1. Disability with a Difference
Short-term and long-term disability coverage
At Principal, we take pride in offering tailored disability designs that meet the needs of employers of all sizes. With our flexible, comprehensive products, employers can offer group disability solutions that provide the protection employees need.
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2. Disclaimers
Disability insurance issued by Principal Life Insurance Company, 711 High Street, Des Moines, IA
This is an overview of the benefits of group disability insurance from Principal Life, but there are limitations and exclusions. For cost and coverage details, contact your Principal representative. This information is provided with the understanding that Principal® is not rendering legal, accounting or tax advice. Consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.
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 Principal®.
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.
GP | 12/2017 | © 2017 Principal Financial Services, Inc.
For producer information only. Not for use with consumers or the public. This is an overview of the benefits of group insurance from Principal Life, but there are limitations and exclusions. Availability of product options may vary by state. Some products and provisions are not available in all states
GP | © 2016 Principal Financial Services, Inc. | 12/2017

3. Disability solutions
Our flexible disability options make customizing a disability program for clients easy! Whether you’re looking for basic disability coverage or comprehensive coverage rich in added benefits, Principal can help. Our contracts are built from the ground up, to help provide a tailored product that fits each employer’s needs.

4. Products STD/LTD increments
Disability solutions
Products
Short-term
disability
Long-term
disability
STD/LTD increments
STD/LTD
increments
Individual disability
Working together: Principal is one of only a few providers to offer both individual and group disability insurance.
Highlights
Disability insurance:
One of most important, but often overlooked employee benefits.
Protects one of an employee’s most valuable assets – their ability to earn an income when too ill or injured to work.
We offer short-term disability (STD), long-term disability (LTD), combination, incremental protection, and individual disability insurance.
Employer-paid and employee-paid solutions available
Consistent provisions make it easy to sell combination group and individual.
For producer information only. Not for use with consumers or the public.

5. Features Flexible and affordable solutions
Disability solutions
Features
Flexible and affordable solutions
Unbundled designs for customized packages
Incremental options for both STD and LTD
In-house staff of claim professionals
Extensive Return-to-Work resources
Choice of three Employee Assistance Programs
Principal’s flexible, unbundled products are the key to allowing clients to design the disability program that meets their specific needs. Plus, Principal was one of the first companies to introduce comprehensive disability claims management. Our in-house registered nurses assist claimants with rehabilitation and encourage return to work. And our choice of three EAP options means each employer can provide the amount of emotional assistance needed.
For producer information only. Not for use with consumers or the public.

6. Products
You can mix and match from a variety of short-term and long-term disability product options to create the best solution for each client.

7. Short-term disability
Disability solutions
Short-term disability
Standard features
Own job definition
“Or” definition of disability
Wide range of elimination period options
Business owner compensation
Optional features
Work incentive benefit
Rehabilitation incentive benefit
Reasonable accommodation benefit
Benefit percentage
40%, 50%, 60% or 66 2/3%
70% available for traditional
Maximum weekly
benefit
Traditional–up to $2500
Voluntary–up to $1500
Voluntary increments–
$100 to $1500
Short-term disability is available in employer-paid and voluntary versions that can cover non-work-related disabilities or provide 24-hour coverage. Self-funded short-term disability is available to employers with 100 or more eligible employees and one insured product from Principal Life. We also offer incremental benefits for employees to choose the amount they feel is affordable but beneficial.
For producer information only. Not for use with consumers or the public.

8. Long-term disability Standard features Optional features
Disability solutions
Long-term disability
Standard features
“Or” definition of disability
Wide range of elimination period and benefit duration options
Work and rehabilitation incentive benefits
Business owner compensation
Optional features
Extended earnings protection
Medical premium supplement
Return-to-work childcare
Activities of daily living
Spouse rehabilitation
Reasonable accommodation
Benefit percentage
40%, 50% or 60%
66 2/3% available for traditional
Max monthly benefit
Traditional-up to $15,000
Voluntary-up to $10,000
Voluntary increments-
$500 - $6000
Principal’s long-term disability contract provides 24-hour disability coverage for both work-related and non-work-related disabilities in both employer-paid and voluntary options. Coverage can be customized for each client through options available within a variety of features, including benefit percentage, maximum monthly benefit and benefit duration. Principal also provides employees with the ability to purchase LTD incremental benefits in an amount they can afford.
For producer information only. Not for use with consumers or the public.

