ContinuON Income SolutionsSM

Transcription

1 Disability Income Insurance ContinuON Income SolutionsSM Marketing Guide ecause life doesn t stop SM at disability

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3 Headline Introduction... 4 Products & Features Individual Non Cancellable, Classes: 5M,,, 5, 4, 3,... 5 Individual Non-Cancellable Maximum enefit Variations... 8 Individual Guaranteed Renewable, Classes:,... 9 Optional Riders usiness Overhead Expense (OE), Classes: 5M,,, 5, 4, 3,,, usiness uy-sell, Classes: 5M,,, 5, 4, 3,,, Issue & Participation Limits Income Qualification Guide Special Limits Underwriting Medical Underwriting Financial Underwriting uy-sell Underwriting Submitting DI pplications Employment General Information Discounts usinessowner Matrix Risk Classifications Guidelines Occupation Listing Miscellaneous Please refer to ON-Net ( for illustration software, state specific application forms and more. 3

4 ContinuON Income Solutions SM Ohio National s ContinuON Income Solutions SM offer a broad and diverse portfolio to cover the income protection needs of both individuals and small business owners. Flexible policy design, outstanding features and affordability make this one of the most comprehensive DI portfolios available today. s you use this Marketing Guide, you will see that Ohio National provides you with all the essentials for a solid and competitive portfolio. Here s an overview of what ContinuON Income Solutions SM offer: balanced, diverse portfolio. Ohio National has solutions for broad groups of markets individual employee, corporate executive, small business owner, professional, government worker and others. Flexibility. Ohio National s innovative, unbundled products give you maximum responsiveness in designing solutions for the particular needs and objectives of each client. They allow you to present competitive proposals across a wide range of cases. Top-of-the-market policy definitions. While disability income insurance is relatively simple in concept, it all comes down to policy language, which is complex. Our policy definitions offer distinct and identifiable advantages to your clients. Highly competitive features. With disability income insurance, features are as important as premiums. s is true of our policy definitions, our features likewise set Ohio National disability income insurance products apart. They give clients compelling, additional reasons to safeguard their income with Ohio National. Competitive pricing. Our focus on overall quality and commitment to low internal expenses translate into an extraordinarily price-competitive portfolio. Sound management and financial integrity. The foundation on which all these qualities rest is Ohio National s reputation and record for prudent management and financial strength and stability. The ability to earn an income is a valuable asset that can, and should, be well protected. We hope you ll find that Ohio National s ContinuON Income Solutions SM will play an important part in your clients overall financial plans. 4

5 Products & Features Non-Cancellable Products & Features Individual Non Cancellable DI vailable Classes: 5M,,, 5, 4, 3, This policy is designed to provide disability benefits to individuals working in professional, executive, white-collar and grey-collar technical occupations. Non Cancellable and Guaranteed Renewable to Expiration Date Classes: 5M,,, 5, 4, 3, We cannot cancel the policy as long as premiums are paid. We guarantee the premiums as stated in the policy, which can be renewed until the Expiration Date of the benefit period selected. We cannot add restrictions during that time. The policy may be renewed for the insured s lifetime so long as the policy was in force for the prior policy year, the insured is not receiving benefits, and the insured is regularly employed at least 30 hours a week and receiving wages. The premium rates after the Expiration Date will be based on our rates then in use for such ages. Premium Options: Level Premium, 5 Year Step-Rate Issue ages Level Premium Step-Rate premium (nearest age) (nearest age) Elimination periods 60, 90, 180, 365 enefit periods Two and five years (not available with Step-Rate option); to age 65, to age 67, to age 70 Minimum benefit $500 per month, including Social Insurance Supplement Rider Maximum benefit 5M,, 5, 4, 3 $15,000 per month, $10,000 per month includes Social Insurance Supplement Rider FL $10,000 for all classes Optional riders Residual Disability Income, automatic for 5M and ; optional for all other classes Social Insurance Supplement Cost of Living Increase Guarantee of Physical Insurability Catastrophic Disability enefit 5

