SI 15608PPT (Rev 1/14) Buy/Sell Funding Disability Insurance at The Standard For producer training only. Not for use with consumers.

SI 15608PPT (Rev 1/14) Importance of selling disability buy/sell insurance Overview of disability buy/sell insurance Buy/Sell Agreements The Standard’s Business Equity Protector SM Guidelines for your consideration Required forms and documentation Contents

SI 15608PPT (Rev 1/14) When you have business owner customers who share ownership in a business, as part of the owners’ business planning, you can suggest buy/sell insurance as a way to provide equity funding in the event one of them becomes disabled. Why selling disability buy/sell insurance is valuable to you and your customers

SI 15608PPT (Rev 1/14) Disability buy/sell insurance coverage is commonly used as a companion to life insurance to fund the transfer of ownership in the event an owner of a small, closely-held business becomes disabled, triggering a buy-out of the owner’s interest in the business. Disability Buy/Sell Insurance

SI 15608PPT (Rev 1/14) Funding a buy-out obligation with disability insurance serves dual purposes. It provides 1.a source of funds for the purchase of a disabled owner’s interest in a business 2.a disabled owner with compensation for his or her equity in the business. Disability Buy/Sell Insurance

SI 15608PPT (Rev 1/14) A buy/sell agreement is a written agreement between business owners, including the insured, providing for the purchase of an owner’s entire ownership interest in the event of total disability or other contingencies like death or divorce. Buy/Sell Agreements

SI 15608PPT (Rev 1/14) The Standard requires that a buy/sell agreement is in force within one year of a buy/sell funding policy-effective date, and remain continuously in force up to the time of total disability. The Standard is not a party to this agreement. Buy/Sell Agreements

SI 15608PPT (Rev 1/14) Buy/Sell Agreements list all owners and their interests provide a definition of disability state the trigger point and waiting period create an enforceable obligation to buy or sell state a value in the event of death, disability or voluntary withdrawal state the purchase price or method for calculating purchase price Buy/Sell Agreements

SI 15608PPT (Rev 1/14) The Standard’s Business Equity Protector SM

SI 15608PPT (Rev 1/14) Business Equity Protector is The Standard’s buy/sell disability insurance product. It is available in all states except New York. The following slides show the data pages that are issued with Business Equity Protector. Business Equity Protector

SI 15608PPT (Rev 1/14) Business Equity Protector Data Pages Issue ages are 18 through 60 Available to Occupation Classes 5A through B

SI 15608PPT (Rev 1/14) Business Equity Protector Data Pages There are three funding methods Downpayment Monthly Lump Sum

SI 15608PPT (Rev 1/14) Business Equity Protector Data Pages There are three waiting periods 365 days 540 days 730 days

SI 15608PPT (Rev 1/14) Business Equity Protector Data Pages The Future Buy-Out Expense Option Benefit Rider is issued to insureds aged It offers owners the opportunity to increase the buy-out policy benefits on each policy’s even anniversary year to keep pace with business needs.

SI 15608PPT (Rev 1/14) Business Equity Protector by Occupation Class Incremental payout options of two, three and five years are available. Please see The Protector Series Product Guide for more information.The Protector Series Product Guide

SI 15608PPT (Rev 1/14) Business Equity Protector by Occupation Class (continued) Occasionally, certain amounts may be unavailable or limited because of reinsurance availability. The Minimum Monthly Benefit for the Business Equity Protector is $600. The Minimum Lump Sum is $10,000. Aggregate is the maximum total buy ‑ out benefit available under the monthly benefit option or when combining lump sum and monthly benefits under the down payment option. Under the down payment option, the maximum monthly benefit available is the difference between the aggregate benefit applied for and the lump sum benefit requested, divided by the number of months in the monthly benefit period. For example, a class 5A risk applying for a 540-day waiting period with a three year benefit period applies for an aggregate benefit of $2,000,000 with a lump sum benefit of $1,100,000. The monthly benefits are $25,000 ($2,000,000 - $1,100,000 = $900,000)

SI 15608PPT (Rev 1/14) Business Equity Protector by Occupation Class (continued) For Business Equity Protector the 3A occupation class includes 3P physicians and dentists. The 4A occupation class includes 4P physicians, dentists and 3P surgeons. If multiple occupation classes are noted in Occupation Class List, use the occupation class that is not listed as Protector Platinum.

