Disability Income Insurance

1
Disability Income Insurance

• Introducing MassMutuals MaxElectSM
• For Guaranteed Standard Issue Offers
• For Producer Use Only. Not For Use with The
  Public.
• C 57864

2
Why MaxElect

• We have created an enhanced multi-life version of
  Radius that aligns with 2 key components of our
  marketing strategy
• Meeting the Unique and Changing Needs of our
  Customers
• Providing our producers the product they need for
  worksite marketing where we provide a Guarantee
  Standard Issue offer.
• For Producer Use Only. Not For Use with The
  Public.

3
What Products to Sell?

• MaxElect
• For all GSI Offers
• For all GSI Offers which include additional
  coverage where full underwriting is needed
• Radius 04 Series
• For all fully underwritten business (individual
  and multi-life)
• For Producer Use Only. Not For Use with The
  Public.

4
Meeting Unique and Changing Needs of our Customers

• Ability to select the appropriate benefit during
  the first offering and adjust benefits at renewal
  (customized solutions).
• Continued ability to add fully underwritten
  coverage on top of GSI benefits
• Updated provisions of the contract to align with
  work site marketing needs and administration..
• For Producer Use Only. Not For Use with The
  Public.

5
Benefits for Producers

• Capitalize on renewal activities
• Opportunity to increase participation due to
  customized solutions
• Ability to offer greater cost incentives to
  employers (employer paid business using pre-ex)
• Ability to better align with Group LTD provisions
• Opportunity for greater alignment with FlexElect
  Multi-life (more eligible participants more
  sales)
• For Producer Use Only. Not For Use with The
  Public.

6
Field Advisory Committee

• Disability Income worked with representatives
  from the following areas in the design and
  implementation of MaxElect.
• AAX Members
• GAX Members
• DI Specialists
• Brokerage Directors
• Master Producers
• Multi-Life Producers
• Regional Sales Consultants
• DISO Sales Managers
• For Producer Use Only. Not For Use with The
  Public.

7
Whats Changed from Radius?

• Advantage
• Eliminate the conversion to 61, 9200 CR/TCR and
  9500 CR/TCR
• Extending issue ages for these riders aligns with
  worksite sales
• The variety of pre-existing condition limitations
  align with most common Group LTD plans and
  contributes to the profitability of voluntary
  worksite business.

• Change
• Conditionally renewable to age 75
• Expanding issue ages for Extended Partial, COLA
  and MBPE to age 64
• Pre-Existing Condition Limitation (PECL) 12/12 in
  base, 6/12, 3/12 by endorsement

8
Whats Changed from Radius?

• Change
• 7 Employer pay rate discount using PECL
• 300 minimum policy
• Dividend change to premium payer

• Advantage
• Employer pay business has favorable morbidity and
  we can pass a cost savings on to employers
• Greater participation anticipated.
• If the employer is paying the premium, we want
  the employer to reap the benefits of our
  dividends

9
Whats Changed from Radius?

• Change
• Exclusions and limitations (normal pregnancy
  covered)
• Right to Apply current policy series being sold
• Effective date of coverage

• Advantage
• Continuity with both our worksite products and
  Group LTD plans
• Will always use current policy series and current
  rates for fully underwritten business
• Streamlined definition to align with worksite
  marketing for GSI offers.

10
Whats Changed from Radius?

• Advantage
• To align with pre-existing condition and to
  include normal pregnancy
• Changes made to align with the pre-existing
  condition limitation provisions.

• Change
• Definition of Sickness
• Time Limit on Certain Defenses

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MaxElect Pre-Existing Condition Limitation

• Pre-Existing Condition
• A condition for which
• The Insured received medical treatment,
  consultation, care or services including
  diagnostic measures, or took prescribed drugs or
  medicines within 12 months prior to the Effective
  Date of Coverage or the Effective Date of a
  change in Coverage or reinstatement or
• The Insured had symptoms that would have caused
  an ordinarily prudent person to consult a health
  care provider in the 12 months immediately prior
  to the Effective Date of Coverage or the
  Effective Date of a change in Coverage or
  reinstatement.
• For any additional benefit or change on a
  subsequent application, a disease, mental
  disorder or physical condition will no longer be
  considered a Pre-Existing Condition if it causes
  disability that begins after the change in policy
  coverage has been in force for a period of 12
  consecutive months.
• For Producer Use Only. Not For Use with The
  Public.

