Disability Income Retirement Security for:

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Disability Income Retirement Securityfor
Twins, Inc.

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Program Overview

• You have probably started saving for retirement.
  
• What would happen if you suffered a disabling
  illness or injury and could not work?
• Would you be able to continue your retirement
  contributions without an income?

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Impact of a permanent disability  on
retirement savings at age 40
Retirement Assets
Age
Assumptions 2,000/month contributions beginning 
at age 30, 8 rate of return and age 65
retirement. Consequences of disability at age 40, 
without DI Retirement Security.
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Impact of a 5-Year disability on
retirement savings 
Retirement Assets
Age
Assumptions 3,000/month contributions beginning 
at age 30, 8 rate of return and age 65
retirement. Consequences of fiveyear disability a
t age 40, without DI Retirement Security
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Program Overview

• Traditional Individual Disability Income (DI)
  Insurance Policy
• Pays a monthly benefit to help you cover personal
  living expenses (mortgage, car payments,
  utilities, etc.) during a disability.

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Program Overview

• Details of Principals DI Retirement Security
  Program
• Upon total disability, a monthly benefit is paid
  to an irrevocable trust, which in turn invests
  the funds as directed by the insured.
• A Disability Income Benefit is provided, designed
  to help you towards financial security during
  your retirement years.
• A Disability Income Benefit is paid in addition
  to any existing Disability Income Coverage. (ie
  Group, Association, Individual, Social Security,
  Etc)

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How does it work?
Before Disability The Insured pays Insurance
Premiums
Insured
Principal Life
Upon Disability Principal pays Disability
Income Insurance Benefits, which the Trust invests
Upon Reaching The Benefit Period The Insured
may begin receiving Trust Assets, per the terms
of Principals Declaration of Trust Agreement
Irrevocable Trust
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Program Guidelines

• Maximum Monthly Benefit is 15 of Income to a
  Maximum of 3,675/mth.
• The IRS Defined Contribution maximum contribution
  is 44,000 per year. (44,000 / 12 3,675)
• The IRS has historically increased this amount
  each year to keep up with inflation. Principal
  will increase the Maximum Monthly Benefit as the
  IRS increases the maximum contribution allowed.
• There is a 50 Trust Administration Fee,
  therefore the actual Monthly Benefit to the
  Insured would be 3,725/mth.
• Minimum Monthly Benefit is 1,000/mth.
• Negotiable for Multi-Life cases.

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What Does the Client Receive at the End of the
Policy Benefit Period?

• Client has access to Benefits at the end of the
  Policy Benefit Period. (Typically Age 65 or 67)
• Trust Benefits are received tax-free on the
  basis.
• Any increases on investments will be taxed as
  Capital Gains or Ordinary Income, depending
  on the investment vehicle chosen.
• Should the Client pass away before the end of the
  Benefit Period, the value of the Trust will pass
  to the Clients Estate.

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Trust Investment Options

• Client will be able to direct investment options.
• Options will include Mutual Funds, Equity, Bond
  and Fixed Account alternatives.
• Trustee is Bankers Trust Company.

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Example

• A Client earns 200,000 a year
• 200,000 x 15 30,000
• 30,000 divided by 12 months 2,500 50 Trust
  Administration Fee 2,550
• 2,550 lt 3,725 (Maximum Benefit allowed under DI
  Retirement Security)
• Insured would apply for 2,550
• (Male, Age 40, 5A Occ. Class, 180 Day EP, Age 65
  BP - 60.70 mth.)

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Program Guidelines

• Single-Life and Multi-Life Cases. (Employer Paid
  or Voluntary. Benefit Amounts increase if
  Employer Paid)
• Issue ages
• 18-60
• Benefit Periods
• To age 65 To age 67
• Your Occupation Periods
• 2 year, 5 year, To Age 65 and To Age 67
• Elimination Periods
• 180 or 365 days
• To Age 67 for HH 750 only

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Program Guidelines

• Riders
• Automatic Increase Option (AIO)
• Cost of Living Adjustment (COLA)
• Discounts
• Multi-Life (3 Lives) 20 off Unisex Pricing!
• Mental/Nervous Substance Abuse Disorder
  Limitation 10
• - Required on policies written in and for
  residents of AZ, CA, FL, LA, MI, NM, NV.
  Optional on Multi-Life Cases. Discount still
  applies.

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Whats needed to apply

• DI Retirement Security Supplement Form, if
  applying for other DI coverage at the same time.
  Full DI Application if applying for DI Retirement
  Security only.
• Signed Trust Agreement.
• Principals Simplified Underwriting Guidelines
  will apply. (Financial and Medical Underwriting
  Requirements, as needed)

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Will I ever be Totally Disabled?

• Total number of Principal claim payments in 2005
  was 1,718.
• Total Disabilities made up 83 of those claims!
• 31 of claims lasted 25 months to 5 years.
• 36 of claims lasted over 5 years!

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Thank you!The Kenneth A Bloch Agency(704)
643-0999 Officeken_at_plusgroupnc.com
Home Office Principal Life Insurance Company,
Des Moines, IA 50392 Approval 8192112006