1. Help Employers Offer Income Protection
Multi-Life Individual Disability Insurance
Presenter’s name
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For producer information only. Not for use in sales situations.

2. This information is provided with the understanding that Principal® is not rendering legal, accounting, or tax advice. 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,
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.
Principal, Principal and symbol design and Principal Financial Group are trademarks and service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
Not a Deposit | Not FDIC or NCUA Insured | No Bank or Credit Union Guarantee | May Lose Value | Not Insured by any Federal Government Agency
For financial professional use only. Not for use with consumers or the public.

3. Multi-Life Advantages1
Flexible design options 2
Affordable coverage – with discounts 3
Easy to implement
For financial professional use only. Not for use with consumers or the public.

4. Why offer multi-life solutions
Triple Advantages
Employer
Employees
You
Helps attract and retain a quality workforce
A valuable benefit that helps protect income
Portable policy and discounts
Sell multiple policies at once – increasing compensation potential
For financial professional use only. Not for use with consumers or the public.

5. The value of the Multi-Life Discount
When 3 or more employees with a common employer purchase any Individual Disability Insurance from Principal Life. No formal employer involvement required.
Age
Multi-life 25
$18/month 35
$26/month 45
$38/month
Sample Premium
$1,000 Monthly Benefit
Assumptions: Michigan resident, To Age 65 Your Occupation and Benefit periods, 90-day Elimination Period, Residual and Recovery Benefit rider, 5A occupation class, non-tobacco 20% multi-life discount.
1 – Based on gender neutral rates.
For financial professional use only. Not for use with consumers or the public.

6. Getting started in the market
Review your existing block of business and ask for referrals.
Prospect with local businesses; employees can be in multiple locations.
Who to target
Small- to medium-size businesses
Professional and grey collar occupations
Banking, engineering, accounting, law, veterinary medicine, architecture, etc.
Voluntary benefits
Business with up to 250 eligible lives
Annual incomes of $35,000 or more
Employer-paid benefits
Business with 10 to 30 participating lives
Annual incomes of $375,000 or more
For financial professional use only. Not for use with consumers or the public.

7. Opening doors with employers
Design review
Discuss goals of client’s benefit program
Review the current benefit offering
Look for gaps in coverage
No benefits in place
Group disability benefits only
Executives and key employees under-protected
Retirement savings unprotected
For financial professional use only. Not for use with consumers or the public.

8. Offering DI as an employee benefit
Program
Benefits
Discounts
Fully Underwritten
Up to max issue and participation limits
20%: 3 or more lives required1
Simplified Multi-Life
Up to $6,000/month
Standard Issue (GSI)
Based on census and participating lives
20%: lives2
25%: lives
30%: 100+ lives
Fallback GSI
Initially up to max issue and participation limits
Fallback GSI offer based on census and participating lives
20%: 8-49 lives2
You can also offer DI as an employee benefit – part of a formal employee benefit program.
Principal Life offers four primary multi-life program options: Fully underwritten, Simplified Multi-Life, Standard Issue (also known as GSI) and Fallback GSI. All of these options provide a discount when minimum lives thresholds are met. The programs all start with at least a 20 discount. As the number of lives in the group increase, greater discounts may be available.
Plus, the multi-life discounts can be combined with other discounts like Select Occupation or Mental Nervous Substance Abuse Disorders Limitation rider for even greater savings.
Any of these programs could be offered on an employer-paid or voluntary basis, or a combination of both.
Who pays the premium? Employer, employee or a combination.
1Greater discount may be available based on number of lives.
2 25 or more lives required for physicians
For financial professional use only. Not for use with consumers or the public.

