unable to perform the substantial and material duties of his or her occupation and is not working. After the Your Occupation Period, the insured must be unable to work in any occupation he or she is reasonably suited to by his or her education, training or experience, and is not working. Principal Life’s Definition of Disability

  13. Built into base policy 2 year Available protection for additional premium 5 year To Age 65 To Age 67 To Age 70 Your Occupation Benefit Periods

  14. Automatic Increase Option and/or Benefit Update Residual Disability Benefit Catastrophic Disability Benefit Cost of Living Adjustment Mental/Nervous Substance Abuse (MNSA) Disorder Key Policy Riders

  15. Short Term Residual Disability Benefit Recovery Benefit Extended Total Disability Benefit Regular Occupation Additional Key Riders

  16. Products Available – Overhead Expense (OE) and Disability Buy-Out (DBO)

  17. Chances of Disability Lasting 3 Months or Longer (before age 65) Overhead Expense & Disability Buy-Out

  18. Reimburses a business owner for covered business Helps ensure a business can remain open and the owner can either: return to a financially sound business; or sell a business that has not depreciated because of the owner’s disability. Why Overhead Expense?

  19. The disabled client is reimbursed for expenses paid. Premiums are tax deductible. (Rev. Rul. 55-264, 1955-1 C.B. 11) Benefits are reportable as income but business expenses are deductibles(Rev. Rul. 55-264, 1955-1 C.B. 11) How Does OE Insurance Work?

  20. Buy-sell agreement ensures the orderly transfer of a business interest in the event of the business owner’s death or disability. Most business owners establish a buy-sell agreement but fail to fund it – or only fund it for an owner’s death. Disability Buy-Out (DBO)

  21. The objective of DBO insurance is to: provide a funding solution for the buy-sell agreement in the event disability. reimburse money paid for the purchase of a disabled owner’s interest in the business in the event of a long-term disability. Why Disability Buy-Out?

  22. The non-disabled policy owner or the business is reimbursed for the buy-out expense. Premiums are non-deductible. (IRC 265; Rev. Rul. 66-262, 1966-2 C.B. 105) Benefits are received income tax-free(IRC 104(a)(3); Rev. Rul. 66-262, 1966-2 C.B. 105) How Does DBO Insurance Work?

  23. III. Benefits to Your Association

  24. A valuable benefit for existing members at a discount An incentive for enticing new members No cost to your association No administrative work required by your association to enroll members Promotional materials and marketing support to promote the program to members Benefits to Association

  25. 56% of members cite offering life and health insurance benefits as a way to attract new members. The most frequently cited reason for sponsoring life and health insurance programs is to lower premium costs for members 62% of participants in life and health insurance programs expressed satisfaction in the programs provided by their associations. Benefits to Your Association According to the America Society of Association Executives: Source: 2003 American Society of Association Executives Survey

  26. 10% discount available. Top-quality coverage from a company that provides exceptional customer service Free education information and materials Financial needs analysis by trained financial representative Excellent claims handling and service Benefit to Members

  27. IV. Program Guidelines

  28. 10% Association discount 10% discount if your members are in a select occupation: Actuary, Architect, Attorney, CPA, Engineer, Executive & Pharmacist 5% to 10% MNSA discount and rider is required (on DI only)* Discounts totaling 10% to 30% * Not available in Texas Program Guidelines - Discounts

  29. Fully underwritten (Ages 18-60) Maximum benefits available and all riders available Simplified (Ages 18-50) $2,500/month maximum benefit Limited benefit amount and riders Underwriting and medical requirements: 48 hour turnaround No routine medical requirements or financial verification required Program Guidelines – Issue for DI

  30. Fully underwritten (Ages 18-60) Maximum benefits available and all riders available Simplified (Ages 18-50) $6,000/month Total Benefit Underwriting and medical requirements Same as for DI, (DBO requires financial verification) Program Guidelines – Issue for OE and DBO

  31. V. Promotion and Enrollment

  32. Pre-Promotion Activities Group Activities One-on-One Enrollment Ongoing Promotion Promotion & Enrollment

  33. VI. Next Steps

  34. Provide endorsement letter Develop a 6-12 month marketing plan Provide a membership roster Next Steps

  35. Policy rider descriptions are not intended to cover all restrictions, conditions or limitations. Refer to rider for full details. Riders are subject to state availability. Riders may be subject to an additional charge. Disability insurance has certain limitations and exclusions. For costs and complete details of coverage, contact your Principal Life financial representative.Disability insurance is issued by Principal Life Insurance Company, Des Moines, IA 50392. Policy Form Numbers: HH750, HH702, HH703 Rider Form Numbers: HH736, HH704, HH753, HH757, HH758, HH756, HH752, HH759

  36. Thank you.I look forward to working with you. Strengthin numbers Power ofprotection Approval #456062006

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