6 Products & Features Non-Cancellable 5M, Total Disability or Totally Disabled (Pure Own Occupation) The insured has a total disability or is totally disabled if, due to a sickness or injury, in and of itself, the insured is not able to perform the material and substantial duties of his or her regular occupation. The insured is not totally disabled if he or she can: 1. perform any of the material and substantial duties of his or her regular occupation; and 2. be employed in, or can engage in, his or her regular occupation on a full-time or part-time basis. Your Regular Occupation The occupation (or occupations if more than one) in which the insured is regularly engaged at the time disability began. If his or her regular occupation at the time disability began is limited to a board-certified specialty within the scope of his or her degree or license, we will deem that specialty to be his or her regular occupation. If the insured is not working at the time disability began, regular occupation means any occupation he or she is able to do based on his or her education, training and experience. 5, 4,, 3,, Total Disability or Totally Disabled (Modified Own Occupation) The insured has a total disability or is totally disabled if, due to a sickness or injury, in and of itself, he or she is not able to perform the material and substantial duties of his or her regular occupation and is not working in any other occupation for wage or profit. The insured is not totally disabled if he or she can: 1. perform any of the material and substantial duties in his or her regular occupation; and 2. be employed in, or can engage in, his or her regular occupation on a full-time or part-time basis; or 3. work in any other occupation for wage or profit. Regular Care of a Physician In order to be eligible for monthly benefits or for us to waive premiums under this policy, the insured must be under the regular care and treatment of a physician that under prevailing medical standards, is appropriate for the condition causing the disability. The physician must be qualified by training or experience to treat the condition causing disability. If, in the opinion of that physician, and based on our medical review, continued medical treatment will not improve the insured s condition, we may waive this requirement. However, waiving this physician care requirement does not change or affect our rights under the proof of loss and authorizations, examinations and interviews provisions found in the policy. Waiver of Premium If the insured is disabled for at least 90 days or the elimination period, if shorter, we will waive payment of premiums that become due while he or she is disabled. Cosmetic or Transplant Surgery We will pay benefits if the insured is totally disabled due to cosmetic or transplant surgery. The transplant must occur more than six months after the issue date of the policy, and if so, the elimination period will be waived. Voluntary Suspension During Unemployment y written request to us, the insured may suspend the policy if he or she becomes unemployed and is receiving state or federal unemployment benefits. We will refund premiums paid for coverage beyond the date we get the insured s request to suspend the policy. While the policy is suspended, no premiums are due, and the insured has no coverage. The suspension will end the earlier of: 1. one year after the date the suspension began; or 2. the date we receive the insured s request to end the suspension. Your Regular Occupation The occupation (or occupations if more than one) in which the insured is regularly engaged at the time total disability began. If he or she is not working at the time total disability began, his or her regular occupation means any occupation he or she is able to do based on his or her education, training and experience. 6

7 Products & Features Non-Cancellable Recurrent Disability If total disability and/or residual disability (if the residual disability is either included or part of the policy or the Rider is attached) stops and then starts again within 365 days from the same or a related cause, the two periods of disability will count as one. The insured will not have to satisfy the elimination period again. Rehabilitation Ohio National may help pay for a rehabilitation program if we are paying benefits under the policy and approve the program. Elimination Period The elimination period is the period of time that the insured must be totally disabled or residually disabled before benefits begin. For a disability that results from normal pregnancy or childbirth, the elimination period must be satisfied by a disability for the longer of the number of days shown on: page 3 of the policy; or 90 days. Presumed Total Disability Total disability is presumed if, while the policy is inforce, the insured sustains the total loss of the use of both hands, or the use of both feet, or the use of one hand and one foot, or completely loses sight in both eyes or the hearing in both ears or speech. When total disability is presumed: 1. the elimination period will be waived; 2. base monthly benefits will be paid even if the insured still works; 3. base monthly benefits will not be made for more than the maximum benefit period shown on page 3 of the policy; and 4. the insured must meet the regular care of a physician requirement stated in the policy. Mental Disorders and Substance buse Limitation 5M,, benefits will not be paid for more than a cumulative total of 24 months (60 months: 5, 4, 3, ) during the life of the policy if the insured is disabled due to any mental disorder or substance abuse. This limitation does not include lzheimer s disease or if hospital confined. Exclusions No monthly benefits will be paid for a disability: 1. due to war or an act of war, declared or undeclared, or is related to military service when scheduled active duty is more than 30 consecutive days; or 2. while the insured is legally incarcerated or detained; or 3. due to a loss we have excluded by name or specific description in an exclusion Rider attached to the policy; or 4. due to the insured committing, or attempting to commit, a felony; or 5. in the event that the insured s material and substantial duties normally require that he or she be licensed with a federal, state, or industry regulatory body, during any period his or her license has been suspended or revoked, due to actual or alleged misconduct or malpractice; or 6. due to a loss caused by or contributed to, or which results from the insured being engaged in, an illegal occupation; or 7. caused by an intentionally self-inflicted injury. We will not pay monthly benefits for more than 12 months throughout the life of the policy for periods for which the insured is asserting a claim and residing outside of one of the 50 states, the District of Columbia or Puerto Rico. 7

8 Headline Products & Features Non-Cancellable Non-Cancellable Maximum enefit Period Variations enefit period Maximum benefit period Non-cancellable Conditionally renewable To ge 70 For total disability starting: efore age 68 To age 70 ge Years ge Year To ge 67 For total disability starting: efore age 65 To age 67 ge Years ge Year To ge 65 For total disability starting: efore age 63 To age 65 ge Years ge Year 5-Year For total disability starting: efore age 60 5 Years ge 60 but before age 63 To age 65 To age 70 To age 67 To age 65 To age 65 For lifetime, subject to premium changes, must work at least 30 hours a week and receive an income For lifetime, subject to premium changes, must work at least 30 hours a week and receive an income For lifetime, subject to premium changes, must work at least 30 hours a week and receive an income For lifetime, subject to premium changes, must work at least 30 hours a week and receive an income ge Years ge Year 2-Year For total disability starting: efore age 75 2 Years To age 65 For lifetime, subject to premium changes, must work at least 30 hours a week and receive an income ge Year 8

