Presentation is loading. Please wait.

Presentation is loading. Please wait.

INDIVIDUAL DISABILITY INSURANCE SOLUTIONS FOR BUSINESS OWNERS AND KEY EMPLOYEES Individual Disability Insurance.

Similar presentations


Presentation on theme: "INDIVIDUAL DISABILITY INSURANCE SOLUTIONS FOR BUSINESS OWNERS AND KEY EMPLOYEES Individual Disability Insurance."— Presentation transcript:

1 INDIVIDUAL DISABILITY INSURANCE SOLUTIONS FOR BUSINESS OWNERS AND KEY EMPLOYEES Individual Disability Insurance

2 For producer information only. Not for use in sales situations. Why target the business market? SMALL BUSINESS OWNERS NEED YOUR HELP They play a vital role in the economy They don’t always take the time to plan They have multiple planning and protection needs

3 For producer information only. Not for use in sales situations. The market is wide open – for now Source: Financial Solutions for Business Owners, research conducted by Harris Interactive for the Principal Financial Group. April 2013. HOW DO BUSINESS OWNERS USE FINANCIAL PROFESSIONALS? 48% 6% 20% 7% 19% Business needs only Unsure Personal and business needs Do not use Personal needs only

4 For producer information only. Not for use in sales situations. Your expertise makes a difference Business owners who work with a financial professional tend to have: More stable businesses Greater peace of mind Source: Financial Solutions for Business Owners, research conducted by Harris Interactive for the Principal Financial Group. April 2013.

5 For producer information only. Not for use in sales situations. Help determine the right approach to their priorities Business Owner Research, Harris Interactive, 2013. They need your guidance and expertise RANKED PRIORITY 1Business Protection 2Group Health Benefits 3Income Protection 4Qualified Retirement Plans 5Group Life, Disability, Dental & Vision 6Supplemental Key Employee Benefits 7Voluntary Employee Benefits 8Wealth Transfer 9Survivor Income 10Exit Planning

6 For producer information only. Not for use in sales situations. The Risk of Disability What is the likelihood that one or more owners becomes disabled for 3 months or longer? 1 Age1 Owner2 Owners3 Owners 2745%70%84% 3740%65%79% 4732%55%70% 5720%35%48% 1 Before age 65. Based on Commissioner’s Individual Disability Table B – Equally Weighted, All Occupation Classes, Unisex.

7 For producer information only. Not for use in sales situations. NEEDSOLUTIONS Income Protection Individual Disability Income (DI) Core Value Income Protection SM Multi-Life DI / Employer Offerings PERSONAL NEEDS Retirement Savings DI Retirement Security (DIRS) Business Protection Overhead Expense (OE) Business Loan Protection 1 Key Person Protection 1 BUSINESS NEEDS Exit Planning Disability Buy-Out (DBO) Cover 4 key protection needs 1 – Not available in all states. For state approvals, go to: www.principal.com/distateapprovals. 1 2 3 4

8 For producer information only. Not for use in sales situations. Income Protection 1

9 For producer information only. Not for use in sales situations. Key Need 1: Income Protection Individual DI insurance Affordable + Flexible Discounts available Fully portable Optional riders Tax-free benefits 1 Client advantages: Maintains current lifestyle without draining savings or business profits Provide for their family Continue saving for future dreams/retirement Objective: Helps replace a portion of lost income in the event of a disability. 1 – When premiums are paid with after-tax dollars

10 For producer information only. Not for use in sales situations. TIP: Target young professionals This offering can help cover one of their biggest financial liabilities – student loans. Client advantages: Affordable protection from a reputable carrier Ability to provide for their family Simplified underwriting process Objective: Provides a packaged offering for most 2A and 3A occupations 1. 1 Not available for Registered Nurses, court reporters, dental assistants, dental or oral hygienists and dental lab technicians. Key Need 1: Income Protection Core Value Income Protection

11 For producer information only. Not for use in sales situations. TIP: Multi-life advantages Case assistance Discounts available Flexible programs Key Need 1: Income Protection Employer Offerings Client advantages: Dozens of ways to structure design Solutions available for key employee and executive perks Employer-paid, employee-paid or combination Objective: Provide employers with solutions to reward and retain employees

12 For producer information only. Not for use in sales situations. Key Need 1: Income Protection Employer Offerings GROSS INCOME 100% NET INCOME after taxes 75% GROUP LTD BENEFIT pre-tax 60% GROUP LTD BENEFIT After taxes 42% GROUP LTD BENEFIT After taxes INDIVIDUAL DI 68% REPLACE MORE INCOME Supplement Group Long-Term Disability (LTD) Programs Table assumes Group LTD covers 60% of salary and a tax backet of 25%.