9. Put employees in charge
Disability solutions
Put employees in charge
STD and LTD incremental benefits
STD Increments
LTD Increments
Benefit increment amount:
$50
Minimum election per week:
$100
Maximum election per week:
$1,500
Benefit increment amount:
$100 or $250
Minimum election per month:
$500
Maximum election per month:
$6,000
Benefit cannot be more than 60% of their pre-disability earnings. For producer information only. Not for use with consumers or the public.
With incremental benefits, employees can choose the benefit amount they’d like to receive if they are unable to work because they’re too sick or hurt. This employee-paid solution offers incredible flexibility, since no two employee’s needs are the same. Employees can purchase the amount of coverage they need and can afford.

10. Employee choice — LTD Basic Richer
Disability solutions
Employee choice — LTD
Greater customization — Additional provisions give employers even more options.
Create two designs:
Basic
Richer
Three recommended provisions
Meaningful coverage
Employee selects
Employee Choice
Available with voluntary long-term disability
Offers flexibility and choice
Keeps selection process simple
Create 2 designs (basic and richer) – one at a lower cost
Employers select from 3 recommended provisions having greatest impact on cost:
Benefit percentage (percentage of salary paid)
Benefit duration (how long benefits can be paid)
Elimination period (waiting time until benefits are paid)
Additional provisions may be selected for even greater customization
Employees select desired option during enrollment
Giving employees a choice:
Creates better employee experience
May lead to higher participation
For producer information only. Not for use with consumers or the public.

11. Employee choice – LTD Sample design Benefit percentage 50% 60%
Disability solutions
Employee choice – LTD
Sample design
Basic
Richer
Benefit percentage
50%
60%
Benefit duration
2 years
To age 65
Elimination period
180 days
90 days
Employers select from 3 recommended provisions having greatest impact on cost:
Benefit percentage (percentage of salary paid)
Benefit duration (how long benefits can be paid)
Elimination period (waiting time until benefits are paid)
Additional provisions may be selected for even greater customization
Employees select desired option during enrollment
Giving employees a choice:
Creates better employee experience
May lead to higher participation
For producer information only. Not for use with consumers or the public.

12. Provisions
It’s important to understand the group disability contract. A single word or phrase can make a big difference. Be sure to examine the common provisions and contract language of the coverage

13. Definition of disability
One small word makes a big difference
Unable to perform the majority of substantial duties of their own job (for STD) and occupation (for LTD) or
Unable to earn 80% of their pre-disability income while working in a modified capacity
This means: employees who are not totally disabled may still qualify from day one.
The definition of disability is the most important provision in a disability contract. Principal Life’s “Or” definition provides comprehensive protection, with a focus on recovery and returning to work. Under this definition, employees may qualify as disabled by meeting either of the criteria shown here.
Residual “or” definition of disability – Allows employee who isn’t totally disabled to still qualify for benefits.
For producer information only. Not for use with consumers or the public.

14. Own job vs. own occupation
We use an “own job” definition of disability instead of the more common “own occupation”
Most carriers expect employees on STD leave to return to their original job. We look at the job they’re performing on the date of disability, not the broader occupation.
Most carriers have Own Occupation language in their short-term disability and long-term disability definitions of disability. Principal Life recognizes the importance of providing an “own job” definition in short-term disability contracts since typically, short-term disability coverage is purchased as a replacement for sick leave, with the expectation that the employee will return to his or her original job. So the evaluation of disability should look at the job the employee is performing on the date of disability, not the occupation.
For producer information only. Not for use with consumers or the public.

15. Protection for owners of growing businesses
Income example
Business owner net income
2015
2016
Owner’s share of business profits
$49,000
$61,000
Owner’s salary (W-2)
+$63,000
+$43,000
Total 2015 and 2016 income
=$112,000
=$104,000
Two-year average
$108,000
At Principal, we understand business owner income can’t be measured by salary alone. The table above highlights the complete earnings profile of a business owner by looking at both his or her salary and at business profit.
For producer information only. Not for use with consumers or the public.

16. Protection for owners of growing businesses
Benefit comparison
Contract compensation type
Insured income
Life 1x salary benefit
LTD 60% benefit
Base wage definition
$43,000
$2,150
W-2 two-year average
$53,000
$2,650
Principal definition
$108,000
$5,400
 This table demonstrates the difference between insured income under Principal contracts and the wage language used in other industry standard contracts. As you can see, with the definition of compensation in our contract, Principal covers significantly more income in the event of a disability or death.
For producer information only. Not for use with consumers or the public.