9 Products & Features Guaranteed Renewable Individual Guaranteed Renewable DI vailable Classes:, This policy is designed to provide disability income payments to individuals working in occupations such as skilled technician, on site supervisor, manual laborer and certain unskilled trades. Guaranteed Renewable to age 65 or Earlier Retirement, Premiums Subject to Change by Class We cannot cancel the policy as long as premiums are paid. The policy can be renewed each year before the earlier of age 65 or the date the insured elects to receive Social Security or other retirement benefits. We can change the rates. Such a change will be based on the insured s age, risk class and sex as of the policy date. The insured may renew this policy up to and at age 75, so long as the policy was in force for the prior policy year, he or she is regularly employed at least 30 hours a week, and he or she is not receiving Social Security or other retirement benefits. vailability Issue ages Waiting periods enefit periods Minimum benefit Maximum benefit Optional riders (nearest age) 30, 60, 90, 180 and 365 days One, two and five years $500 per month, including Social Insurance Supplement Rider $5,000 per month, including Social Insurance Supplement Rider $4,000 per month, including Social Insurance Supplement Rider Social Insurance Supplement (not available with one-year benefit period) Waiver of Waiting Period While Hospital Confined Guarantees are based upon the claims-paying ability of the issuer. Total Disability The insured is totally disabled or has a total disability if, due to injury or sickness, the insured is: unable to work at any job for which he or she is suited by education, training or experience; and under regular physician s care. Presumed Total Disability Total disability is presumed if injury or sickness causes the insured to lose the use of two or more hands or feet, or the loss of sight, hearing or speech. The loss must be complete and one from which the insured is not expected to recover. When total disability is presumed, the waiting period is waived and the benefit is paid even if the insured still works. Partial Disability The insured is partially disabled if he or she: can do some but not all of the duties of any job; or can do all of the duties of any job, but for less time than normally required for those tasks. If the insured returns to work immediately after receiving income for total disability under the policy and due to injury or sickness he or she remains partially disabled, we will pay benefits. The amount will be determined by deducting 50 percent of gross pay from the policy income benefit amount (see example below). We will require proof of gross pay. Example: Policy income amount $ 1,000 Gross pay $ 750 x.5 = $ 375 Partial disability benefit $ 625 Partial disability benefits will not be paid: at or after age 65 or earlier retire ment date; beyond the maximum benefit period; or when gross pay exceeds 125 percent of the policy income benefit amount. 9

10 Products & Features Guaranteed Renewable Waiver of Premium If the insured is totally or partially disabled for at least 90 days or the waiting period, if shorter, we will waive payment of premiums that become due while he or she is receiving total or partial income. Cosmetic or Transplant Surgery We will pay benefits if the insured is totally disabled due to cosmetic or transplant surgery. Rehabilitation Ohio National may help pay the costs of a rehabilitation program if we are paying total income under the policy and approve the program. Exclusions No benefit is paid if total disability is due to war or an act of war, declared or undeclared, or is related to military service when scheduled active duty is more than 30 consecutive days. No benefit is paid for any period the insured is incarcerated. 10

11 Products & Features Optional Riders Optional Riders ll riders may not be available in all states or for all occupational classes. See ON-Net to confirm availability. ll riders are available through age 60 except as noted. Residual Disability Rider Classes: 5, 4,, 3, (Included in ase Policy for 5M, ) The residual disability benefit amount is the monthly benefit amount for total disability multiplied by the ratio of the insured s loss of earnings during disability to his or her monthly earnings before disability. If such ratio of loss is more than 75 percent, then the residual disability benefit amount will be the same as the total disability benefit amount. For the first six months that the insured receives residual disability benefits, the amount will be at least 50 percent of the total disability benefit amount. Residual disability benefits will not be paid for more than the maximum benefit period stated in the policy. Residual Disability or Residually Disabled The insured is residually disabled if he or she, due to sickness or injury: 1. is not totally disabled; and 2. is working in any occupation*; and 3. has a loss of monthly earnings that is at least 20 percent of his or her monthly earnings before disability; and 4. has loss of monthly earnings solely the result, directly and apart from any other cause, of an injury or sickness; and 5. is able to perform one or more, but not all, of the material and substantial duties of any occupation* or is able to work in any occupation no more than 80 percent of the time he or she formerly spent before his or her current disability started; and 6. meets the regular care of a physician provision. *For 5M and, residual is included in the base policy and uses the pure own occ definition (see page 6). Monthly Earnings efore Disability Monthly earnings before disability means the greater of: 1. the insured s average earnings per month for the 12 months immediately before disability begins; or 2. the insured s average earnings per month for the 24 months immediately before disability begins. If money was being paid into a pension or profit-sharing plan, that amount will be added to the insured s monthly earnings before disability. Monthly Earnings Includes 1. all wages, salary, bonuses, commissions and fees; 2. any pension and profit-sharing contributions and deferred compensation; and 3. other amounts earned by the insured for services performed by him or her that are reported as earned income for personal income tax purposes, excluding extraordinary income. In addition, if the insured owns any part of a business in which he or she provides personal services, monthly earnings will also include his or her share of profits produced by or from the business. In calculating such profits, he or she may only include normal and usual business expenses. The following amounts are not included in monthly earnings: 1. any unearned income, such as interest, dividends, rent, royalties, or investment income or other income not derived from the insured s vocational activities; and 2. any income from annuities, sick pay or benefits received for disability under a formal wage or salary continuation plan. Monthly earnings will be determined using either the cash or accrual accounting method, whichever the insured chooses. ut, during the period of disability, the same method must be used to determine monthly earnings before disability and current monthly earnings. If the insured chooses the cash method, we will exclude any income received for services rendered prior to the start of his or her disability. 11