12
MaxElect Pre-Existing Condition Limitation

• 12/12 Pre-Existing Condition (PECL) is included
  in the base policy. We have endorsements that
  allow a 6/12 and 3/12 PECL, and an endorsement
  that removes the PECL from the policy.
• Full flexibility in plan design, except in the
  following scenarios
• Required for voluntary cases without underlying
  Group LTD
• To consider offers for favorable voluntary cases
  with less than 75 eligible employees (50)
• An option to continue offer at renewal that might
  be discontinued
• For Producer Use Only. Not For Use with The
  Public.

13
MaxElect -PECL Advantages

• Flexibility to align with Group LTD PECL
• Renewal/Re-solicitation opportunities ability
  to re-solicit employees using MaxElect who
  previously declined offer or did not take maximum
  benefit they were eligible for
• Cost containment option (voluntary rates would
  have had to increase between 15-20 to maintain
  our profitability)
• Improved morbidity results for voluntary
  multi-life business (claims during contestability
  period, protection against anti-selection)
• Note Inclusion of Pre-Existing Condition
  Limitation has no bearing on our reducing or
  enhancing a GSI offer
• For Producer Use Only. Not For Use with The
  Public.

14
MaxElect Pre-Existing Condition Limitation

• It is important to note that if a claim is
  ineligible due to the pre-existing condition
  limitation meaning that the date of disability
  began within 12 months of the Effective Date and
  the claim is denied the insured will NOT start
  to collect a benefit on the 13th month following
  the Effective Date.
• The Claim may be considered only if the date of
  disability begins AFTER the first 12 months
  following the Effective Date.
• For Producer Use Only. Not For Use with The
  Public.

15
MaxElect Pre-Existing Condition Limitation

• For GSI Coverage Only
• The Pre-Existing Condition will apply as defined.
• For GSI Coverage with Fully Underwritten Coverage
• If the fully underwritten coverage is issued
  standard, even if there is an admitted medical
  history and we decide to still issue standard,
  the pre-existing condition limitation will not
  apply to either the GSI or fully underwritten
  amount of insurance.
• If the fully underwritten coverage is rated
  substandard, ridered, declined, or there was an
  unadmitted medical history and we issued
  standard, the pre-existing condition limitation
  applies to the GSI amount of insurance.
• Lets look at a few examples.
• For Producer Use Only. Not for Use with The
  Public.

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MAXELECT POLICY SIMPLIFIED COVERAGE ONLY   

• Four possible claim scenarios for Pre-existing
  Conditions.
• Coverage is available on three of the four
  scenarios.

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MAXELECT CLAIM SITUATION 1Last Treatment
Date Disability DateFor Carpel Tunnel
Syn due to CTS  12 months
Effective 12 months prior Date after  
Simplified Coverage Result COVERED CLAIM

• MAXELECT CLAIM SITUATION 2Last Treatment
  Date Disability DateFor Carpel
  Tunnel Syn due to CTS 
• 12 months Effective 12 months prior
  Date after  Simplified Coverage
  Result COVERED CLAIM

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MAXELECT CLAIM SITUATION 3 Last Treatment
Date Disability Date For Carpel Tunnel
Syn due to CTS  12 months
Effective 12 months prior Date after  
Simplified Coverage Result COVERED CLAIM

• MAXELECT CLAIM SITUATION 4 Last Treatment
  Date Disability Date For Carpel
  Tunnel Syn due to CTS 
• 12 months Effective 12
  months prior Date after  Simplified
  Coverage Result CLAIM NOT COVERED DUE TO
  PRE-EXISITING CONDITION LIMITATION

