1. The information contained in this tutorial is confidential and intended for the training and education of Colonial Life & Accident Insurance Company employees and benefit counselors (insurance producers in WA) only. Colonial Life has not authorized any other use of this information. Do not give or show it to prospective insureds, employers of prospective insureds, other insurance carrier representatives, worksite marketing competitors, or anyone else not employed by or contracted with Colonial Life & Accident Insurance Company or other Unum Group business units. Audio narration in this lesson augments the written content, so turn on your computer speakers or headset Understanding Individual Voluntary Benefits Version NY 12-5-11

2. Main Menu Understanding individual voluntary benefits will help you write more business because you will be able to position the need for our products more effectively. Which means to you that you will be able to inform and educate employers and employees on the value that voluntary benefits will bring to them. And the real benefit to you is that you’ll be confident that the product recommendations you make will be the best solutions to help financially protect the employees and their families in case of accident or illness. What are Individual Voluntary Benefits? Characteristics of Voluntary Benefits Advantages of Voluntary Benefits Major Medical Vs Voluntary Benefits Units Of Conviction Our Voluntary Benefits in Action Small Business Misconceptions

3. Lesson Objectives By the end of this lesson you will be able to: Explain Voluntary Benefits and their advantages in the marketplace Explain to an employee how Voluntary Benefits work Answer the following questions: – What are some characteristics of Individual Voluntary Benefits? – What are some advantages of offering Voluntary Benefits for an employer and employee? – How are Voluntary Benefits different from core benefits like Major Medical?

4. Insurance products that employees may choose to purchase through their employer at rates that are generally lower than they could get on their own. Examples of Voluntary Benefits include: – Vision – Life – Accident – Disability – Supplemental health – Critical illness – Cancer insurance Many employers offer Voluntary Benefits in order to provide a more robust benefits package at no cost to them. What are Individual Voluntary Benefits? Understanding Individual Voluntary Benefits

5. Guaranteed renewable* Portable No coordination of benefits Benefits paid directly to the policyholder *May vary by state and product Characteristics of Individual Voluntary Benefits Understanding Individual Voluntary Benefits

6. Advantages for an Employer Understanding Individual Voluntary Benefits Benefit Costs Additional benefits at no cost to the company Generally less expensive than employees could buy on their own Benefits Helps fill the “gaps” of their major medical Offers employees wider array of benefits Employee Improves employee morale Helps attract and retain quality employees

7. Advantages for the Employee Understanding Individual Voluntary Benefits Non-Medical Expenses Travel expenses to treatment centers Food & lodging while away from home Extra childcare Extra household help House payment or rent Car payment Utility bills Groceries Lunch money for the kids Loss Of Earning Power Medical Expenses Deductibles Co-payments Out-Of-Network

8. In addition to gaining some financial peace of mind, employees appreciate Individual Voluntary Benefits for other reasons: Flexibility in using claims payments Intact coverage More lenient underwriting Stable premiums Continued convenience Additional Advantages of Voluntary Benefits Understanding Individual Voluntary Benefits

9. Pays benefits to the healthcare provider Group plan owned by the employer Expense based Deductible & co-pays Coordination of benefits One size fits all Necessity Major Medical Coverage Pays benefits to the policyholder Individual plan owned by the policyholder Indemnity based No deductibles or co-pays No coordination of benefits Tailored by individual needs Was once a nicety, but now is a necessity Individual Voluntary Benefits Coverage

10. Employer: “ Our Individual Voluntary Benefit products allow your employees to purchase additional insurance products because the payroll rates are generally lower than if they bought them on their own. Which means to you; that you’ve added benefits for your employees at no dollar cost to your company. And the real benefit to you is that you save additional FICA dollars with the premiums paid from pre-tax dollars and deducted from the employee’s paycheck.” Employee: “Our Individual Voluntary Benefit products can help you cover the additional family expenses associated with a serious illness or injury, because these plans pay cash benefits directly to the policyholder. Which means to you; that you won’t have to drain your saving account or rack up credit card bills for the money for deductibles, out-of-pocket expenses, and lost of wages. And the real benefit to you is that these plans are affordable, averaging around one hour’s wage per week, which your employer will set up as a payroll deduction, making it simple and convenient.” Units of Conviction – UOCs for VBs Understanding Individual Voluntary Benefits

11. Our Individual Voluntary Benefits in Action Joe Employee House Payment Groceries Utilities Car Payment Car Insurance Gas Childcare Lunch Money Monthly Income +$$ Monthly Expenses -$$ Understanding Voluntary Benefits

12. Our Individual Voluntary Benefits in Action Joe vs. Ski Slope House Payment Groceries Utilities Car Payment Car Insurance Gas Childcare Lunch Money Monthly Income +$$ Monthly Expenses -$$ Understanding Individual Voluntary Benefits NOTE: For this example, it is assumed that Joe’s skiing accident qualifies under his policy as a covered accident. No limitations or exclusions apply in this accident claim illustration.

13. Our Individual Voluntary Benefits in Action Joe Employee House Payment Groceries Utilities Car Payment Car Insurance Gas Childcare Lunch Money Monthly Income Monthly Expenses Doctors Hospital Surgery Prescription Drugs Deductible Co-pay Travel & Lodging Out of Network Extra Childcare Lost Wages Major Medical Savings Bank Friends & Family Employer Accident Expenses Understanding Individual Voluntary Benefits

14. Joe lives in South Carolina Joe’s Accident Plan benefits breakdown: – Ambulance$200 – Emergency Room$125 – X-ray$20 – Broken Leg (surgical repair)$1,650 – One night stay at the hospital$1,225 – Crutches$100 – Two follow up visits with his Doctor$100 – Six Physical Therapy Visits$150 TOTAL BENEFITS FROM ACCIDENT PLAN: $3,570 What Does This Really Mean for Joe? This example is based on Colonial Life’s Accident 1.0 rates and benefit amounts for South Carolina. Actual rates and benefit amounts may very by state. Benefits may not be available in all states. Exclusions and limitations apply. See policy for details. Understanding Individual Voluntary Benefits

15. Concern over HR administration burden Fear of low employee participation Worry that enrollment monopolizes employees’ time Belief that Voluntary Benefits are designed for large corporations Common Misconceptions of Small Business Understanding Voluntary Benefits

16. True False Individual Voluntary Benefits are insurance products that employees may choose to purchase through their companies at rates that are generally lower than they could get on their own. Lesson Quiz Understanding Individual Voluntary Benefits

17. Portable Low deductible Guaranteed Renewable* Benefits paid directly to the policyholder No coordination of benefits *May vary by state and product Which one of these is NOT a characteristic of Individual Voluntary Benefits? Lesson Quiz Understanding Individual Voluntary Benefits

18. Helping pay the health insurance deductible Helping with travel expenses Helping replace lost wages All of the above The benefits received from a Individual Voluntary Benefits claim can be used for____________? Lesson Quiz Understanding Voluntary Benefits