1 DISABILITY INCOME PROTECTION Item 235 Safe. Sound. Secure.
2 P eople work hard to afford what they enjoy in life, and to pay their continuing expenses such as food, clothing, shelter, utilities, insurance premiums, and entertainment. Their ability to earn an income is their most valuable asset. If that ability is interrupted because of an accident or sickness, they may find it difficult to maintain their standard of living and impossible to plan for the future. Unfortunately, the chance of a disabling accident or sickness is greater than most people think. 1 out of 4 workers, age 35-65, will be disabled for 90 days. ** Disability is the cause of nearly 50% of all home foreclosures. ** Before age 65, if a disability lasts 90 days, it is expected to last an average of 2 1/2 years. *** 80% of U.S. workers will exhaust their savings in only two months without the ability to earn an income. *** * Society of Acturaries ** National Association of Life Underwriters *** Commissioner s Disability Table Auto-Owners Disability Income Policy Will Provide Money to Replace Loss of Earned Income While Totally Disabled from Sickness or an Accident 1. Worldwide, 24-hour-a-day coverage while on or off the job. 2. Benefit periods of 2 years, 5 years, or to age Waiting periods (the number of days before benefits begin) are 30, 60, 90 or 180 days. 4. Coverage is guaranteed renewable to age Premium rates can be changed on a class basis only. Any change will apply to all policies of this type and having a common policy form number. 6. A non-smoker discount is given to those who have not smoked cigarettes for 12 months or more. 7. Premiums are waived retroactively after 90 consecutive days of total disability. 8. First Day Disability Income Benefit may be added to provide a daily income while hospital confined. 9. An optional Accidental Death and Dismemberment Benefit may be added for any amount from $10,000 to $100, A Partial Disability Benefit is included at no additional premium. Partial disability must follow a period of total disability for which benefits were paid. The Partial Disability Benefit equals one half the monthly benefit paid while totally disabled, for up to six months or until the end of the benefit period, whichever is less.
3 Determining Maximum Disability Benefit Available MAXIMUM MONTHLY BENEFIT AVAILABLE Use Net Annual Income Table Subject to Maximum by Occupation Less: $ Existing Disability Income Benefit * $ Less: Unearned Income ** $ Equals: Maximum Monthly Benefit Available *** $ The MINIMUM Disability Benefit which can be purchased is $300 per month. * Other Disability policies, salary continuation or sick pay benefits likely to last more than 26 weeks. ** Unearned income includes rents, pensions, investment income, etc. Ignore unearned income less than 10% of gross income. Use 50% of unearned income if it is 10-50% of gross income. Not eligible if unearned income is 50% or more of gross earnings. *** The maximum monthly benefit which can be purchased is the lessor of the maximum amount listed in the Net Annual Income Table or the maximum based on the Occupation Table below. Net Annual Income Table Net Maximum Net Maximum Annual Income * Mo. Benefit Annual Income * Mo. Benefit $20,000 $1,250 $46,000 $2,650 20,500 1,280 48,000 2,760 21,500 1,310 50,000 2,830 21,500 1,340 52,000 2,950 22,000 1,380 54,000 3,060 22,500 1,410 56,000 3,170 23,000 1,440 58,000 3,240 23,500 1,470 60,000 3,300 24,000 1,480 65,000 3,520 24,500 1,510 70,000 3,790 25,000 1,540 75,000 4,000 25,500 1,570 80,000 4,200 26,000 1,600 85,000 4,390 26,500 1,630 90,000 4,500 27,000 1,670 95,000 4,670 27,500 1, ,000 4,750 28,000 1, ,000 5,040 28,500 1, ,000 5,200 29,000 1, ,000 5,530 29,500 1, ,000 5,720 30,000 1, ,000 6,000 31,000 1, ,000 6,270 32,000 1, ,000 6,520 33,000 1, ,000 6,900 34,000 2, ,000 7,130 35,000 2, ,000 7,330 36,000 2, ,000 7,880 37,000 2, ,000 8,000 38,000 2, ,000 8,450 39,000 2, ,000 8,870 40,000 2, ,000 9,500 42,000 2, ,000 10,000 44,000 2,530 Occupation Table Occupation Subject to Monthly Maximum Maximum Benefit of Benefit Period $10,000 To 65 AAA 8,000 To 65 * Net Annual Income for self employed individuals = Gross income from employment less business deductions before personal exemptions. Gross income includes wages (not overtime pay), salaries, bonuses, commissions, fees or other payments for personal services. Use 2 year average for commissioned sales personnel. NOTE: Should the actual net annual income fall between the listed amounts, use the maximum for the next highest listed net annual income amount. AA 6,000 To 65 A 4,000 5 Years B 3,000 5 Years