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Risk of Disability

• Pre-Existing Condition Medical consultation and
  prescribed medication within 12 months prior to
  the Effective Date for Hypertension.
• Disability Stroke (Cerebral Vascular Accident
  CVA) within 12 months after Effective Date of
  coverage.
• Typical Result Covered Disorder. While the
  Pre-Existing Condition places the individual at a
  higher risk for the disabling disorder, medical
  science has not documented a substantially direct
  causal relationship between the two conditions.
• MassMutual believes that every claim must be
  analyzed individually with due regard given to
  the particular facts, the provisions of the
  specific policy at issue, and state laws
  applicable to each situation.

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Disease Progression

• Pre-Existing Condition Medical consultation and
  prescribed medication within 12 months prior to
  the Effective Date for Diabetes.
• Disability Visual Disorder (Diabetic
  Retinopathy) within 12 months after Effective
  Date of coverage.
• Typical Result Disorder Not Covered. Diabetes
  has well established long-term complications for
  which medical science has documented a
  substantially direct causal relationship between
  the two conditions.
• MassMutual believes that every claim must be
  analyzed individually with due regard given to
  the particular facts, the provisions of the
  specific policy at issue, and state laws
  applicable to each situation.

21
PECL Scenarios Combination of GSI Fully
Underwritten Coverage (assumption is that claim
in on the pre-existing condition)
Scenario Coverage History (On long form application) Coverage Issued Claim for disability that begins within first 12 months of Effective Date Claim for disability that begins after first 12 months of Effective Date
1. 5,000 GSI 2,000 Fully Underwritten N/A Admitted (pulled back muscle a long time ago) Standard Standard Eligible Claim (PECL would not apply) Eligible Claim Eligible Claim (PECL would not apply) Eligible Claim
2. 5,000 GSI 2,000 Fully Underwritten N/A Admitted (recent back injury within the pre-existing condition limitation period) Standard Exclusion Rider On Back Ineligible Claim (PECL would apply since we excluded the condition) Ineligible Claim (Exclusion Rider) Eligible Claim (PECL would not apply) Ineligible Claim (Exclusion Rider)
22
PECL Scenarios Combination of GSI Fully
Underwritten Coverage
Scenario Coverage History (On long form application) Coverage Issued Claim for disability that begins within first 12 months of Effective Date Claim for disability that begins after first 12 months of Effective Date
3. 5,000 GSI 2,000 Fully Underwritten N/A Admitted (abnormal lab, i.e. cholesterol) Standard Rated (Substandard) Ineligible Claim (PECL would apply) Eligible Claim (additional premium paid for condition) Eligible Claim (PECL would not apply) Eligible Claim (additional premium paid for condition)
4. 5,000 GSI 2,000 Fully Underwritten N/A Admitted (Heart By-Pass Surgery) Standard Decline Ineligible Claim (PECL would apply) N/A No coverage issued Eligible Claim (PECL would not apply) N/A No coverage issued
23
PECL Scenarios Combination of GSI Fully
Underwritten Coverage
Scenario Coverage History (On long form application) Coverage Issued Claim for disability that begins within first 12 months of Effective Date Claim for disability that begins after first 12 months of Effective Date
5. 5,000 GSI 2,000 Fully Underwritten N/A Unadmitted Standard Standard Ineligible Claim (PECL would apply) Ineligible Claim (Representations Contestability would apply) Eligible Claim (PECL would not apply) Ineligible Claim (Representations Contestability would apply for first 24 months, Fraud provision could apply after 24 months)
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MaxElect-Exclusions

• Insured is imprisoned (this time does not count
  toward meeting waiting period).
• Caused by war while the insured is in the
  military forces of any country at war or in any
  civilian non-combatant unit serving with those
  forces. War includes declared or undeclared war
  or any act of war.
• Caused by any intentionally, self-inflicted
  injury.
• Sustained during the commission of a crime or
  engaged in an illegal occupation.
• Due to the suspension, revocation or surrender of
  the insureds professional or occupational
  license or certification.
• For Producer Use Only. Not For Use With Clients.

