1. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners Overview Of Individual Disability Buy/Sell Funding Insurance

2. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners A well drafted business buy/sell agreement provides for the purchase of a business owner’s share of a business in the event that owner becomes totally disabled and is no longer able to work in the business. The buy/sell agreement describes the circumstances requiring a transfer of business ownership in the event of total disability or other contingencies, and includes a purchase price. Purpose Of Disability Buy/Sell Agreements

3. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners A list of all owners specifying their interests A firm or enforceable obligation to buy or sell A definition of the event that would trigger the obligation to buy or sell A value, in the event of death, disability or voluntary withdrawal A stated purchase price or method for calculating the purchase price Buy/Sell Agreements Include

4. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners Disability insurance like The Standard’s Business Equity Protector SM works with a buy/sell agreement by providing a source of funds to purchase the interest of a disabled business owner. Funding A Buy-Out Obligation

5. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners Funding a buy-out obligation with disability insurance serves a dual purpose: It provides a source of funds for the purchase of the disabled owner’s interest in the business, thereby keeping control of the business closely held. It provides the disabled owner with fair compensation for his or her equity in the business. Funding A Buy-Out Obligation

6. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners The Business Equity Protector policy can be owned by the business or by individual business owners. A valid buy/sell agreement must be in effect within one year after the Business Equity Protector policy is put in force. Policy benefits are payable on a monthly basis, or in one lump sum, or with a partial lump sum down payment followed by monthly payments. Business Equity Protector

7. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners Definition of Total Disability Under the Business Equity Protector policy, you are considered totally disabled if because of your injury or sickness: You are unable to perform the substantial and material duties of your regular occupation; You do not perform any work for the business; and You are under the regular care of a physician appropriate for your injury or sickness. The physician’s care requirement will be waived when The Standard receives written proof, satisfactory to The Standard, that further care would be of no benefit to you. The business includes any subsidiary or parent company of the business and any company that provides contracted services to the business.

8. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners The regular occupation is your occupation at the time disability begins. The work you perform in your regular occupation must be the same work you do in your active full-time employment for the business entity. Regular Occupation

9. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners The amount of benefits for total disability The Standard will pay will equal the buy-out expense. However, the benefit may not exceed your share of the true value of the business at the time of disability. continued on next slide Benefit for Total Disability

10. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners After age 61, the benefit payable would be multiplied by the percentages shown below: Percentage of Total Disability Starts: Benefit Limit: On or after your 61st birthday, but before your 62nd birthday:80% On or after your 62nd birthday, but before your 63rd birthday:60% On or after your 63rd birthday, but before your 64th birthday:40% On or after your 64th birthday:20% Benefit for Total Disability (cont’d)

11. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners An Extended Benefit Rider is issued to insureds aged 18 - 50. It delays the reduction of benefits described in the preceding slide until age 65 and provides reduced coverage until the policy anniversary following the insured’s age 70 Extended Benefit Rider

12. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners Business Equity Protector is designed primarily for professional partnerships and corporations with five or fewer principals. Medical, dental and legal practices with as many as ten principals are also eligible. Individual consideration is given to businesses with more than ten owners, although underwriting pre-approval is required. Types of Businesses

13. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners Individuals not eligible for disability insurance coverage other than group insurance coverage are generally declined. The business must have been in existence for at least three years. Exceptions are considered on a case- by-case basis. Generally, all eligible business owners must apply for coverage. No money should be collected on buy/sell applications. Coverage Possibilities

14. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners Participation with other disability insurance buy/sell coverage is possible if coordination of benefits is allowed by law. If participating with other coverage, the waiting periods must be the same. The Standard must be advised when there is other coverage in force. Coverage Possibilities

15. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners Business Equity Protector Policy Summary, form SI 1062form SI 1062 Business Equity Protector Sample Policy, form SI 1060form SI 1060 Business Equity Protector Sample Policy (CA only), form SI 1060CA.form SI 1060CA. The Standard’s Financial Strength, form 13983 form 13983 We Are The Standard, form 14860form 14860 Find Out More

16. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners A national leader and pioneer in innovative disability insurance for individuals and businesses, The Standard has been keeping its promises since 1906. You can count on it to do the same for you. Trust The Standard

17. © 2010 Standard Insurance Com Formpany SI 2287PPT (Rev 1/14) Buy/Sell Funding Insurance Presentation for Business Owners