THE INCOME PROTECTION

CONVERSATION

Individual Disability Insurance

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For Producer Information Only.  Not For Use In Sales Situations.

1 in 4 of today’s 20-year olds will become disabled before retiring.1

Nearly 50% of Americans would be in financial trouble in one month or less following a disability2

1Social Security Administration Fact Sheet, April 2014 | 2The Life and Health Foundation for Education (LIFE) survey, conducted by Kelton, April 2012, most recent data available | 3Employee Benefit Research Institute 2014 Retirement Confidence Survey underwritten by the Principal Financial Group®

Income protection is important

The #1 reason for an unexpected early retirement is health problems.3

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Financial advisors that take a comprehensive approach with clients,

including offering Individual Disability Insurance,earn 43% more than those that do not.

FACT

Source: 2013 Principal Life Insurance Company retail sales data

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What do you sell?

• Disability insurance• Life insurance• IRAs• Mutual funds• 401(k)• Group benefits

YOUR OPPORTUNITY Help clients protect their

most valuable asset.

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Top 5 Reasons to Sell Individual Disability Insurance

1 It’s a great door opener.

2Upon a disability, it helps your clients pay daily living expenses and bills, including premiums on other insurance products they have with you.

3 It helps you diversify your portfolio offering and provides attractive compensation.

4 It’s part of your due diligence. 

5 Solutions are available in sought-after markets (e.g., business owners and higher-income individuals)   

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IF YOU SELL GROUP BENEFITS…

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Group LTD is a good start…

Group benefits

Individual DI insurance can protect more or your

client’s income

Full paycheck. Healthy and working.

Group LTD benefits before taxes

Group LTD benefits after taxes

For the cost of 1 to 3 pennies…

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Supplemental coverage – at a discount

20% DISCOUNT1

1 – Multi-life discount. Available when three or more employees with a common employer purchase Individual Disability Insurance from Principal Life.

Referral opportunity: Your client’s coworkers need coverage, too.

Group benefits

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IF YOU SELL LIFE INSURANCE…

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Total Risk Protection

Life insurance Death benefit

Life Insurance

Disability Insurance“Living” benefit

INCOME REPLACEMENT | It takes two.

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Life Insurance

Sales Opportunities

1 Starting a career or graduating college

2Recent life change and seeking life insurance (e.g., home purchase, marriage, new baby)

3Has life insurance with a waiver of premium rider or illness advance death benefit rider

TRIGGERING EVENTS

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Streamlined Underwriting Programs

Life Insurance

Combination TeleApp: 10 additional questions

• Current employment • Business ownership• Employment tenure and

future plans• Use of disability benefits • Pregnancy

1-888-TeleApp

SELLING LIFE AND DI FROM PRINCIPAL LIFE TOGETHER

• No lab tests1

• Fewer requirements • One TeleApp call• Accelerated turnaround timing

Additional guidelines apply.

1 – Simplified DI: 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. Accelerated Life Underwriting: For those with no significant medical or non-medical conditions; based on age and face amount requirements.

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IF YOU OFFER RETIREMENT PLANNING…

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Retirement savings need protection

Retirement Planning

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.

Retirement Completion

Retirement Planning

DI RETIREMENT SECURITYPays disability benefits to a trust for retirement income.

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For Producer Information Only.  Not For Use In Sales Situations.

IF YOU OFFER INVESTMENT SERVICES…

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Income: An asset worth millions

Wealth management & Investments

AGEAnnual Income

$75,000 $100,000 $150,000 $200,000

30 $6,774,000 $9,032,000 $13,548,000 $18,064,000

40 $3,580,000 $4,773,000 $7,159,000 $9,545,000

50 $1,618,000 $2,158,000 $3,237,000 $4,316,000

POTENTIAL EARNINGS TO AGE 65 (with 5% annual salary increases)

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Manage it like any other asset

Investment management Income Protection

Wealth management & Investments

Fee: 2% of assets Cost: 2% of income

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But, can my clients afford it?

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The cost of doing nothing

Purchasing a DI policy and receiving monthly benefits in the event of

the unexpected.

Self-insuringand trying to come up with the money when

income stops.

WHAT’S MORE COSTLY?

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Coverage is affordable

OFTEN LESS THAN MONTHLY TECHNOLOGY EXPENSES

DI Assumptions: $1,000 monthly benefit, male, age 25, Michigan resident, 5A occupation class, non-tobacco, 90-day elimination period, to age 65 Benefit Period and Your Occupation Period, Residual and Recovery Benefit rider.

While we believe the information presented about the other companies  to be accurate, Principal Life Insurance Company does not guarantee its accuracy or condone its use to disparage other companies or their products.

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You’re rewarded, too.

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1 – FYCs for standard issue (GSI) cases are 45% if Employer Paid; 40% if Voluntary. Commissions may be reduced for GSI DI cases with a premium discount greater than 25%.

2 – During the Conditionally Renewable Period, a renewal commission of 4% will be paid to the servicing producer if the policy was issued after May 2006 regardless of FYCs.

3 – Renewal commissions in policy years 11 and later are contingent upon $5,000 of first-year commissions earned on disability insurance policies issued in the prior calendar year. If you’re retired and have $125,000 of individual disability insurance premium inforce at the time of your retirement, renewals will be vested in years 11 and later regardless of prior contingency. You must notify us in writing of your retirement.

FIRST-YEAR COMMISSIONS1

ISSUE AGE 18-64 50% occupation classes 6A-3A 45% occupation classes 2A-A

ISSUE AGE 65+ 4% for all occupation classes

RENEWAL COMMISSIONS2

(DI FYCs earned in year policies issued)

Years 2-5 Years 6-10 Years 11+3

$0 - $4,999 5% 5% 3%

$5,000 - $9,999 10% 7% 3%

$10,000 - $14,999 12% 10% 3%

Compensation

Strong first-year commissions

Tiered ongoing renewals

Quality Business Bonus

Quality Producer Bonus

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Annual DI premium: $30,000

Assumptions: HH750, 6A/5A/4A/3A occupation class, 100% persistency, Annual DI Premium = $30,000; Issue Ages of 18-64

Year 1 2 3 4 5 6 7 8 9 10

Cumulative earnings over 10 years:

$427,500Percentage of income from renewals: 45%

Sample earnings potential

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Questions?

Please remember to abide by the company's policy on disclosure of compensation. You can obtain more information, as well as a sample disclosure form, at 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®.

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.

Insurance issued by Principal Life Insurance Company, a member of the Principal Financial Group®, Des Moines, IA 50392.

DI9173 | 11/2014 | © 2014 Principal Financial Services, Inc