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  • Does this disability policy seem reasonable?





    My son, a resident is looking for his first disability policy. Has been a while since I shopped. Does this seem reasonable?

     

    Highlights of your policy

    Disability Income Insurance proposal

    Personalized for: Dr. Male, non-tobacco Occupation class: 3A-M




    State of residence: NY Issue age: 29
    Effective date: 07/24/2017






    We know this information may seem complex so we encourage you to talk with your financial professional about the benefits and details outlined below. We are here to help!

    Your proposed coverage

    Total monthly benefit - $5,000 (that’s $60,000 annually!)

    • If you become disabled today, based on the terms of your disability coverage, you could potentially receive

      a total of $2,145,000 in benefit.

    • If you become totally disabled, benefits become payable one month after your 90 day elimination period.

    • Benefits continue while you remain totally disabled to age 65.

      What “total disability” means

      You must be unable to perform the substantial and material duties of your occupation and you are not working.

      Your policy coverage

      Your policy is non-cancelable and has guaranteed premium rates to age 65. This means Principal® cannot change or cancel your policy, except for nonpayment of premiums, or increase the premiums before you reach age 65, regardless of changes in your income, occupation or health.

      After age 65, you may conditionally renew your policy annually for the rest of your life as long as you are currently working at least 30 hours a week and had been the year before and meet the other requirements. If you renew the policy, your renewal premium will change each year based on your age.

      What’s included in your policy

      Rehabilitation Benefit

      If you are disabled and want to pursue a rehabilitation program to return to work, an extra benefit may be available to help you with the cost. The program will be mutually agreed upon in writing by you and Principal.

      Waiver of Premium Benefit

      You do not have to pay for your coverage after you’re disabled 90 days. We’ll refund the premiums you paid for coverage after the disability began and continue to waive all premiums that become due during your continuous disability.

      Features that provide additional benefit payments

      Death Benefit
      You receive a lump-sum benefit of $15,000 if you die after satisfying the elimination period while receiving disability benefits. This benefit is payable in addition to any other benefit of the policy.

      Capital Sum Benefit rider (HH751)
      You receive a one-time lump-sum benefit of $60,000 to help you adjust financially if you have a total loss of use without any possibility of recovery, of the sight in one eye or the use of a hand or foot. This benefit is payable in addition to any other benefit of the policy you qualify to receive.

      Presented by: Prepared on: July 24, 2017 for state of New York Disability insurance from Principal® is issued by Principal Life Insurance Company, Des Moines, IA 50392 Page 1 of 3









    Highlights of your policy

    Disability Income Insurance proposal

    Personalized for: Dr.Rates: Male, non-tobacco Occupation class: 3A-M




    State of residence: NY Issue age: 29
    Effective date: 07/24/2017






    Presumptive Disability Benefit rider (HH755)
    You receive $5,000 a month if you permanently lose the power of speech, hearing in both ears, sight in both eyes, or use of both hands, both feet, or one hand and one foot. Benefits start to accrue when the presumptive disability occurs and continue to be paid, as long as the loss continues regardless of your ability to work or earn an income. Benefits will be payable to the end of the benefit period for as long as the loss continues. If the benefit period is to age 65 or greater, the benefit is extended to lifetime.

    Features that enhance the definition of disability

    Residual Disability and Recovery Benefit rider (HH784)

    You are considered residually disabled and receive a benefit proportionate to your loss if you:

    • Lose at least 20% of your prior earnings due solely to an injury or sickness and

    • Are able to perform some, but not all, of the substantial and material duties or

    • Are unable to work full time in your occupation or

    • Working in another occupation.
      Once you qualify for residual disability benefits, you are guaranteed a minimum benefit of 50% of your maximum

      monthly benefit for the first 6 months. If your loss of earnings exceeds 75%, then 100% of the maximum benefit is paid.

      In addition, after recovering from a disability in which you were receiving benefits, and you return to work full-time, recovery benefits are payable as long as you continue:

      • To have a recovery loss of earnings equal to or greater than 20% of your recovery prior earnings and

      • The loss is directly and solely due to the injury or sickness that caused your prior disability.
        Recovery benefits end when you no longer have a recovery loss of earnings greater than 20% for two consecutive months and will not be paid beyond the maximum benefit period.

        Regular Occupation rider (HH757)

        If you become totally disabled from your regular occupation and choose to work in another occupation, you receive full benefits, regardless of the income you earn from the other occupation.

        Features that enhance your monthly benefit

        Benefit Update rider (HH767)

        Your coverage can be reviewed every three years to ensure it is consistent with any changes to your income. You can increase your coverage, up to the maximum amount for which you are eligible, every three years based on financial information without providing evidence of medical insurability. You can even request an advanced update, in place of your next scheduled review, if you:





    • Lose your group long-term disability (LTD) coverage because of a change in employment, or your employer discontinues or reduces the group LTD benefit amount.

    • Have at least a 50% increase in sustainable earnings since the later of the policy issue date or last adjustment to increase your total disability benefits.

