1. Baltimore, MD 6/29/04 Presented by: Michael J. Kelly, CHU, RHU Qualified Sick Pay Plan Presentation

2. Welcome Purpose – Desired Outcome Market Potential Existing Clients Opportunity To Improve Bottom Line

3. Identify Prospects / Problem Typical Scenario Salary Continuation Without A Plan Ad Hoc Consequences Solutions The Logical Solution

4. Presenting The Problem And The Solution

5. Insured Qualified Sick-Pay Plan The success of your business depends on the hard work and talents of your employees. But what if one of your key employees gets sick or injured and cant work?

6. The Odds… Consider the chances of a long-term* disability striking one of your employees. Age Number of People in a Group 123456 2557.81%82.20%92.49%96.83%96.66%99.44% 3055.14%78.97%90.35%95.56%97.97%99.07% 3550.10%75.10%87.57%93.80%96.91%98.46% 4045.33%70.11%83.66%91.06%95.11%97.33% 4539.64%63.57%78.01%86.73%91.99%95.17% 5032.87%54.93%69.75%79.69%86.37%90.85% 5524.63%43.19%57.18%67.73%75.66%81.67% 6014.17%26.33%36.76%45.72%53.41%60.01% The group of people consists of an average of males and females in all occupation classes both sexes and all classes were waited equally. Based on the 1985 CIDA table and the 1980 CSO table. *Long-Term Disability is defined as lasting 90 days or more.

7. Employer Concern… Where will the money come from? Employee Concern… How will I continue my employees salary? How will I continue to support myself and my family?

8. Your Alternatives… No plan Self-Funded Qualified Sick-Pay Plan Insured Qualified Sick-Pay Plan Which will you choose?

9. No Plan… You lose the tax deduction. (The IRS doesnt consider disability compensation a business expense.) You lose productivity. (Youre paying an employee who isnt producing.) You lose employee morale. (It isnt clear wholl get paid. Or when.) Can you afford not to have a plan?

10. Self-Funded Qualified Sick-Pay Plan… Put a plan in writing and youve started to solve the problem. Compensation paid during disability is a tax-deductible business expense. Employee moral is boosted. But you are still paying a nonproducing employee. Where will you get the money?

11. Insured Qualified Sick-Pay Plan… The Plan is funded with disability income insurance. You make tax-deductible premium payments. Those premiums arent added to your employees taxable income. The insurance company makes claim decisions. Plus…

12. Insured Qualified Sick-Pay Plan… The insurer pays benefits so… you no longer pay nonproducing employees. Premiums are waived when a covered employee becomes disabled. Security for your employees. And you. The affordable solution.

13. The Cost… Lets compare the annual cost of just one disabled employee. *Assume a 34% corporate tax-rate **Typical annual premium on an individual policy for a 40-year-old employee. Premiums on coverage for disabled employees are waived during disability. No PlanSelf-Funded Qualified Sick-Pay Plan Insured Qualified Sick-Pay Plan Pre-Tax Profit$100,000Profit$100,000Profit$100,000 Income Tax*34,000Sick-Pay50,000Premium**1,500 Net Profit66,000Pre-Tax Profit50,000Pre-Tax Profit98,500 Sick-Pay50,000Income Tax*17,000Income Tax*33,500 Net Cash Flow $16,000Net Cash Flow $33,000Net Cash Flow $65,000

14. Individual-Group Combination… Key employees covered by all individual disability income. All other employees covered by economical group coverage. OR Key employees covered by a combination of individual and group coverage. All other employees covered by economical group coverage.

15. Group Long-Term Disability… Cost effective. Ease of administration. Coverage available to employees on every job level. Benefits may be varied among occupational classes.

16. Individual Disability Income… Premiums are guaranteed. Coverage is non-cancelable. Coverage is portable. Liberal benefits are tailored for key employees.

17. QSPP Documents Board of Directors Resolution Plan Letter

18. Creative Solutions All Individual DI Combination Plans Executive Bonus Split $ / Split Benefit Periods

19. Conclusions Unique – Market Differentiation Appointments / Presentation Cross-Selling Opportunity Problem Solver Information Needed Proposals Follow-Up