9. Fully Underwritten Multi-Life
20% Multi-Life Discount Full underwriting reviews conducted, providing the opportunity for the maximum level of benefits
For groups with 3+ lives | All occupation classes
When employees need greater than $6,000 in monthly benefits
Individual DI benefits: Up to $20,000/month; participating up to $30,000/month1
All riders available
The fully underwritten multi-life discount is available when three or more individuals with a common employer purchase any Individual Disability Insurance policy from Principal Life Insurance Company. Offering this discount does not require employer involvement.
The 20% discount is based on unisex rates for Individual DI insurance policies, providing even greater savings. And the policy is portable, so it goes with the individual should he or she change jobs.
1Additional guidelines apply
For financial professional use only. Not for use with consumers or the public.

10. Simplified Multi-Life Program
20% Multi-Life Discount
Streamlined underwriting; no routine medical requirements1 or income documentation (up to $150,000/year;2 may request census)
For groups with 3+ lives | All occupation classes
When employees need monthly benefits below $6,000
Individual DI benefits: Up to $6,000/month
Accelerated turnaround once the application and TeleApp interview are completed and received
All riders available including Benefit Update
With the Simplified Multi-Life program, a quick and easy application process and a streamlined underwriting process provides an underwriting decision in 48 hours. The Simplified program features no routine medical or financial documentation required. It’s an easy way to make a multi-life sale and an easy way for an employer to provide employees with an additional disability benefit option.
Disclaimers:
Routine medical requirements may be required if a significant medical condition is reported by MIB and not verified in part A or B (TeleApp) of the application, or any other disability coverage has been issued or applied for on a non-medical basis. Applications could be rated, ridered or declined. This is not a guaranteed issue program. Subject to minimum premiums, I & P limits, and current underwriting guidelines.
Financial documentation may be required for certain multi-life cases. For Simplified OE, no financials required beyond information provided on part A of the application and OE supplement. Financials are required for Simplified DBO.
For Single-Life cases, the cover page and Field Office Report must accompany the application along with the OE and/or DBO Supplement and DBO financials. For Multi-Life cases, underwriting approval is required prior to application submission. Submit a complete census for each eligible group and include information on any Group LTD or other disability insurance programs in-force. Once approved, a copy of the offer letter and Field Office Report must accompany the application.
1 - No blood, urine, exams, EKGs or APSs required unless a significant medical condition is reported by
MIB, significant medical information is obtained from the TeleApp 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. Simplified single-life DI is not available in California; APS and financials are required for all DI
applications (except multi-life DI cases of 3 lives or more). | 2 - Financial documentation may be required for certain occupations regardless of income earned.
For financial professional use only. Not for use with consumers or the public.

11. Standard Issue (GSI) Up to 30% Discount
For larger cases; no routine medical requirements or individual financials (just employee census)
Minimum lives:1 10 for employer-paid cases; 15 (with 20% participating) for employee-paid cases
3A occupation class or higher
Individual DI benefits: Based on census and participating lives (typically up to $7,500/month)
Standard coverage for approved group
Cost of Living Adjustment (COLA) and Conditionally Renewable rider available; others available with underwriting approval
Guaranteed standard issue cases provide standard coverage for an entire group. No routine medical requirements or individual financials are needed. It is available to 3A occupation classes or higher and when there are at least 5 participating lives.
There are few key components that are critical to successfully placing a GSI case. First, you should be ready to think creatively and be flexible to structure an ideal GSI solution for the employer. Second, you must have two things from the employer: Commitment and access to employees. Third, you need involvement and support from the company’s HR Director for assistance with census development, communication to employees and coordinating enrollment meetings.
1 5 lives when Principal Life Group LTD coverage is sold; 25+ lives required for physician groups
For financial professional use only. Not for use with consumers or the public.

12. Fallback GSI Up to 30% Discount
For larger cases; maximum benefits available with safety net GSI offer if employee does not meet underwriting guidelines
Minimum lives:1 8 for employer-paid cases; 15 (with 20% participating) for employee-paid cases
3A occupation class or higher
Individual DI benefits: Up to $20,000/month; participating up to $30,000/month1
Fallback GSI benefits: Based on census and participating lives
All riders available for fully underwritten. COLA and Conditionally Renewable riders available for Fallback GSI; others available with underwriting approval
1 5 lives when Principal Life Group LTD coverage is sold; 25+ lives required for physician groups
For financial professional use only. Not for use with consumers or the public.