17. Services
Principal offers extra services employers can use to assist with day-to-day employee needs.

18. Managed disability services
Disability solutions
Managed disability services
Registered nurses
Rehabilitation
Return-to-work
Occupational associate
Assist with job placement
Collaborates with state resources
Claim professionals
Disability management
Rehabilitation
Social Security specialists
Identification
Coordination
Our in-house professional staff focuses on creating the best solution for each claimant. Registered nurses assist with rehabilitation and encourage claimants to return to work, and our occupational associates assist with job development and placement. Claim professionals provide disability management and rehabilitation services. Plus, we work with Social Security specialists who identify claimants who may qualify for Social Security Disability Insurance, and we offer support through the application process.
For producer information only. Not for use with consumers or the public.

19. You should know Short-term disability Long-term disability
Disability solutions
You should know
Short-term disability
Long-term disability
Maternity payments may be fronted a lump sum
100% Return to Work incentive – no offset with Return-to-Work income unless earnings exceed 100% of pre-disability earnings
Claimants can return to work twice the number of days as the qualifying period
Rehabilitation incentive: Intended to influence an employee to return to work and to participate in a rehabilitation program. When totally disabled employees participate and satisfy the requirements of the rehabilitation plan, their benefit percentage increases by 5%*
Principal helps make it easy for clients to be covered in the event of a short-term or long-term disability.
Maternity payments may be received in a lump sum
Incentives are offered for employees, including a Return to Work incentive for short-term disability and a rehabilitation incentive for long-term disability. An example of a rehabilitation incentive is: 60% benefit increases to 65% with this option
For producer information only. Not for use with consumers or the public.
* Employees are eligible for 12 months of rehabilitation incentive benefit payments.

20. Claim filing Fax Online Paper
Disability solutions
Claim filing
Fax
Online
Paper
Single claim form – Employees can submit a single claim form for STD, LTD, Individual Disability income and Life Waiver of Premium
A single claim form can be submitted for STD, LTD, Individual Disability Income and Life Waiver of Premium.
Claims can be filed online, by paper, by fax and in some cases, by phone.
For producer information only. Not for use with consumers or the public.

21. Return-to-work resources
Disability solutions
Return-to-work resources
Included with both STD and LTD
Personal rehabilitation plans
Work and rehabilitation incentives
Reasonable accommodation benefits
principal.com/returntowork
Return-to-Work Resources
Full service program
Encourages employees to get back on their feet and back to work
Resources include: personal rehabilitation plans, work and rehabilitation incentives, and reasonable accommodation benefits
For producer information only. Not for use with consumers or the public.

22. Employee Assistance Program (EAP)
Disability solutions
Employee Assistance Program (EAP)
Service levels:
Core
Enhanced
Premier
For employees and their families
For everyday and not so everyday challenges
Included with STD* or LTD
Employee Assistance Program
Employee Assistance Program – employee resource for life’s challenges
Available with employer-paid or voluntary STD or LTD coverage
Employer selects service level:
Core – Included as standard benefit. Provides: employee confidential assistance via phone consultation, online resources, referrals to community resources.
Enhanced – Provides same services as Core, plus legal and financial services.
Premier – Provides employee confidential assistance via phone consultation, online resources, referrals to community resources. Includes face-to-face services, onsite and online training, reporting, consultation and face-to-face visits. Employer may add for additional fee: legal and financial services and work-life services.
This service is not part of the coverage and may be changed or discontinued at any time. For producer information only. Not for use with consumers or the public.
*Not available with self-funded coverage.

23. Understand tax implications
Disability solutions
Understand tax implications
Premium payment
Benefit
Non-contributory
Pre-tax
Fully taxed
Voluntary
Post-tax
Tax-free
Gross-up
Tax choice
Employee’s choice
Fully taxed or tax-free
Because group disability benefits can be structured a number of ways, understanding the tax implications can be challenging. Employers determine the plan type that best fits their needs.
For producer information only. Not for use with consumers or the public.

24. W-2 preparation and FICA match
Disability solutions
W-2 preparation and FICA match
W-2 services
FICA services
Create and distribute W-2s to employees
Report disabled employees’ W-2 income to government agencies
Provide daily, quarterly and annual reports
Calculate and deposit employer FICA match with government agencies
Report employer FICA match on our tax deposits
Issue W-2s to employees who received disability benefits
Provide reports
Employers have more than enough challenges to deal with as they manage day-to-day business. That’s why Principal offers group disability customers a value-added, time-saving benefit of W-2 preparation and FICA services. And it’s easy to view W-2 and FICA tax services online anytime via the eService benefits administration system.
Employers can choose from W-2 preparation services only or both W-2 and FICA match services. They receive daily disability summaries and Principal calculates and withholds employee tax witholdings and then deposits with appropriate government agencies.
For producer information only. Not for use with consumers or the public.

25. Thank you
Thank you for taking the time to learn about our products and services. Working together, we can help you serve your clients even better, and add revenue to your bottom line.