13 For producer information only. Not for use in sales situations. Retirement Savings 2

14 For producer information only. Not for use in sales situations. TIP: Use as an employee perk Offer DI Retirement Security as an added benefit for executives and key employees. Objective: Helps clients continue saving for retirement in the event of a qualifying disability. Client advantages: Can receive benefits through retirement years Investment options based on risk tolerance Dedicated disability benefits for retirement savings Key Need 2: Retirement Savings DI Retirement Security

15 For producer information only. Not for use in sales situations. 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. Key Need 2: Retirement Savings DI Retirement Security

16 For producer information only. Not for use in sales situations. Business Protection 3

17 For producer information only. Not for use in sales situations. Objective: Reimburses business owners for covered business expenses incurred during a disability. Client advantages: 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 TIP: Share the benefits Benefits can help the business owner maintain financial health and credit ratings Key Need 3: Business Protection Overhead Expense

18 For producer information only. Not for use in sales situations. Lease or mortgage payments Utilities Employee salaries and benefits - some limitations Payments for leasing or purchasing furniture and equipment Accounting, billing, and collection fees Janitorial, security, and maintenance Premiums for malpractice, property, and liability insurance Professional trade dues and subscriptions Sample covered expenses Key Need 3: Business Protection Overhead Expense

19 For producer information only. Not for use in sales situations. Not approved in all states; not available in California. Go to: www.principal.com/distateapprovals for more information. This is a cost rider available on HH702 and HH789 OE insurance policies.www.principal.com/distateapprovals Client advantages: Helps keep the business open and operating Creates goodwill with customers, employees and creditors Helps maintain business owner’s credit rating TIP: Work with lenders Seek opportunities to set up referral arrangements with lenders. Objective: Reimburses owner for covered business-related loan obligations during a disability. Available as a rider on an OE insurance policy. Key Need 3: Business Protection Business Loan Protection

20 For producer information only. Not for use in sales situations. Not approved in all states; not available in California. Go to: www.principal.com/distateapprovals for more information.www.principal.com/distateapprovals TIP: Pair with Life coverage Pairs well with key person life insurance. Objective: Protects small to medium-sized businesses from the loss of employees critical to the success of the business due to a total disability. Key Need 3: Business Protection Key Person Replacement Client advantages: Can be used at the discretion of the employer Benefits generally received income tax-free and are paid to the employer (should not be reassigned to employee)

21 For producer information only. Not for use in sales situations. Exit Planning 4

22 For producer information only. Not for use in sales situations. *Clients should contact their tax advisor for details. Objective: Funds a buy-sell agreement; helps buy-out a disabled owner’s interest in the business in the event of a long-term disability. Client advantages: Benefits are income tax-free – the disabled owner is taxed only on the gain from the sale of the business* Provides a funding solution for the business TIP: Check the Buy-Sell Agreement Help make sure a buy- sell agreement covers total disability and is properly funded. Key Need 4: Exit Planning Disability Buy-Out insurance

23 For producer information only. Not for use in sales situations. Approach Business Owners

24 For producer information only. Not for use in sales situations. Step 1: Get started Set an appointment Use Comprehensive Disability Planning Worksheet (JJ1834) Basic profile information Owner/key employee census/key information Existing disability coverages Business planning summary Each of the four planning areas JJ1834

25 For producer information only. Not for use in sales situations. Complimentary Business Planning Services 1 1 2 2 Informal Business Valuation Buy-Sell Agreement Review Step 2: Offer value

26 For producer information only. Not for use in sales situations. Complimentary business planning services INFORMAL BUSINESS VALUATION Customized report Five methods used to value the business First step to exit planning conversations BUY-SELL AGREEMENT REVIEW Customized report Helps identify potential gaps and provide recommendations Summarizes current funding provisions and options to address additional needs 1 1 2 2

27 For producer information only. Not for use in sales situations. Complimentary business planning services Completed Fact Finder 3 most recent years financials (Income Statement/Balance Sheets or Business Tax Returns) Informal Business Valuation Completed Fact Finder Business Continuation Plan Document with amendments Information on any existing insurance funding agreement Buy-Sell Review Fact Finder BB10847IDI

28 For producer information only. Not for use in sales situations. Step 3: Close the sale Identify IDI solutions Present proposals to the business owner Submit applications and any necessary financial documentation USE THE PROPOSAL

29 For producer information only. Not for use in sales situations. 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. While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that The Principal ® is not rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements. Insurance issued by Principal Life Insurance Company a member of the Principal Financial Group®, Des Moines, IA 50392, www.principal.com 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 ®. DI8645-2 | 12/2014 | © 2014 Principal Financial Services, Inc. Questions?


Download ppt "INDIVIDUAL DISABILITY INSURANCE SOLUTIONS FOR BUSINESS OWNERS AND KEY EMPLOYEES Individual Disability Insurance."

Similar presentations


Ads by Google