      Cost of Living Adjustment (COLA) rider (HH753)

      While you’re disabled and receiving monthly benefits, this rider increases your benefit to keep up with inflation. Your benefit increase is calculated on a compounded basis as determined by the change in the Consumer Price Index for All Urban Consumers (CPI-U) each year up to a maximum increase of 3%. If the change in the CPI-U index is zero or negative, your monthly benefit will remain the same.

      Presented by: Prepared on: July 24, 2017 for state of New York Disability insurance from









    Highlights of your policy

    Disability Income Insurance proposal

    Personalized for: \Rates: Male, non-tobacco Occupation class: 3A-M

    Future Benefit Increase rider (HH788)




    State of residence: NY Issue age: 29
    Effective date: 07/24/2017






    Your coverage will automatically increase every year for six years* to help keep up with inflation without submitting evidence of insurability. You are guaranteed a minimum increase of 4% compounded and a maximum of 10% compounded. This amount is based on the change in the Consumer Price Index for All Urban Consumers (CPI-U).

    You may also request an additional increase, up to $500 maximum, based on your income. This rider can be renewed at the end of six years with financial underwriting.

    *If you have the Benefit Update rider on your policy, a Future Benefit Increase offer will not be made in years of Benefit Update options.

    Policy limitations

    Limitations of Benefits for Mental/Nervous and Substance Abuse Disorders rider (HH708)

    Benefits paid to you will be limited to an aggregate lifetime benefit of 24 months for mental, nervous and substance abuse disorders as defined by the rider. Benefits will be paid beyond the 24 month limit when you are continuously confined as an inpatient in a hospital, subject to the maximum benefit period.

    Important Things To Know

    Exclusions

    We will not pay any claim for an injury or sickness due to an intentional, self-inflicted injury; your commission of or your attempt to commit a felony act or involvement in an illegal occupation; war or act of war.

    Limitations When Outside the United States, Canada or Mexico

    You must reside in the United States, Canada or Mexico for at least six consecutive months in each calendar year or benefits will be limited to 12 months during a continuous disability.

    Limitations Due to Normal Pregnancy or Childbirth

    If the elimination period is less than 90 days, then normal pregnancy and normal childbirth are not covered sicknesses. However, if the elimination period is equal to or greater than 90 days, then normal pregnancy and normal childbirth are covered sicknesses subject to the definition of disability.

    Pre-Existing Condition Limitation

    We will not pay any claim for a disability or loss which begins within 2 years after the effective date of coverage(s); and results from a pre-existing condition which was not disclosed or was misrepresented in the policy’s applications.

    Other Exclusions and Limitations

    There may be other exclusions or limitations included in your policy in addition to those stated in this section.

    Policy disclaimers

    This illustration is a general description, but is not the policy, and does not modify the provisions of any policy or rider. Policy definitions and provisions may vary in some states. Please read your policy carefully for exact definitions in your state. This policy contains certain terms, exclusions and limitations. Contact your Principal representative for complete details.

    Presented by: Prepared on: July 24, 2017 for state of New York Disability insurance from P\








    Coverage cost summary

    Disability Income Insurance proposal

    Personalized for:  Rates: Male, non-tobacco Occupation class: 3A-M

    Outlined below are details and benefits for your proposed individual disability insurance coverage.






    State of residence: NY Issue age: 29
    Effective date: 07/24/2017
















    How your policy works






    Monthly benefit






    Annual cost






    Disability Benefit

    After a 90 day elimination period, your maximum monthly benefit from day 91 to age 65

    Your occupation period is to age 65 Your total maximum monthly benefit

    Features that enhance your benefit payments

    Cost of Living Adjustment - 3%
    Benefit Update (up to the maximum allowed) Future Benefit Increase

    Features that provide additional benefit payments

    Capital Sum Benefit of $60,000 Presumptive Disability Benefit

    Features that enhance your definition of disability

    Regular Occupation
    Residual Disability and Recovery Benefit

    Features that limit your definition of disability

    Limitation of Benefits for Mental/Nervous/Substance Abuse Disorder

    Total cost for features of the policy

    Your cost savings

    Total annual cost before discount(s)

    Mental/Nervous Disorder Limitation Association

    Your total savings (20%)

    Your annual cost for coverage after discount(s)

    Presented by:
    Disability insurance from Principal® is issued by






    $5,000

    $5,000




    $1,536.00

    $1,536.00

    $244.00 No cost No cost

    No cost No cost

    $309.00 $365.50

    No cost

    $918.50

    $2,454.50

    - $490.90

    $1,963.60






    Prepared on: July 24, 2017 for state of New York








    Coverage cost summary

    Disability Income Insurance proposal

    Personalized for:Rates: Male, non-tobacco Occupation class: 3A-M

    How you can pay

    Annual payment frequency charge*

    Annualized cost

    *For payment options other than annually, there is a payment frequency charge.