13. Successful Enrollment
The multi-life sale is a two-step process
Selling it to the employer
Selling it to the employee
Employee communication is key
Promote the offering in print and electronically
Present at group kick-off meetings
Hold one-on-one consultations
Follow up with employees
Establish a process for reaching newly eligible employees
All Cases
Take advantage of marketing materials and communication materials from Principal Life
Larger Cases
Customized proposals, pre-filled applications and enrollment kits available
For financial professional use only. Not for use with consumers or the public.

14. Design Considerations
For financial professional use only. Not for use with consumers or the public.

15. Supplement group disability insurance
Group long-term disability coverage is a always a great start to income protection, but in many cases, it’s just not enough. Let’s go through this slide to see why.
First, when employees are healthy and working, they receive their full paycheck. And chances are, they make full use of it, covering their mortgage, groceries, and utilities while also saving for retirement or other rainy day funds.
If an illness or injury prevents them from working, their group LTD policy would kick in. Most group LTD policies replace 60 percent of income (up to a set monthly cap). $5,000 is a common monthly benefit cap. So, right off the bat, employees take a pay cut, but when you factor in taxes, the amount they take home drops even further.
For just a few pennies on the dollar, a supplemental individual DI insurance policy helps clients replace a greater portion of their incomes.
Chart based on $6,250 gross monthly income ($75,000 annual), with 60% group long-term disability program, assuming a 30% tax bracket for federal, state and FICA.
For financial professional use only. Not for use with consumers or the public.

16. Executive Coverage Gaps
Group LTD monthly benefit caps can create an income replacement gap for highly compensated employees.
Income
Group LTD Monthly Benefit
Income Replacement %
$100,000
$5,000
60%
$150,000
40%
$200,000
30%
$250,000
24%
Group LTD benefits replace a percentage of income (often 60 percent before taxes) up to a maximum monthly benefit cap, typically $5,000. Depending on the annual salary, the monthly benefit cap can create an income replacement gap.
Plus, group LTD coverage often does not cover bonus or incentive income, and benefits are taxable.
Assumptions: 60% Group LTD benefit with a monthly cap of $5,000, before tax figures
Individual DI Insurance can help fill the gap, replacing a greater percentage of income.
For financial professional use only. Not for use with consumers or the public.

17. Structure LTD and DI for affordability
Lower the group LTD maximum monthly benefit
Benefit cap doesn’t affect most employees
Provide supplemental DI for highly compensated
Change the group LTD definition of income
Cover base salaries only with group LTD
Supplement with DI to cover bonuses/commission
Vary the max monthly benefit by employee class
Different benefit amounts for different classes can lower the overall cost of group coverage
The following strategies can help employers afford Individual DI coverage for their employees:
• Lower the group LTD maximum monthly benefit — The monthly group LTD benefit most employees receive is not affected by the maximum monthly benefit cap. However, for highly compensated employees, the benefit cap could result in a lower income replacement percentage. Reducing the group LTD maximum monthly benefit can free-up benefit dollars that could be used to purchase Individual DI coverage for those highly compensated employees.
• Change the group LTD definition of income — Update the group program to cover base salaries only and then supplement it with fully underwritten Individual DI insurance to cover bonus and/or commission income. (Does not apply to business owners)
• Vary the maximum monthly benefit by employee class — Providing different benefit amounts for different classes of employees can lower the overall cost of the group LTD program.
For financial professional use only. Not for use with consumers or the public.

18. Protecting Retirement Savings
DI Retirement Security pays monthly benefits to a trust to be accessed as retirement income.
For financial professional use only. Not for use with consumers or the public.

19. Thank you
DI | 02/2017 | © 2017 Principal Financial Services, Inc.
For financial professional use only. Not for use with consumers or the public.