SI 15608PPT (Rev 1/14) Buy/Sell Funding Disability Insurance at
The Standard For producer training only. Not for use with
consumers.
Slide 2
SI 15608PPT (Rev 1/14) Importance of selling disability
buy/sell insurance Overview of disability buy/sell insurance
Buy/Sell Agreements The Standards Business Equity Protector SM
Guidelines for your consideration Required forms and documentation
Contents
Slide 3
SI 15608PPT (Rev 1/14) When you have business owner customers
who share ownership in a business, as part of the owners business
planning, you can suggest buy/sell insurance as a way to provide
equity funding in the event one of them becomes disabled. Why
selling disability buy/sell insurance is valuable to you and your
customers
Slide 4
SI 15608PPT (Rev 1/14) Disability buy/sell insurance coverage
is commonly used as a companion to life insurance to fund the
transfer of ownership in the event an owner of a small,
closely-held business becomes disabled, triggering a buy-out of the
owners interest in the business. Disability Buy/Sell Insurance
Slide 5
SI 15608PPT (Rev 1/14) Funding a buy-out obligation with
disability insurance serves dual purposes. It provides 1.a source
of funds for the purchase of a disabled owners interest in a
business 2.a disabled owner with compensation for his or her equity
in the business. Disability Buy/Sell Insurance
Slide 6
SI 15608PPT (Rev 1/14) A buy/sell agreement is a written
agreement between business owners, including the insured, providing
for the purchase of an owners entire ownership interest in the
event of total disability or other contingencies like death or
divorce. Buy/Sell Agreements
Slide 7
SI 15608PPT (Rev 1/14) The Standard requires that a buy/sell
agreement is in force within one year of a buy/sell funding
policy-effective date, and remain continuously in force up to the
time of total disability. The Standard is not a party to this
agreement. Buy/Sell Agreements
Slide 8
SI 15608PPT (Rev 1/14) Buy/Sell Agreements list all owners and
their interests provide a definition of disability state the
trigger point and waiting period create an enforceable obligation
to buy or sell state a value in the event of death, disability or
voluntary withdrawal state the purchase price or method for
calculating purchase price Buy/Sell Agreements
Slide 9
SI 15608PPT (Rev 1/14) The Standards Business Equity Protector
SM
Slide 10
SI 15608PPT (Rev 1/14) Business Equity Protector is The
Standards buy/sell disability insurance product. It is available in
all states except New York. The following slides show the data
pages that are issued with Business Equity Protector. Business
Equity Protector
Slide 11
SI 15608PPT (Rev 1/14) Business Equity Protector Data Pages
Issue ages are 18 through 60 Available to Occupation Classes 5A
through B
Slide 12
SI 15608PPT (Rev 1/14) Business Equity Protector Data Pages
There are three funding methods Downpayment Monthly Lump Sum
Slide 13
SI 15608PPT (Rev 1/14) Business Equity Protector Data Pages
There are three waiting periods 365 days 540 days 730 days
Slide 14
SI 15608PPT (Rev 1/14) Business Equity Protector Data Pages The
Future Buy-Out Expense Option Benefit Rider is issued to insureds
aged 18-49. It offers owners the opportunity to increase the
buy-out policy benefits on each policys even anniversary year to
keep pace with business needs.
Slide 15
SI 15608PPT (Rev 1/14) Business Equity Protector by Occupation
Class Incremental payout options of two, three and five years are
available. Please see The Protector Series Product Guide for more
information.The Protector Series Product Guide
Slide 16
SI 15608PPT (Rev 1/14) Business Equity Protector by Occupation
Class (continued) Occasionally, certain amounts may be unavailable
or limited because of reinsurance availability. The Minimum Monthly
Benefit for the Business Equity Protector is $600. The Minimum Lump
Sum is $10,000. Aggregate is the maximum total buy out benefit
available under the monthly benefit option or when combining lump
sum and monthly benefits under the down payment option. Under the
down payment option, the maximum monthly benefit available is the
difference between the aggregate benefit applied for and the lump
sum benefit requested, divided by the number of months in the
monthly benefit period. For example, a class 5A risk applying for a
540-day waiting period with a three year benefit period applies for
an aggregate benefit of $2,000,000 with a lump sum benefit of
$1,100,000. The monthly benefits are $25,000 ($2,000,000 -
$1,100,000 = $900,000)
Slide 17
SI 15608PPT (Rev 1/14) Business Equity Protector by Occupation
Class (continued) For Business Equity Protector the 3A occupation
class includes 3P physicians and dentists. The 4A occupation class
includes 4P physicians, dentists and 3P surgeons. If multiple
occupation classes are noted in Occupation Class List, use the
occupation class that is not listed as Protector Platinum.