    About you

    Annual earned income: $0 Other income: Bonus income: $0 Unearned income:




    State of residence: NY Issue age: 29
    Effective date: 07/24/2017

    Monthly

    (Electronic Funds Transfer)

    $98.24

    $2,061.84







    Disability Income






    Annually






    Semi- annually






    Quarterly






    $0.00






    $49.10






    $98.20






    $1,963.60






    $2,012.70






    $2,061.80






    Total cost by frequency with discount(s)






    $1,963.60






    $1,006.35






    $515.45






    $171.82







    $0 $0






    Other things to know

    Policy benefits: Product series: Sales program:

    Policy disclaimers




    Non-Taxable (Please consult your tax advisor for further information.)
    Series 700 - HH750
    Association - Select Professional Occupation (Requires Home Office Approval)






    This is a general description; it is not the policy, and does not modify or change the provisions of any policy or rider. All features, provisions and riders may not be available in all states, with all occupation classes and in conjunction with each other. They may also be subject to state variations and require an additional premium. Please read your policy carefully for exact definitions in your state. This policy has limitations and exclusions. The policy does not pay benefits for a disability which in whole or part is caused by, contributed to by, or results from an intentional, self-inflicted injury, commission of or an attempt to commit a criminal act, or involvement in an illegal occupation or activity; or suspension, revocation or surrender of your professional or occupation license or certification; or active military service during a military action or conflict; or incarceration in a penal or correctional institution for 30 consecutive days or longer. Benefits are limited when living outside the United States or Canada. Limitations for normal pregnancy or childbirth may apply. The policy also has a Pre-Existing Condition Limitation. There may be other exclusions or limitations in the policy in addition to those stated in this section. For details, contact your Principal financial representative.

    Not FDIC or NCUA Insured | May lose value | Not a deposit | No bank or credit union guarantee | Not insured by any federal government agency

    This policy provides disability income insurance only. It does NOT provide basic hospital, basic medical, or major medical insurance as defined by the New York State Insurance Department. The expected benefit ratio for this policy is 50% for individual coverage and 60% for franchise coverage. The ratio is the portion of future premiums which the Company expects to return as benefits, when averaged over all people with this policy.

    Policy form HH750; Rider forms, HH767, HH753, HH788, HH751, HH755, HH757, HH784, HH708

    JJ2195-01
    Presented by: Prepared on: July 24, 2017 for state of New York






    Disability insurance from








    Benefit Period Explanation

    Disability Income Insurance Illustration

    Prepared for:
    The benefit period is the length of time you'll receive benefits if you are disabled under the terms of the policy and

    have satisfied the elimination period. The benefit chart shows how long your benefit will be paid. The Benefit Period selected is To Age 65 and the Your Occupation Period is To Age 65.

    Depending on the age of disability, this benefit chart shows how long your benefits may be paid beyond the benefit period you selected.






































    Disability Begins






    Maximum Benefit Period is






    Prior to Age 61 Policy Anniversary






    To Age 65 Policy Anniversary






    On or After Age 61 Policy Anniversary but prior to Age 62 Policy Anniversary






    48 Months






    On or After Age 62 Policy Anniversary but prior to Age 63 Policy Anniversary






    42 Months






    On or After Age 63 Policy Anniversary but prior to Age 64 Policy Anniversary






    36 Months






    On or After Age 64 Policy Anniversary but prior to Age 65 Policy Anniversary






    30 Months






    On or After Age 65 Policy Anniversary






    No benefits are payable, unless renewed as described in the Conditional Renewal section of the policy.






    Disability Income Insurance from has certain limitations and exclusions. For costs and complete details of coverage, contact your Principal Life financial representative.

    This illustration is valid for presentation in New York.

    Presented by: Policy Form: HH750 Prepared on: July 24, 2017






    P




  • #2
    It might be reasonable, but it depends on his age, medical specialty, health status (meds, surgeries, height/weight and the such).

    Is Principal a good company?  Yes.

    Is the contract going to perform the way he wants / expects it to at claim time?  Probably, but what does he want it to do?

    Is this best deal?  Maybe, but it depends on what the other quotes were that he received from the agent.  Sometimes agents will only quote one carrier but they should quote them all as there are variations in offerings between them and as a consumer you should know what your options are to choose from.

    Let me know if we can help further.
    Scott Nelson-Archer, CLU, ChFC
    303-953-0263 Direct / [email protected]

    Comment


    • #3
      A couple of things to note with Principal's HH750 disability policy:

      • Partial disability claims are the most common type of claim for physicians. Principal's residual disability rider is not the most favorable either in it's requirement of a 20% loss of income, nor in it's proportional benefit design.

        • There are a few quality companies that only require a 15% loss of income and pay dollor-for-dollar benefits, rather than proportional benefits.



      • Likewise, Principal's recovery benefit also requires a 20% loss of income.

        • Again, there are companies that only require a 15% loss of income.




      While Principal offers a very good disability product for physicians, you might also want to check out Berkshire Life (Guardian).

      Comment

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