Product Provisions

1. Source Brokerage, Inc. Product Provisions

2. Choosing a DI Product Strong company Flexible plan Competitive price

3. Three Occupation Definitions • OWN OCCUPATION–Unable to engage in “own” occupation. (“True” own occ) • OWN OCCUPATION & NOT ENGAGED – Unable to engage in “own” occupation and not engaged in any occupation for wage or profit. (Modified definition of disability) REASONABLE OCCUPATION – Unable to engage in any occupation based on education, training or experience.

4. Basic Policy Provisions

5. Basic Policy Provisions • Non-can and Guaranteed Renewable  Guaranteed Renewable •  Conditionally Renewablefor Life

6. Basic Policy Provisions •  Premiums waived after 90 days •  180-day break in waiting period •  Surgical transplant •  Rehabilitation benefits in addition to monthly DI benefit •  Specific or Presumptive Loss

7. Plan Flexibility To Age 65 Own Occ (Pure or True) To Age 65 Own Occ & Not Engaged (Modified) 60MonthsOwn Occ Reasonable Occupation 60 Months Own Occ & Not Engaged Reasonable Occupation 24 Months Own Occ Reasonable Occupation 24 Months Own Occ & Not Engaged Reasonable Occupation

8. DI Jeopardy How long does the average disability last? What is the most economical elimination period for professional occupations? Which definition of disability enables the policyholder to collect disability benefits while he/she is engaged in another gainful occupation?

9. Riders

10. Residual & Partial Riders Residual/Partial 24-Month Residual/Partial 6-Month Residual/Partial Full Benefit Proportional Benefit NoBenefit 0%-20% 20% - 80% 80% - 100%

11. Long-Term & 24-Month Residual Riders •  20% loss of prior monthly earnings •  Unable to perform one or more of the material and substantial duties of your occupation; or •  Unable to engage in your occupation for 80% of the time, as was usual prior to the start of your disability.

12. Inflation Rider

13. Inflation Rider • Increases benefit while policyholder is disabled and collecting benefit • CPI-U linked •  Up to 6% compounded

14. Social Insurance Substitute Rider(SISR)

15. Integrate With Social Security Purpose: Lowers monthly premium • Client eligible for $5,000 monthly benefit • Base Benefit = $4,000 • SSI Benefit = $1,000

16. SISR Benefit Payment $-for-$ offset Claim Example 1 Maximum Benefit = $5,000 SS pays $1,000 Base Benefit pays $4,000 Total Monthly Benefit $5,000

17. SISR Benefit Payments Example 2 Maximum Monthly Benefit $5,000 SS pays None Base Benefit = $5,000 Total Monthly Benefit = $5,000

18. Automatic Increase Rider (AIR)

19. AIR • Increases benefit while policyholder is working • 3% annual increase for 5 years • No financial or medical evidence required • Additional 5-year benefit option available with proof of insurability

20. Guaranteed Physical Insurability Rider (GPIR)or Future Purchase Option (FPO)

21. GPIR or FPO • No medical evidence required when exercising increases • Must provide financial verification for increased benefit such as W-2, pay stub or tax return

22. DI Jeopardy • In what instances will a person be eligible for Social Security disability benefits? • Which rider increases the monthly benefit if the policyholder is working? • What is the window of time a disability can reoccur without requiring the claimant to satisfy a second elimination period?

23. Exclusion Limitations

24. Exclusions/Limitations  Incarceration  War or act of war  Undisclosed pre-existing conditions  Intentional self-inflicted injury or sickness  24-Month Drug, Alcohol, Mental and Nervous Endorsement, unless hospital confined

25. Competitive Premium Features

26. Competitive Premium Features  25% Tobacco Differential  15% - 20% Multi-Life Discount  15% Association Discount  Unisex and Sex-Distinct Rates

27. DI Jeopardy Are DI premiums more expensive for men or women? What affect does the SSI rider have on the DI premium? What is the most common reason people give for not purchasing a disability income policy?

28. Business Protection Plans • Business Overhead Expense- covers overhead expenses while owner is disabled, if there is a loss of income. • Buy/Sell- if one owner becomes disabled, buys out the partnership for the other owner/owners

29. Business Overhead Expense Expenses Covered: • Employees’ salaries • Utilities • Rent • Salary for business owner’s temporary replacement (usually 6 months) • Interest payments on business debt

30. Business Overhead Expense Expenses not covered: • Policy-owner’s salary • Renovations to office or expansions of the business during disability

31. DI Jeopardy What is a good rule of thumb to determine if an expense is covered under Business Overhead Expense (BOE) policy? What is the longest benefit period available in a Business Overhead Expense (BOE) policy?

32. Multi-Life DI Plans Guaranteed Standard Issue (No Medical Underwriting) with premium discounts for employer-paid and voluntary benefit programs.

33. Benefits for Client • Supplements LTD benefits with individual plan to insure 90% of the net income. • Unisex rates • No medical underwriting

34. Benefits for Producer • Build upon existing LTD programs • Simplified underwriting and application process. • Census • No medical underwriting

35. Maximum Issue Limits Varies based on the number of participants. Some carriers will offer plans on GSI basis for as few as 5 executives and up.

36. Take a Break Next Up: The DI Sales Presentation