12 Products & Features Optional Riders Transition Return to Work enefit We will continue benefits after the insured s disability has ended and his or her current monthly income is less than 80 percent of monthly earnings before disability if he or she is at work full-time, and loss of income is due solely to the same injury or sickness that caused the disability for which he or she received benefits. Duration of benefit for classes 5M,,, 5, 4 the length of the ase enefit period. Duration of benefit for classes 3, 24 months. Inflation Indexing t the end of each year the insured remains disabled, his or her monthly earnings before disability will be increased equal to the CPI U. This new amount will be used in calculating the residual disability benefit. If the CPI U does not increase, neither will the monthly earnings before disability. Social Insurance Supplement (SIS) Rider ll Classes We will pay extra benefits while the insured is disabled. The amount of extra benefit for disability will be the extra benefit amount shown in the base policy, less any social benefit received in a month. Social income includes income provided by: the federal Social Security ct; Workers compensation, occupational disease, employer s liability, State Cash Sickness, or like law; the Railroad Retirement ct; Civil Service Retirement Program; and any like program covering federal, state or local government employees enefits may vary by state. New Jersey, Rhode Island and Puerto Rico require at least an 180 day elimination period on any SIS benefits. Cost of Living (COL) Rider Classes: 5M,,, 5, 4, 3, If the insured is totally disabled for more than 12 months, we will increase the benefit paid under the policy each year by three percent compounded. The increase also applies to the residual disability benefit when included in the base policy and to the Residual Disability Rider and/or Social Insurance Supplement Rider if attached to the base policy. Option to uy enefit Increase fter a disability during which benefits were increased by the Cost of Living Rider, the insured may increase the benefit on the base policy by an amount equal to the increase provided by this Rider, rounded to the nearest $100. To exercise this option, the insured must: be actively and gainfully employed on a full time basis; apply within 90 days after disability ends; and apply before age 60. Premiums for the benefit increase will be based on the insured s age as of the date he or she elects to increase the benefit. Catastrophic Disability enefit (CT) Rider Classes: 5M,,, 5, 4, 3, The Catastrophic Disability enefit Rider will provide the insured with additional monthly benefits while he or she is catastrophically disabled. Catastrophic disability and catastrophically disabled means that, due to an injury or sickness: a. the insured is unable to perform two or more ctivities of Daily Living (DL) without stand-by assistance due to loss of functional capacity; (bathing, continence, dressing, eating, toileting, transferring); or b. the insured requires substantial supervisions due to severe cognitive impairments. t the time of issue, the CT Rider is limited to the following: up to three times the base monthly benefit; maximum issue amount of $10,000; and total coverage cannot exceed 100 percent of the insured s monthly earned income Exclude the amount of the CT Rider when applying Ohio National issue and participation limits. lso exclude the amount of the CT Rider when applying medical and inspection limits. Increases to base coverage, including increases under the Guarantee of Physical Insurability Rider, cannot result in total coverage, including CT Rider coverage, exceeding 100 percent of the insured s monthly earned income. 12

13 Products & Features Optional Riders Guarantee of Physical Insurability (GPI) Rider Classes: 5M,,, 5, 4, 3, (Issued through age 50) The insured may exercise an increase amount on the first day of any policy year up to age 60 if he or she is not disabled. The increase amount may not cause the total benefit to exceed the amount of income for which the insured currently qualifies based on our then current issue and participation limits. The minimum increase is $100 per month. The maximum increase is one-half the base monthly benefit. The sum of all such increase amounts may not exceed the amount shown on page 3 of the base policy. The maximum amount of potential increase amounts that can be purchased at issue of the rider is three times the base monthly benefit. To exercise an option to increase coverage under this rider, the insured will not have to prove that he or she can be insured medically. This rider is not available on rated cases. Increases are to the base monthly benefit for the base policy only. If the CT Rider is attached to the base policy, increases under this rider cannot result in total coverage, including CT Rider coverage, exceeding 100 percent of the insured s monthly earned income. Special Increase mount The insured may not have a special increase amount that will give him or her more than our maximum disability income issue and participation limit in effect as of the date he or she applies for the special increase amount. The insured may request a special increase amount if either of the following applies. 1. The insured is no longer eligible to participate in his or her employer s group long term disability insurance plan because of a change in employment or the insured s employer discontinues or reduces group long term disability insurance and the insured is working and not eligible for group long term disability insurance in the next 24 months. The insured must apply for the special increase amount within 90 days of losing group long term disability insurance. or 2. The insured has at least a 50 percent increase in earnings since his or her last increase date. The increase in earnings must be permanent and sustainable. If the increase in earnings is the result of a one-time bonus, commission or extraordinary financial event, the insured will not qualify for a special increase amount. Optional Increase When Disabled On the first increase date after the first time the insured becomes disabled, he or she can buy one increase amount for the lesser of: $1,000; or the amount he or she qualifies for, if any, based on average annual income for the 12 months immedi ately prior to the time disabil ity began. n increased amount will not cover a disability that starts before the increase date on which it takes effect. Waiver of Waiting Period While Hospital Confined Rider Classes:, If the insured is hospital-confined during total disability, we will pay income during the waiting period for the number of days he or she is hospital-confined. This rider is not available on rated cases. 13

