Individual Disability Insurance THE INCOME PROTECTION CONVERSATION For

Individual Disability Insurance THE INCOME PROTECTION CONVERSATION For Producer Information Only. Not For Use In Sales Situations.

Income protection is important 1 in 4 of today’s 20 -year olds will become disabled before retiring. 1 Nearly 50% of Americans would be in financial trouble in one month or less following a disability 2 The #1 reason for an unexpected early retirement is health problems. 3 1 Social Security Administration Fact Sheet, April 2014 | 2 The Life and Health Foundation for Education (LIFE) survey, conducted by Kelton, April 2012, most recent data available | 3 Employee Benefit Research Institute 2014 Retirement Confidence Survey underwritten by the Principal Financial Group® For Producer Information Only. Not For Use In Sales Situations.

FACT Financial advisors that take a comprehensive approach with clients, including offering Individual Disability Insurance, earn 43% more than those that do not. Source: 2013 Principal Life Insurance Company retail sales data For Producer Information Only. Not For Use In Sales Situations.

What do you sell? • • • Disability insurance Life insurance IRAs Mutual funds 401(k) Group benefits YOUR OPPORTUNITY Help clients protect their most valuable asset. For Producer Information Only. Not For Use In Sales Situations.

Top 5 Reasons to Sell Individual Disability Insurance 1 It’s a great door opener. 2 Upon a disability, it helps your clients pay daily living expenses and bills, including premiums on other insurance products they have with you. 3 It helps you diversify your portfolio offering and provides attractive compensation. 4 It’s part of your due diligence. 5 Solutions are available in sought-after markets (e. g. , business owners and higher-income individuals) For Producer Information Only. Not For Use In Sales Situations.

IF YOU SELL GROUP BENEFITS… For Producer Information Only. Not For Use In Sales Situations.

Group benefits Group LTD is a good start… Full paycheck. Healthy and working. Group LTD benefits before taxes For the cost of 1 to 3 pennies… Individual DI insurance can protect more or your client’s income Group LTD benefits after taxes For Producer Information Only. Not For Use In Sales Situations.

Group benefits Supplemental coverage – at a discount Referral opportunity: Your client’s coworkers need coverage, too. 20% DISCOUNT 1 1 – Multi-life discount. Available when three or more employees with a common employer purchase Individual Disability Insurance from Principal Life. For Producer Information Only. Not For Use In Sales Situations.

IF YOU SELL LIFE INSURANCE… For Producer Information Only. Not For Use In Sales Situations.

Life Insurance Total Risk Protection INCOME REPLACEMENT | It takes two. Life insurance Death benefit Disability Insurance “Living” benefit For Producer Information Only. Not For Use In Sales Situations.

Life Insurance Sales Opportunities TRIGGERING EVENTS 1 Starting a career or graduating college 2 Recent life change and seeking life insurance (e. g. , home purchase, marriage, new baby) 3 Has life insurance with a waiver of premium rider or illness advance death benefit rider For Producer Information Only. Not For Use In Sales Situations.

Life Insurance Streamlined Underwriting Programs SELLING LIFE AND DI FROM PRINCIPAL LIFE TOGETHER • • tests 1 No lab Fewer requirements One Tele. App call Accelerated turnaround timing Additional guidelines apply. Combination Tele. App: 10 additional questions • Current employment • Business ownership • Employment tenure and future plans • Use of disability benefits • Pregnancy 1 -888 -Tele. App 1 – Simplified DI: No blood, urine, exams, EKGs or APSs required, unless a significant medical condition is reported by MIB, significant medical information is obtained from the Tele. App or other available information, or any other disability coverage has been issued or applied for on a non-medical basis. Applications could be rated, ridered or declined based on all underwriting information available; this is not a guaranteed issue program. Urine/HIV test is required in Maine. Subject to Issue & Participation limits and minimum premium requirement. Accelerated Life Underwriting: For those with no significant medical or non-medical conditions; based on age and face amount requirements. For Producer Information Only. Not For Use In Sales Situations.

IF YOU OFFER RETIREMENT PLANNING… For Producer Information Only. Not For Use In Sales Situations.

Retirement Planning Retirement savings need protection Assumptions: $2, 000/month contributions beginning at age 30, 5% rate of return and age 65 retirement. Potential loss due to disability at age 40 without continued contributions to retirement savings. For Producer Information Only. Not For Use In Sales Situations.