SI 15608PPT (Rev 1/14) Because of the insured’s injury or sickness: 1. the insured is unable to perform the substantial and material duties of his or her regular occupation; 2. the insured does not perform any work for the business; and 3. the insured is under the regular care of a physician appropriate for the insured’s injury or sickness. Definition of Total Disability

SI 15608PPT (Rev 1/14) The benefit for total disability will become payable under the funding method shown on the data page of the policy on the later of: the commencement date; or the date a buy-out expense is payable to the insured as a result of the insured’s total disability. The policy must be in force on this date. When Benefits Are Payable

SI 15608PPT (Rev 1/14) Once policy benefits become payable under the monthly or down-payment funding method, The Standard will continue to pay the benefit for total disability whether or not the insured remains totally disabled if: The policy benefit limits have not been exceeded; The total benefit paid to the insured under the policy has not exceeded the total buy- out expense under the buy/sell agreement; and The insured is not performing any work for the business. Benefits with Business Equity Protector

SI 15608PPT (Rev 1/14) The amount for total disability The Standard will pay equals the buy-out expense depending on the value of the business at the time of disability. It will be payable under the funding method shown on the data page, subject to the benefit limit on the data page of the policy times the applicable percentage from the table below: Percentage of Total Disability Starts: Benefit Limit: Prior to the insured’s 61st birthday:100% On or after the insured’s 61st birthday, but prior to the 62nd birthday:80% On or after the insured’s 62nd birthday, but prior to the 63rd birthday:60% On or after the insured’s 63rd birthday, but prior to the 64th birthday:40% On or after the insured’s 64th birthday:20% Benefits With Business Equity Protector

SI 15608PPT (Rev 1/14) Business Equity Protector Data Pages The Extended Benefit Option Rider is issued to insured aged 18 – 50. It delays the reduction of policy benefits until age 65 and provides reduced coverage until the policy anniversary following the insured’s age 70.

SI 15608PPT (Rev 1/14) Guidelines to Consider

SI 15608PPT (Rev 1/14) The Business Equity Protector policy is designed primarily for partnerships and corporations with five or fewer principals. Individual consideration is given to businesses with more than ten owners. This is rare and underwriting pre-approval is required. continued on next slide Guidelines To Consider

SI 15608PPT (Rev 1/14) Individuals who are not eligible for disability insurance coverage, other than group insurance, are generally declined. The business must have been in existence for at least three years. This requirement may be waived on a case by case basis. The insured cannot own his or her policy. continued on next slide Guidelines To Consider (cont’d)

SI 15608PPT (Rev 1/14) Money cannot be submitted with applications to bind coverage. Participation with other companies is possible except where law prohibits the reduction of benefits. Where there is participation with other coverage, The waiting periods must be the same, and The Standard must be advised continued on next slide Guidelines To Consider (cont’d)

SI 15608PPT (Rev 1/14) Owners must own at least 10% of the business and no more than 90%. Generally, there cannot be more than a 20-year age gap between owners. Familial relationships between owners may impact eligibility Guidelines To Consider (cont’d)

SI 15608PPT (Rev 1/14) Required Forms and Documentation

SI 15608PPT (Rev 1/14) State specific application State specific Disability Buy-Out Fact Sheet Application Supplement Form 7202 Certification of Buy/Sell Agreement Form 7204 All forms can be found at Select Find Applications & Forms. Other forms listed in your state specific forms lists may be required at the time of underwriting Required Forms

SI 15608PPT (Rev 1/14) Income documentation is required with the application Last two fiscal years’ business financial statements Please review Understanding Income Documentation. A copy is included in each application packet.Understanding Income Documentation Please contact your Managing General Agent or Securian Managing Partner if you have questions. Income Documentation

SI 15608PPT (Rev 1/14) The Standard’s individual disability insurance producer website at Business Equity Protector Sample Policy, form SI 1060form SI 1060 Business Equity Protector California Sample Policy, form SI 1060CAform SI 1060CA Business Equity Protector Policy Summary, form SI 1062form SI 1062 Understanding Income Documentation Flyer, form SI/SNYform SI/SNY The Protector Series SM Reference Product Guide, 9251REF SI/SNY9251REF SI/SNY Resources

SI 15608PPT (Rev 1/14)