Slide 18
SI 15608PPT (Rev 1/14) Because of the insureds injury or
sickness: 1. the insured is unable to perform the substantial and
material duties of his or her regular occupation; 2. the insured
does not perform any work for the business; and 3. the insured is
under the regular care of a physician appropriate for the insureds
injury or sickness. Definition of Total Disability
Slide 19
SI 15608PPT (Rev 1/14) The benefit for total disability will
become payable under the funding method shown on the data page of
the policy on the later of: the commencement date; or the date a
buy-out expense is payable to the insured as a result of the
insureds total disability. The policy must be in force on this
date. When Benefits Are Payable
Slide 20
SI 15608PPT (Rev 1/14) Once policy benefits become payable
under the monthly or down-payment funding method, The Standard will
continue to pay the benefit for total disability whether or not the
insured remains totally disabled if: The policy benefit limits have
not been exceeded; The total benefit paid to the insured under the
policy has not exceeded the total buy- out expense under the
buy/sell agreement; and The insured is not performing any work for
the business. Benefits with Business Equity Protector
Slide 21
SI 15608PPT (Rev 1/14) The amount for total disability The
Standard will pay equals the buy-out expense depending on the value
of the business at the time of disability. It will be payable under
the funding method shown on the data page, subject to the benefit
limit on the data page of the policy times the applicable
percentage from the table below: Percentage of Total Disability
Starts: Benefit Limit: Prior to the insureds 61st birthday:100% On
or after the insureds 61st birthday, but prior to the 62nd
birthday:80% On or after the insureds 62nd birthday, but prior to
the 63rd birthday:60% On or after the insureds 63rd birthday, but
prior to the 64th birthday:40% On or after the insureds 64th
birthday:20% Benefits With Business Equity Protector
Slide 22
SI 15608PPT (Rev 1/14) Business Equity Protector Data Pages The
Extended Benefit Option Rider is issued to insured aged 18 50. It
delays the reduction of policy benefits until age 65 and provides
reduced coverage until the policy anniversary following the
insureds age 70.
Slide 23
SI 15608PPT (Rev 1/14) Guidelines to Consider
Slide 24
SI 15608PPT (Rev 1/14) The Business Equity Protector policy is
designed primarily for partnerships and corporations with five or
fewer principals. Individual consideration is given to businesses
with more than ten owners. This is rare and underwriting
pre-approval is required. continued on next slide Guidelines To
Consider
Slide 25
SI 15608PPT (Rev 1/14) Individuals who are not eligible for
disability insurance coverage, other than group insurance, are
generally declined. The business must have been in existence for at
least three years. This requirement may be waived on a case by case
basis. The insured cannot own his or her policy. continued on next
slide Guidelines To Consider (contd)
Slide 26
SI 15608PPT (Rev 1/14) Money cannot be submitted with
applications to bind coverage. Participation with other companies
is possible except where law prohibits the reduction of benefits.
Where there is participation with other coverage, The waiting
periods must be the same, and The Standard must be advised
continued on next slide Guidelines To Consider (contd)
Slide 27
SI 15608PPT (Rev 1/14) Owners must own at least 10% of the
business and no more than 90%. Generally, there cannot be more than
a 20-year age gap between owners. Familial relationships between
owners may impact eligibility Guidelines To Consider (contd)
Slide 28
SI 15608PPT (Rev 1/14) Required Forms and Documentation
Slide 29
SI 15608PPT (Rev 1/14) State specific application State
specific Disability Buy-Out Fact Sheet Application Supplement Form
7202 Certification of Buy/Sell Agreement Form 7204 All forms can be
found at www.standard.com/di. Select Find Applications & Forms.
www.standard.com/di Other forms listed in your state specific forms
lists may be required at the time of underwriting Required
Forms
Slide 30
SI 15608PPT (Rev 1/14) Income documentation is required with
the application Last two fiscal years business financial statements
Please review Understanding Income Documentation. A copy is
included in each application packet.Understanding Income
Documentation Please contact your Managing General Agent or
Securian Managing Partner if you have questions. Income
Documentation
Slide 31
SI 15608PPT (Rev 1/14) The Standards individual disability
insurance producer website at www.standard.com/di
www.standard.com/di Business Equity Protector Sample Policy, form
SI 1060form SI 1060 Business Equity Protector California Sample
Policy, form SI 1060CAform SI 1060CA Business Equity Protector
Policy Summary, form SI 1062form SI 1062 Understanding Income
Documentation Flyer, form 14162 SI/SNYform 14162 SI/SNY The
Protector Series SM Reference Product Guide, 9251REF SI/SNY9251REF
SI/SNY Resources