14 Products & Features usiness Overhead Expense (OE) usiness Overhead Expense (OE) Classes: 5M,,, 5, 4, 3,,, usiness Overhead Expense (OE) coverage is designed to reimburse small business owners (e.g., sole proprietors, partners, closely held corporations) not operated from the home for normal and customary expenses necessary to maintain the business as a going concern after a disability. Ohio National OE coverage is also designed for individuals who provide a personal service, such as doctors, dentists and CPs and whose business would be profoundly affected if the insured was unable to perform his or her duties. Employers who have staff who could do some or all of the insured s duties, including those who operate retail businesses, and/or other revenue-generating work are generally not eligible for OE coverage. In addition, those individuals who operate a business from their residence, including doctors and CPs, would typically not qualify for OE coverage other than under the most unusual circumstances. The owner(s) must devote full time service to the business, occupation or profession and be personally liable for expenses. If the business is incorporated, benefits from the policy must be assigned. If ownership is shared with others, only the insured s pro rata share of expenses will be covered. The owner must produce substantial income for the business such that his or her disability would cause great disruption or even failure of the business. Coverage will not be available if the prospect is overinsured for individual disability insurance coverage. enefits over $5,000 per month require documentation of actual expenses from actual business tax returns. If there is other OE coverage in force with another company, a usiness Expense Excess Coverage Endorsement will be necessary. Employees salaries for those employees not doing the same duties as the owner will be considered as a covered expense. Those doing the same duties as the owner will not be considered. Non Cancellable and Guaranteed Renewable to age 65 Classes: 5M,,, 5, 4, 3, We cannot cancel this policy as long as scheduled premiums are paid. The policyowner can renew it each year before age 65. We cannot raise the rates or add restrictions during that time. The policyowner may renew this policy one year at a time from age 65 up through age 75 so long as: the policy was in force the year be fore; and the insured is regularly employed at least 30 hours a week in the business. Guaranteed Renewable to age 65 Classes:, Premiums are subject to change by class. We cannot cancel this policy as long as premiums are paid. The policyowner can renew each year before age 65. We can change rates from time to time. Such a change will be based on the insured s age, risk class and gender as of the policy date. We will send notice of a change at least one month in advance, mailed to the last address on our records. The policyowner may renew this policy one year at a time from age 65 up through age 75 so long as: the policy was in force the year before; and the insured is regularly employed at least 30 hours a week in the business. vailability Size Issue ages Occupation classes Waiting periods usinesses with fewer than six owners/ principals and fewer than 20 employees (nearest age) 5M,,, 5, 4, 3,,, 30, 60 and 90 days enefit periods 12, 18 and 24 months Maximum benefit 5M,,, 5, 4, 3 $30,000 per month $10,000 per month $4,000 per month $3,500 per month Minimum benefit $1,000 per month Optional riders Residual Disability (5M,,, 5, 4, 3, only) Partial Disability Substitute Salary Expense Six Month enefit Guarantee of Physical Insurability (5M,,, 5, 4, 3, only) Guarantees are based upon the claims-paying ability of the issuer. 14

15 Products & Features usiness Overhead Expense (OE) Maximum Monthly enefit Permits Carry Over of Excess Expenses The largest amount we will pay in a month is computed by multiplying the number of months for which benefits have been paid, plus one, times the maximum first-month total disability income, minus income paid. Definition of Total Disability The insured is considered totally disabled if: he or she cannot do the substantial and material duties of his or her business due to injury or sickness; and he or she is under a regular physician s care. For classes 5M,,, 5, 4, 3 and, the insured does not need to be under a physician s care on a regular basis to be considered totally disabled if he or she can show that further recovery is not expected. Nonmonthly Expenses If a covered business expense comes due while the insured is totally disabled and that relates to a period of more than one month, this covered business expense either: will be prorated throughout the time to which it applies; or will be fully paid that month, if the insured chooses this method before we pay a prorated portion of this covered business expense. However, we will not pay more than the maximum monthly benefit. The maximum benefit period for the new policy will be two years and the waiting period for the new policy cannot be less than the waiting period in the policy being converted. Waiver of Premium If the insured is totally disabled for at least 90 days or the waiting period, if shorter, we will waive payment of premiums that become due while totally disabled. Cosmetic or Transplant Surgery We will pay benefits if the insured is totally disabled due to cosmetic or transplant surgery. Presumed Total Disability Total disability is presumed if injury or sickness causes the insured to lose the use of two or more hands or feet, or to lose his or her sight, hearing or speech. The loss must be complete and one from that the insured is not expected to recover. When total disability is presumed: the waiting period is waived; and income is paid even if the insured still works. Exclusions No income is paid if total disability is due to war or an act of war, declared or undeclared, or is related to military service when scheduled active duty is more than 30 consecutive days. No income is paid for any period the insured is incarcerated. Conversion Privilege t any time prior to age 60, the policyowner may exchange this policy for an individual disability income insurance policy if: the policy is in force at that time; we receive a written request; and the insured is not disabled when the request is made. The maximum monthly benefit for such a disability income insurance policy will be the maximum first month total disability income for this policy. The amount of monthly benefit in the new policy, when added to all other such coverage with any company, cannot be more than our published issue and participation limits at that time. 15