Retirement Planning Retirement Completion DI RETIREMENT SECURITY Pays disability benefits to a trust for retirement income. For Producer Information Only. Not For Use In Sales Situations.

IF YOU OFFER INVESTMENT SERVICES… For Producer Information Only. Not For Use In Sales Situations.

Wealth management & Investments Income: An asset worth millions POTENTIAL EARNINGS TO AGE 65 (with 5% annual salary increases) Annual Income AGE $75, 000 $100, 000 $150, 000 $200, 000 30 $6, 774, 000 $9, 032, 000 $13, 548, 000 $18, 064, 000 40 $3, 580, 000 $4, 773, 000 $7, 159, 000 $9, 545, 000 50 $1, 618, 000 $2, 158, 000 $3, 237, 000 $4, 316, 000 For Producer Information Only. Not For Use In Sales Situations.

Wealth management & Investments Manage it like any other asset Investment management Fee: 2% of assets Income Protection Cost: 2% of income For Producer Information Only. Not For Use In Sales Situations.

But, can my clients afford it? For Producer Information Only. Not For Use In Sales Situations.

The cost of doing nothing WHAT’S MORE COSTLY? Purchasing a DI policy and receiving monthly benefits in the event of the unexpected. Self-insuring and trying to come up with the money when income stops. For Producer Information Only. Not For Use In Sales Situations.

Coverage is affordable OFTEN LESS THAN MONTHLY TECHNOLOGY EXPENSES DI Assumptions: $1, 000 monthly benefit, male, age 25, Michigan resident, 5 A occupation class, non-tobacco, 90 -day elimination period, to age 65 Benefit Period and Your Occupation Period, Residual and Recovery Benefit rider. While we believe the information presented about the other companies to be accurate, Principal Life Insurance Company does not guarantee its accuracy or condone its use to disparage other companies or their products. For Producer Information Only. Not For Use In Sales Situations.

You’re rewarded, too. For Producer Information Only. Not For Use In Sales Situations.

Compensation Strong first-year commissions Tiered ongoing renewals Quality Business Bonus Quality Producer Bonus FIRST-YEAR COMMISSIONS 1 ISSUE AGE 1864 50% occupation classes 6 A-3 A 45% occupation classes 2 A-A ISSUE AGE 65+ 4% for all occupation classes RENEWAL COMMISSIONS 2 (DI FYCs earned in year policies issued) Years 2 -5 Years 6 -10 $0 - $4, 999 $5, 000 - $9, 999 $10, 000 - $14, 999 5% 10% 12% 5% 7% 10% Years 11+3 3% 3% 3% 1 – FYCs for standard issue (GSI) cases are 45% if Employer Paid; 40% if Voluntary. Commissions may be reduced for GSI DI cases with a premium discount greater than 25%. 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 FYCs. 3 – Renewal commissions in policy years 11 and later are contingent upon $5, 000 of first-year commissions earned on disability insurance policies issued in the prior calendar year. If you’re retired and have $125, 000 of individual disability insurance premium inforce at the time of your retirement, renewals will be vested in years 11 and later regardless of prior contingency. You must notify us in writing of your retirement. For Producer Information Only. Not For Use In Sales Situations.

Sample earnings potential Cumulative earnings over 10 years: $427, 500 Percentage of income from renewals: 45% Annual DI premium: $30, 000 Year 1 2 3 4 5 6 7 8 9 10 Assumptions: HH 750, 6 A/5 A/4 A/3 A occupation class, 100% persistency, Annual DI Premium = $30, 000; Issue Ages of 18 -64 For Producer Information Only. Not For Use In Sales Situations.

Questions? 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. No part of this presentation may be reproduced or used in any form or by any means, electronic or mechanical, including photocopying or recording, or by any information storage and retrieval system, without prior written permission from the Principal Financial Group®. DI Retirement Security is issued as a non-cancelable, guaranteed renewable, individual disability income insurance policy. It is not a pension or retirement program or a substitute for such a program. DI Retirement Security is not available for government employees or anyone who is over insured based on Principal Life's current issue and Participation guidelines. It may not be available or the benefit amount may be reduced for certain occupations if there is existing DI coverage with lifetime benefits. Additional underwriting guidelines may apply. Insurance issued by Principal Life Insurance Company, a member of the Principal Financial Group®, Des Moines, IA 50392. DI 9173 | 11/2014 | © 2014 Principal Financial Services, Inc For Producer Information Only. Not For Use In Sales Situations.