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Benefits and Policy Features - Individual Disability Income (Series 700)
How does the policy pay? The Principal Life Insurance Company, Individual DI insurance policy provides benefits when the insured becomes Totally Disabled. The policy has a built-in Your Occupation Benefit Period. Depending on eligibility, the insured may purchase up to a to age 65, age 67, age 70, 2 or 5 years Your Occupation Period coverage to protect him or her in his or her occupation. A summary of the definition of Total Disability is: during the Your Occupation Period the insured is unable to perform the substantial and material duties of his or her occupation and is not working. After the Your Occupation Period the insured must be unable to work in any occupation he or she is reasonably suited to by education, training or experience. Additional riders for true own occupation or transitional occupation are also available to enhance the definition of disability.
Benefit Periods: Available benefit periods are 2 years 5 years and To Age 65, 67, or 70.
Elimination Periods: Available elimination periods are 30 days, 60 days, 90 days, 180 days, and 365 days.
Rehabilitation Benefit: If you're disabled under the terms of the policy and want to pursue a rehabilitation program to return to work, an extra benefit may be available to help you with the cost of the rehabilitation program that is mutually agreed upon in writing by you and Principal Life.
Death Benefit: A lump-sum benefit of three times the disability benefit is paid 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.
Waiver of Premium Benefit: After you're disabled for the lesser 90 days or the elimination period, your premiums are waived. We'll refund the premiums paid for coverage after the disability began and continue to waive all premiums that become due during your Continuous Disability.
Capital Sum Benefit Rider: Provides a one time lump-sum benefit 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 and is equal to 12 times the maximum monthly benefit.
Presumptive Disability Benefit Rider: You will receive a specific benefit 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 will start to accrue when the presumptive disability occurs and will 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. If the policy is written with a Guaranteed Standard Issue/Standard Issue case, benefits may be paid to the maximum benefit period available on the policy.
Supplemental Health Benefit: Provides a one time lump sum benefit that is equal to six-times the maximum monthly benefit if you were to become disabled under the policy and are diagnosed with Coronary Artery Bypass Graft Surgery, Cancer or Stroke. These are defined as:
Coronary Artery Bypass Graft Surgery: Means the operative procedure for the correction of two more blocked arteries of the heart. This does not include angioplasty and/or any other intra-arterial procedures.
Cancer: The presence of a malignant tumor characterized by the uncontrolled growth and metastasis of malignant cells, and the invasion of tissue. Includes: Leukemia and malignant disease of the lymphatic system, such as Hodgkin's lymphoma Stage III and IV and invasive malignant melanoma. The following diagnoses are not covered; any non-invasive cancer in-situ, Hodgkin's disease Stage I, prostate cancer Stage A, papillary cancer of the bladder, all skin cancers except invasive malignant melanoma (starting with Clark Level III).
Stroke: Any cerebro-vascular incident producing neurological deficit lasting more than 24 hours and including infarction of brain tissue or hemorrhage into brain tissue. Evidence of neurological deficit for at least 90 days must be produced.
Optional Benefit Riders
Regular Occupation: If you become totally disabled from your regular occupation and choose to work in another occupation you'll receive full benefits, regardless of the income you earn from the other occupation.
Transitional Your Occupation: This rider allows the insured to continue to receive benefits if unable to work in your occupation but are working in another occupation. Benefits will be based on replacement of up to 100 percent of prior earnings, but will not exceed the maximum monthly benefit. The monthly benefit will be equal to the lesser of (1) Prior earnings minus current earnings minus other disability coverage: or (2) The maximum monthly benefit plus social insurance substitute benefit. A minimum benefit of 50% will be paid for the first six months.
Residual Disability and Recovery Benefit Rider: If you are residually disabled under the terms of this rider and lose at least 20% of your prior earnings due solely to an injury or sickness and you are able to perform some, but not all, of the substantial and material duties or you are unable to work full time in your occupation or you are working in another occupation, you’ll receive a benefit proportionate to your loss. 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 2 consecutive months and will not be paid beyond the maximum benefit period.
Cost Of Living Adjustment (COLA) Rider: While you're disabled under the terms of the policy, your benefit is adjusted to help keep up with inflation. This rider provides a cost of living adjustment in the Monthly Benefit (plus the Catastrophic Disability Benefit, if attached to the policy) during a Disability. Each year following the start of a Disability, an adjustment will be made to the Monthly Benefit (plus the Catastrophic Disability Benefit, if attached to the policy). The benefit is increased on a compound basis based on the change in the Consumer Price Index for all Urban Consumers (CPI – U) over the past year of disability. A 3 or 6 percent COLA maximum may be selected.
Benefit Update Rider: This rider allows you to increase your coverage 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, in the event you:
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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.
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Have at least a 50% increase in sustainable earnings.
There is no cost for this rider, if eligibility requirements are met.
Future Benefit Increase Rider: This rider automatically increases your coverage every year for six years without submitting evidence of insurability, based on the change in the Consumer Price Index for All Urban Consumers (CPI-U), with a minimum guaranteed increase of 4% compounded and a maximum of 10% compounded. This rider can be renewed at the end of six years with financial underwriting.
Catastrophic Disability Benefit Rider: This rider provides an additional monthly benefit in addition to your monthly disability benefit (and social insurance substitute benefit if on the policy) in the event you become catastrophically disabled solely due to an Injury or Sickness and you lose the ability to perform two or more Activities of Daily Living (bathing, continence, dressing, eating, toileting, or transferring) without assistance or is Cognitively Impaired, or is Presumptively Disabled. Maximum issue limit is $8000, but cannot exceed five times the base benefit.
Limitations of Benefits from Mental/Nervous and Substance Abuse Disorders Rider: This rider limits benefits payable for mental, nervous and substance abuse disorders as defined by the rider to an aggregate lifetime benefit of 24 months. 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. There Is a premium reduction of up to 10% for this benefit. Not available in all situations. Required in some states for single and multi-life business.
Extended Total Disability Benefit Rider: If your Continuous Disability began before age 55 and you remain Continuously Totally Disabled between age 55 and Age 65, we will continue to pay monthly benefits after age 65 up to your Maximum Aggregate equal to 50, 75 or 100 times monthly benefit. To receive this benefit beyond age 65, you must be Totally Disabled from any occupation you are suited to by your education, training and experience. This feature is designed to provide additional protection beyond age 65 in the event you continue to be disabled and are unable to work.
This is a general discription; 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 availalbe in all states with all occupation classes and in conjunction with each other. They may also be subject to state variations and require additional premium. Please read the policy carefully for exact state definitions.
Insurance issued by The Principal Life Insurance Company, a member of the Principal Financial Group, Des Moines, IA 50392-0001, www.principal.com
For producer use only