16 Products & Features usiness Overhead Expense (OE) Optional Riders for usiness Overhead Expense ll optional Riders may not be available in all states or for all occupational classes. See ON-Net to confirm availability. ll riders are available through age 60 except as noted below. Guarantee of Physical Insurability Rider Classes: 5M,,, 5, 4, 3, (Issued through age 58) The insured may buy an additional amount of maximum first month total disability income on the first day of every second policy year. The insured will not have to prove he or she can be insured. Each additional amount must be: at least $200; but not more than 20 percent of the original maximum first month total disability income. The waiting period must be the same as in the policy. This benefit stops when: the insured reaches policy age 60; or when he or she has increased the origi nal maximum first month total disability income by 100 percent. Residual Disability Rider Classes: 5M,,, 5, 4, 3, When added to a policy, the Residual Disability Rider will provide income paid on an income replacement basis if the insured continues to work in his or her business or profession, as long as he or she: satisfies the waiting period (except for pregnancy, total disability is not required for residual benefits to be paid); can do some, but not all, of the substantial and material duties of the business or profession, or can do all such duties, but for less than the time normally required to do such duties; suffers a loss of gross monthly earnings before disability; and is under a regular physician s care unless further recovery is not expected. The income amount will be the lesser of: the maximum first month benefit times the ratio of the loss of gross monthly earnings during disability to the gross monthly earnings before disability, or the covered business expenses less the gross monthly earnings. However, for the first six months of covered loss, the income amount will not be less than 50 percent of the maximum first month benefit. fter a period for which we have paid income, the insured can return to work full-time, be released from a physician s care, and still be eligible for benefits up to six months based solely on a loss of gross monthly earnings of 20 percent or more. No loss of time or duties is required during this period. While disabled, any money received for work performed prior to the start of disability will not affect the benefit. Only the money actually received for work performed during a disability will affect the benefit. Gross monthly earnings before disability are measured as the average gross monthly earnings for the 12 months before the disability begins. Contributions to a pension, profit sharing, 401(k) or other qualified retirement plan are included in gross monthly earnings before disability. If loss of gross monthly earnings is 75 percent or more of the gross monthly earnings before disability, the original income benefit is payable. The minimum monthly income benefit payable for the first six months of residual disability is 50 percent of the original income benefit. 16

17 Products & Features usiness Overhead Expense (OE) Products & Features usiness uy-sell Partial Disability Rider ll Classes When added to the policy, the Partial Disability Rider will provide 50 percent of the original income benefit for up to six months, as long as the insured: satisfes the waiting period (except for pregnancy, total disability is not required for partial benefits to be paid); can do some, but not all, of the substantial and material duties of his or her business or profession, or can do all such duties, but for less than the time normally required to do such duties; and is under a regular physician s care, unless further recovery is not expected. The insured does not need to provide proof of covered business expenses, nor loss of gross monthly earnings, to collect this benefit. Six Month enefit Rider ll Classes n additional monthly overhead expense rider with a six month benefit is available up to an amount equal to one half the amount of base coverage. Substitute Salary Expense Rider ll Classes The Substitute Salary Expense Rider will provide a reimbursement for a salary expense incurred for a person hired to perform the substantial and material duties of the insured s business or profession and when a loss of gross monthly earnings is shown. The rider benefit is payable for a maximum of six months and for the lesser of 100 percent of the original income benefit or the actual loss of gross monthly earnings. In any month we pay less than 100 percent of the original income benefit, the difference will be carried forward beyond the six-month period until we have paid a total of six times the original income benefit. usiness uy-sell Classes: 5M,,, 5, 4, 3,,, Disability uy-sell coverage is designed to provide the funds to purchase an insured s ownership interest in a business in the event of long-term disability. Many firms have protection in the event of the death of an owner, but overlook the financial devastation that can occur as a result of disability. Flexible funding methods are available using lump-sum and/ or monthly installment payments, which help to provide the funds to effect an orderly transfer of ownership. Renewability The policy is renewable to the earliest of: age 65; the date the insured terminates full-time work with the business entity for any reason other than total disability; the date the buy-sell agreement is ended; the date the buy-sell benefit is paid; or the date one person owns more than 90 percent of the business entity. The buy-sell agreement must be in effect within one year from the policy date and before total disability begins. If not, the policy will be treated as having never been issued and all premiums paid will be refunded. enefits The amount of benefit paid will be the lowest of : the maximum aggregate benefit (combination of lumpsum and monthly installment benefit, if any); or the value of the insured s interest as of the date total disability begins; or 100 percent of the maximum aggregate benefit if total disability begins before age 60, 80 percent if total disability begins before age 61, 65 percent if total disability begins before age 62, 50 percent if total disability begins before age 63, 25 percent if total disability begins before age 64, or 10 percent if total disability begins before age

