Principal Increases Overhead Expense Limits to $50,000
Principal Life Insurance Company is increasing its Overhead Expense (OE) insurance maximum monthly issue and participation (I&P) limits up to a maximum of $50,000. The chart below outlines the maximum monthly I&P limits with the new limits shown in bold.
Occupation Classes |
Elimination Period |
Benefit Factor
of 12 |
Benefit Factor
of 18 |
Benefit Factor
of 24 |
3A/3A-M, 4A/4A-M and
5A/5A-M |
30 Days |
$30,000; $28,000 w/AIO rider1 |
60/90 Days |
$50,000
$46,000 w/AIO rider1 |
$40,000
$37,000 w/AIO rider1 |
$30,000
$28,000 w/AIO rider1 |
A and 2A |
30/60/90 Days |
$10,000; $8,000 w/AIO rider |
Coverage Needs
If your client needs coverage beyond a Benefit Factor of 12 (e.g. 18 or 24), but also needs $50,000/month in coverage, multiple policies may be sold to the client. A few examples are provided below.
Option 1 |
Option 2 |
Option 3 |
- $30,000/month benefit; Benefit Factor of 24
- $20,000/month benefit; Benefit Factor of 12
|
- $30,000/month benefit; Benefit Factor of 12
- $20,000/month benefit; Benefit Factor of 24
|
- $20,000/month benefit; Benefit Factor of 24
- $15,000/month benefit; Benefit Factor of 18
- $15,000/month benefit; Benefit Factor of 12
|
If a client is applying for multiple policies, only one disability insurance application part A and C and TeleApp (or Part B) is needed. OE insurance application supplements for each policy are required. Submit the application supplements with the disability insurance application.
Illustration System
The illustration system will be updated to reflect the new I&P limits in November 2009. In the interim, if illustrating:
- The new maximum monthly I&P ($50,000 or $40,000) - Run an illustration for half the benefit amount desired and double the premium for an approximatetotal premium.2 The AIO rider should not be selected but will be added during underwriting if available.
- Multiple duration options - Run separate illustrations for each duration3. When illustrating multiple policies, the AIO rider and the Benefit Update rider maynot be available on both policies. The placement of these riders will be determined during the underwriting process.
Please note: medical requirements may not post correctly within the illustration system. Total the amount being applied for and refer to these guidelines.
Transition Guidelines
- Pending applications or policies pending delivery - Applications currently in underwriting or policies pending delivery can be reviewed for the higher I&P limits if an email is sent to your Case Coordinator or DI Underwriter prior to September 28, 2009.
- Inforce policies
- Policies issued between May 27, 2009 and July 29, 2009, can be reviewed for the higher I&P limits if an email is sent to your Case Coordinator or DI Underwriter prior to September 28, 2009. Additional underwriting requirements may be requested.
- Policies put inforce before May 27, 2009 can receive the higher I&P limits by submitting an adjustment application. Additional underwriting requirements may be requested. The higher I&P limits are available via Benefit Update based on the new guidelines shown above.
Recent Underwriting Enhancements
View this document for a listing of Principal Life’s recently announced underwriting enhancements.
For questions or help running illustrations please contact DIBroker.
back to top  |