4 1 Disability Income Premium Item 235 Annual non-cigarette smoker premium per each $100 unit of monthly benefit Benefit Period - Male 2 Year 5 Year To 65 Waiting Waiting Period Period (Days) (Days) Benefit Period - Female 2 Year 5 Year To 65 Waiting Waiting Period Period (Days) (Days) $18 $14 $13 $25 $21 $19 $32 $27 $24 $21 AAA AA A B $24 $19 $16 $35 $28 $24 $46 $39 $33 $28 AAA AA A B AAA AA A B AAA AA A B AAA AA A B AAA AA A B AAA AA A B AAA AA A B AAA AA A B AA AA A B AAA AA A B AAA AA A B AAA AA A B AAA AA A B See back panel for Premium Calculation Worksheet
5 2 First Day Disability Income Beneﬁt While Hospital Conﬁned Item 236 Beneﬁt amount must equal base policy s monthly disability beneﬁt. Annual non-cigarette smoker premium per each $100 of monthly beneﬁt Occupation Beneﬁt Period - Male Base Policy Waiting Period (Days) $2.70 $2.80 $2.90 $ Occupation Beneﬁt Period - Female Base Policy Waiting Period (Days) $3.70 $3.80 $3.90 $ Accidental Death and Dismemberment Beneﬁt Item 237 Minimum beneﬁt, $10,000; Maximum beneﬁt, $100,000 Annual non-cigarette smoker premium per $1,000 of coverage. Male and Female Occupation Rate AAA AA A B $ AAA AA A B $
6 PREMIUM CALCULATION Annual Premium per each $100 of Monthly Beneﬁt Name Monthly Disability Beneﬁt $ Male Female Occupation : Beneﬁt Period: Waiting Period: 2 Year 30 Day AAA 5 Year 60 Day AA To Day A B 180 Day 1 Item 235 Individual Disability Income: $ x = $ Non-smoker premium per $100 unit Number of Units Non-smoker premium per $100 unit Same number of units as above 2 Item 236 Optional First Day Disability Income Beneﬁt While Hospital Conﬁned: $ x = $ 3 Item 237 Optional Accidental Death and Dismemberment Beneﬁt: $ x $ = $ Non-smoker premium per $100 unit Amount Subtotal = $ Cigarette smoker surcharge, if applicable: Add 10% of Subtotal = $ Add Annual Premium Adjustment Factor = $ All States Except KY add $1 KY add $20.00 TOTAL ANNUAL PREMIUM = $ $ Semiannual Premium.52 $ Quarterly Premium.265 $ Monthly EFT Premium.086 Determining Monthly Beneﬁts To Be Paid To determine the monthly disability beneﬁt, we will divide the monthly loss of income by the pre-loss income and multiply the result by the Monthly Beneﬁt purchased, as shown on the Policy Data Page. Monthly Loss of Earned Income Example: $2,000* Pre-Loss Earned Income $3,000 x Monthly Disability Beneﬁt Purchased $2,000 = Monthly Disability Beneﬁt Paid $1, *$3,000 Pre-loss earned income minus $1,000 per month workers compensation beneﬁt being paid = $2,000 Monthly Loss of Earned Income. Earned Income is gross income from employment less business expenses before personal deductions. Deﬁnition of Total Disability Monthly Loss of Earned Income is Pre-Loss Earned Income less the amount actually received while totally disabled from: - Own occupation to age 65 AAA & AA - Own occupation for 5 years A&B - Own occupation for 2 years Wages, salaries, bonuses, commissions, fees or other payments for personal services; and Social Security, workers compensation, or other federal or state cash sickness plans; and Then any occupation for which you are qualiﬁed or may become qualiﬁed by reason of education, training or experience; and with due regard to Any lump sum payments that are greater than Preyour vocation and economic status at the time total disability begins. Loss Earned Income. These will be considered income during future months at a rate not exceeding Pre-Loss Earned Income until exhausted. Pre-Loss Earned Income is monthly Earned Income averaged for the 12 months just prior to becoming totally disabled (5-04)