25
MaxElect Right to Apply Provision

• Fully underwritten increases any time during the
  year
• Same as FlexElect Multi-life
• If current policy series is sold in contract
  state, we will add to existing policy using
  current rates at time of Right to Apply
  application.
• If a new series policy is being sold, we will
  issue a new policy using current rates for that
  policy series.
• For Producer Use Only. Not For Use With Clients.

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MaxElect New Features

• Long Term Care Credit Endorsement
• Allows 2 of premium to be accumulated and
  applied to reduce first year premium on a
  MassMutual Long Term Care policy (full
  underwriting of LTC policy is required)
• Do not have to terminate DI policy to use
• Immediate family members can use the credits
• Have one year after policy expiration to use
  credits
• For Producer Use Only. Not For Use With Clients.

27
MaxElect New Features

• Catastrophic Disability Benefit Rider
• Covers
• presumptive disability,
• severe cognitive impairment and
• the inability to perform 2 out of 6 Activities of
  Daily Living (bathing, continence, dressing,
  eating, toileting, transferring)
• Allows insured to cover up to 100 of their
  income at time of application, subject to a
  maximum monthly benefit of 8,000
• Available at an additional cost
• For Producer Use Only. Not For Use With Clients.

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MaxElect Pricing
PECL Option MaxElect Reduction on Voluntary Business vs. Radius 04 Series MaxElect Employer Pay 7 Rate Discount vs. Radius 04 Series
No PECL Same as Radius 04 Series Same as Radius 04 Series (7 ER Paid Discount does not apply)
3/12 5 12
6/12 8 14
12/12 12 18
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Producer Commissions

• MaxElect will be added to our current commission
  and bonus schedules.
• There is no difference between MaxElect and
  Radius.
• For Producer Use Only. Not For Use With Clients.

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Competition

• Who Else Has Pre-Existing Condition Limitations?
• Standard (XB 140)
• Berkshire Guardian (1200)
• Principal (HH 750 NC)
• Policy information taken from policy filings in
  the state of MA as of 2004.
• For Producer Use Only. Not For Use With Clients.

31
MaxElect Voluntary vs. Competition25 Multi-life
Discount (Rate information taken from rate
filings in the state of TN and MA as of 2004.
Includes Extended Partial)
PECL Option UNUM Choice NWM RR-DI Standard Protector Berkshire Provider Plus Principal HH700 Met Life Omni Advantage
12/12 19 lower 14 lower 9 lower 36 lower 15 lower 13 lower
3/12 12 lower 7 lower 2 lower 30 lower 8 lower 6 lower
No PECL 7 lower 2 lower 3 higher 27 lower 4 lower 1 lower
32
MaxElect Employer Pay vs. Competition 25
Multi-Life Discount (Rate Information taken from
rate filings in the state of TN and MA as of
2004. Includes Extended Partial.)
PECL Option UNUM Choice NWM RR-DI Standard Protector Berkshire Provider Plus Principal HH700 Met Life Omni Advantage
12/12 24 lower 20 lower 16 lower 40 lower 21 lower 19 lower
3/12 18 lower 13 lower 9 lower 35 lower 15 lower 12 lower
No PECL 7 lower 2 lower 3 higher 27 lower 4 lower 1 lower
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MaxElect Marketing Sales Aides

• MaxElect Product at a Glance (DI1815)
• Product Portfolio (DI1900)
• Product 04 Sales Sheet (DI1817)
• Employer Presentation
• Group Meeting Presentation
• Competitive Pieces (Fieldnet)
• Annotated Application (DI1871)
• Annotated Policy (DI1872)
• Multi-life Worksite Marketing Producers Guide
  (DI1806)
• For Producer Use Only. Not For Use with The
  Public.

34
MaxElect - Questions

• If you need assistance, please call
• Your Regional Sales Consultant
• Your DISO Sales Office
• MassMutual DI Service Center at 1-800-272-2216
• For Producer Use Only. Not For Use with The
  Public.

35
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