18 Products & Features usiness uy-sell Definition of Total Disability The insured is considered totally disabled if : he or she cannot do the substantial and material duties of his or her occupation due to injury or sickness; he or she is under a regular physician s care; and he or she is not doing any work for the business entity. vailability Size Issue ages Occupation classes Waiting periods enefit periods Maximum benefit usinesses with at least two but no more than 10 working owners (nearest age) (renewable to age 65; benefits reduce after age 60) 5M,,, 5, 4, 3,,, 12, 18 and 24 months Two, three or five years or lump-sum 5M,, 5, 4 $1,000,000;, 3 $500,000*;, & $400,000** (See page 28) Minimum benefit $50,000 lump-sum; $1,000 installment, subject to aggregate Riders Guarantee of Physical Insurability (5M,,, 5, 4, 3, only) Extended enefit *$1,000,000 if the majority of other applicants in the case are class 5M,, 5, 4 **For Class a) $1,000,000 if the majority of other applicants in the case are class 5M,, 5, 4 b) $500,000 if the majority of other applicants in the case are class, 3 Guarantees are based upon the claims-paying ability of the issuer. Conversion Privilege fter the uy-sell DI policy has been in force for two years, it may be exchanged for an individual disability income insurance policy, provided that all of the following conditions are met: the policy is terminated, either because the insured owns more than 90 percent of the business entity or the insured stops active full time work in the business entity; and the insured is under age 55; and the insured is not totally disabled and has not received buy-sell benefits under the policy. The new policy will: be owned by the insured; have a maximum total disability monthly benefit of $1,000, but not exceed our published issue and participation limits; have a maximum benefit period of two years and an elimination period of at least 90 days; and have the same rate class and exclusions as in the uy-sell policy. The premiums will be for the insured s attained age on the date of the conversion at our rates for the policy series in effect on the date of conversion. Evidence of the insured s good health will not be required. Legal and ccounting Fees enefit We will pay up to $2,000 for legal and/or accounting fees incurred in implementing the provisions of the existing buysell agreement upon submission of an approved claim. 18

19 Products & Features usiness uy-sell Transfer of Coverage fter the policy has been in force for two years, coverage on the same insured can be transferred to a new owner if all the following conditions are met: the new owner is not the insured; the insured is under age 59; the insured is not totally disabled and has not received buy-sell benefits under the policy; the insured ends active full time work with the business entity; the insured has begun active full-time work with another business entity in which he or she owns at least 10 percent, but not more than 90 percent of the new business entity; a buy-sell agreement is in effect on the new business entity within one year of the transfer; all underwriting conditions that apply to buy-sell coverage are met; and the transfer occurs within 90 days of termination of active full time work with the original business entity. Optional Riders for usiness uy-sell ll riders may not be available in all states or for all occupational classes. See ON-Net to confirm availability. ll riders are available through age 60 except as noted. Guarantee of Physical Insurability Rider* Classes: 5M,,, 5, 4, 3, (Issued through age 53) Each second anniversary prior to age 55, the insured may purchase up to 20 percent of the original maximum aggregate benefit. The maximum total increase amount that may be purchased is an amount equal to the original maximum aggregate benefit. *GPI not available in Puerto Rico. Extended enefit Rider ll Classes (Issued through age 59) If the Extended enefit Rider is purchased, the total benefit amount will continue for disabilities occurring after age 60. The new policy benefit will be based on the insured s share of the value of the new business entity, but not to exceed the maximum aggregate benefit of the original policy. Evidence of the insured s good health will not be required. Exclusions No buy-sell benefit is paid if total disability is due to war or act or accident of war, declared or undeclared. No income is paid for any period the insured is incarcerated. 19

