Business Reducing Term Unique Product, Unique Opportunity FOR AGENT AND BROKER USE ONLY. NOT FOR USE WITH THE GENERAL PUBLIC

The Opportunity… Do you have business owner clients who have…  Borrowed money for an expansion?  Recently purchased a business or practice?  Offered a guaranteed employment contract to a key employee? 2

The Opportunity…is Guardian Do you have the only domestic product solution designed to cover these obligations in the event of total disability? Yes – absolutely: Guardian’s Business Reducing Term * product Business Reducing Term, policy form AH55-A, is provided by The Guardian Life Insurance Company of America, New York, NY. Product provisions and features vary from state to state. 3

What is Business Reducing Term? Insures against a total disability that prevents your client from meeting fixed obligations*:  Business loans, where repayment depends on talents of a key individual  Purchase agreements  Salary or performance guarantee contracts *financial obligations requiring periodic payments and expiring at a given time. 4

Overhead Expense is NOT the right answer! And, assigning personal IDI coverage to protect these obligations is ill advised 5

A Disability Can Happen… You’ve identified the need for business life insurance But did you know?  A male aged 35 years is 4.1 times more likely to be disabled before age 65 than he is to die*  At age 45, the odds are 4.4 to 1*  Disability of the owner is a leading cause of small business failure** *Commissioner’s Individual Disability Table, 1985, and Commissioner’s Standard Ordinary Mortality Table, Statistics vary depending on the applicant’s gender, age, occupation and medical history. **LIMRA International 6

BRT: The 100% Solution BRT covers…  Loan obligations: up to 100% of the monthly payment  Employment contracts: up to 100% of the after-tax cost of contract payments  BRT coverage issued in addition to personal DI 7

Selling Business Reducing Term  Find the obligation and you’ve found the sales  Owners and professionals know they are “on the hook”  Separate the specific loan obligation from other “overhead expenses” 8

How Does BRT Work? $25,000$1,000 IssueTerm Ends $0IssueTerm Ends $0 Full Amount Payable Until Face AmountMonthly Indemnity DECREASING TERM LIFE INSURANCEREDUCING TERM DISABILITY INSURANCE 9

How Does BRT Work?  Conditionally renewable to end of specified term renewal refused only if lack of insurable interest or reduction/termination of economic need for the policy your obligation: conduct an annual review  Premiums are level & sex-distinct  Available in all states except FL, MT, NC, SC, VA 10

How Does BRT Work?  Coverage lasts for a specified term 5 to 30 years policy term = length of the obligation coverage cannot extend beyond age 60  Elimination Periods: 1, 2, 3, 6, 12 months  Benefits paid during disability up to the end of the specified term 11

How Does BRT Work?  Benefits payable directly to the “loss payee” Loss payee = holder of the obligation Indemnity policy – not reimbursement  Issue ages: 18 to 55 (age last birthday)  Issue limits: Minimum: $1,000/mo. ($500 if other Guardian or Berkshire coverage in force) Maximum: $22,500/mo.* *Maximum available issue limit determined by duration of the financial obligation. 12

BRT Maximum Issue Limits 13 5$22,500 6$19,500 7$17,100 8$15,300 9$14,100 10$12,900 11$12,000 12$11,400 13$10,800 14$10,200 15$ 9,600 16$ 9,300 17$ 9,000 18$ 8,700 19$ 8,400 20$ 8,100 21$ 7,860 22$ 7,740 23$ 7,500 24$ 7,380 25$ 7,260 26$ 7,140 27$ 7,020 28$ 6,900 29$ 6,780 30$ 6,660 TermBRTTermBRT (In Years)Issue Limit(In Years)Issue Limit

How Does BRT Work?  Total disability only “unable to perform all the substantial and material duties of your occupation; and, you are not actually at work in any occupation or profession.”  Premiums waived during total disability lasting more than 90 days 14

Applying for BRT is Easy  Proof of obligation loan agreement, employment contract, etc.  Streamlined medical underwriting  Use application form #DI AP-2003 California only: Guardian form #AP2-96 CA Applications at Berkshire e-Forms Center  Agency administrators will direct all BRT applications to the Spokane Underwriting unit Submit combination IDI & BRT applications to the Pittsfield office 15

Marketing & Sales Support  Client brochure (Pub1623)  Imprintable ads, flyers and pre-approach letters that can be viewed and ordered through the Marketing Tools Catalog available on  National Sales and Product Support Center: , select option 1 16

Business Reducing Term Disability Insurance to Protect Your Business Obligations 17