20 Issue & Participation Limits Income Qualification Guide Issue & Participation Limits Income Qualification Guide Maximum Issue and Participation Limits ll Classes, Total Indemnity, ll Companies Including Social Insurance enefit nnual earned income asic DI coverage Employee pays premium SIS DI coverage Total DI coverage Total DI with IDI/LTD* asic DI coverage Employer pays premium SIS DI coverage Total DI coverage Total DI with IDI/LTD* $ 20,000 $ 550 $ 750 $1,300 $1,350 $ 590 $ 750 $ 1,340 $ 1,400 30,000 1, ,900 1,950 1, ,100 2,150 40,000 1, ,400 2,450 1, ,750 2,800 50,000 2, ,900 3,000 2, ,450 3,550 60,000 2,350 1,000 3,350 3,500 3,050 1,000 4,050 4,150 70,000 2,800 1,000 3,800 4,050 3,650 1,000 4,650 4,800 80,000 3,200 1,000 4,200 4,550 4,200 1,000 5,200 5,500 90,000 3,600 1,000 4,600 5,000 4,700 1,000 5,700 6, ,000 3,950 1,050 5,000 5,500 5,200 1,050 6,250 6, ,000 4,200 1,100 5,300 6,100 5,650 1,100 6,750 7, ,000 4,500 1,150 5,650 6,500 6,100 1,150 7,250 8, ,000 4,800 1,200 6,000 7,100 6,400 1,200 7,600 8, ,000 5,250 1,200 6,450 7,500 6,900 1,200 8,100 9, ,000 5,650 1,250 6,900 8,000 7,350 1,250 8,600 10, ,000 6,100 1,250 7,350 8,500 7,900 1,250 9,150 10, ,000 6,500 1,300 7,800 9,000 8,350 1,300 9,650 11, ,000 6,900 1,350 8,250 9,600 9,000 1,350 10,350 12, ,000 7,300 1,400 8,700 10,100 9,600 1,400 11,000 12, ,000 7,650 1,450 9,100 10,500 9,900 1,450 11,350 13, ,000 8,500 1,500 10,000 11,500 11,100 1,500 12,600 14, ,000 9,450 1,550 11,000 12,300 12,150 1,550 13,700 15, ,000 10,150 1,600 11,750 13,300 13,000 1,600 14,600 16, ,000 10,600 1,650 12,250 14,200 13,000 1,650 14,650 17, ,000 11,050 1,700 12,750 15,400 13,000 1,700 14,700 18, ,000 11,500 1,850 13,350 16,300 13,000 1,850 14,850 20, ,000 12,000 2,000 14,000 17,300 13,000 2,000 15,000 21, ,000 12,750 2,000 14,750 18,200 13,000 2,000 15,000 22, ,000 13,000 2,000 15,000 19,100 13,000 2,000 15,000 23, ,000 13,000 2,000 15,000 20,100 13,000 2,000 15,000 25, ,000 13,000 2,000 15,000 21,000 13,000 2,000 15,000 25, ,000 13,000 2,000 15,000 22,100 13,000 2,000 15,000 25, ,000 13,000 2,000 15,000 23,000 13,000 2,000 15,000 25, ,000 13,000 2,000 15,000 24,000 13,000 2,000 15,000 25, ,000 13,000 2,000 15,000 25,000 13,000 2,000 15,000 25, ,000 13,000 2,000 15,000 25,000 13,000 2,000 15,000 25, ,000 13,000 2,000 15,000 25,000 13,000 2,000 15,000 25, ,000 13,000 2,000 15,000 25,000 13,000 2,000 15,000 25, ,000 13,000 2,000 15,000 25,000 13,000 2,000 15,000 25, ,000 13,000 2,000 15,000 25,000 13,000 2,000 15,000 25,000 Issue limit for chiropractors (all states) is $5,000; participation limit is $6,500. *Issue limit in FL and occupations is $10,000; participation limit is $15,000 Principals of a Sole Proprietorship, Partnership, LLC or Sub-chapter S Corporation do not qualify for Employer Pays Premium issue and participation limits. These limits should only be used when the employer is paying the premium and none of the premium is included in the employee s taxable income in that year. 20

21 Issue & Participation Limits Income Qualification Guide Income Qualification Guide Notes 5M,,, 5, 4, 3 risks only, the total columns can be all asic coverage or a combination of asic and Social Insurance Supplement. If income is less than $20,000, individual consideration will be given on employer-paid cases (maximum limit of 66 2/3 percent of compensation). Generally, for applicants with a net worth exceeding $5,000,000, no coverage is available; however, individual consideration may be given with complete details. If unearned income exceeds 10 percent of earned income or $30,000, whichever is less annually, 50 percent of any excess will be deducted from the maximum issue and participation limits (see example below). Example: Earned income $ 240,000 Unearned income $ 89,000 $240,000 x 10% $ 24,000 $24,000 is less than $30,000 $89,000 $24,000 = $ 65,000 $65,000 / 2 = $ 32,500/12 = $2,708 Issue and participation at $240,000 = $ 11,000 $11,000 $2,708 = $ 8,292 limit The Five Rules Regarding Issue and Participation Limits 1. If the employee pays the group LTD and the individual plan premium, then subtract the group LTD amount from the limit under employee pays premium total DI with IDI/LTD column. (In FL and occupations, use the lesser of: the limit under employee pays premium total DI with IDI/LTD; or $15,000). 2. If the employer pays the group LTD, and the individual plan premium, then subtract the group LTD amount from the limit under employer pays premium total DI with IDI/LTD column. (In FL and occupations, use the lesser of the limit under employer pays premium total DI with IDI/LTD, or $15,000). 3. If the employer pays the group LTD, but the employee pays the individual plan premium, then subtract 80 percent of the group LTD amount from the limit under employee pays premium total DI with IDI/LTD column. (In FL and occupations, use the lesser of the limit under employee pays premium total DI with IDI/ LTD, or $15,000). 4. Professional association plans do not qualify as group LTD plans. 5. We will not issue more than the individual limit for a given income, regardless of the amount of group LTD. 100 percent offset for any military pensions. To be eligible for SIS benefits, the applicant must be paying FIC taxes or similar tax/contribution to their respective social insurance program. Principals of a sole proprietorship, partnership, LLC or Sub-chapter S Corporation do not qualify for employer pays premium limits. The Employee Pays Total DI with IDI/LTD and Employer Pays Total with IDI/LTD limits are designed to permit larger benefit amounts to employees covered under Group LTD plans. To prevent a double offset, only asic benefits will be issued to employees with Group LTD plans. The method of calculating issue and participation limits for employees covered under Group LTD plans depends upon whether these plans are paid by the employee or the employer. 21