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Protecting Your Business

If you or one of your key employees suddenly became disabled, would you have to spend your hard-earned savings, your retirement assets or even your child’s college education funds to make ends meet?

If you became too sick or hurt to work, in addition to protecting your income, you also need to be concerned about:

Paying Business Expenses

The Need

As a business owner with a company to run, you know how difficult it is to get away. What happens if you become disabled? Could your business stay open while you were gone? Would the business be able to continue paying the bills if you weren’t working?

The Solution

Overhead Expense insurance is designed for owners of small- to medium-sized businesses whose personal service is key to the continued earning of business income.  It helps keep your business running while you recover from a disabling injury or illness.  It also helps you have a financially sound business to sell, should you need to do so.

Plus, with the Business Loan Protection rider* on your Overhead Expense policy, Principal Life Insurance Company helps make payments to qualifying loans to keep your business open during an unexpected total disability.

*Available at an additional cost, not approved in every state.

The Benefits

  • Principal Life reimburses you each month while you’re unable to work to help pay the bills associated with running your business (such as house payments, utilities, property taxes, etc. so you don’t have to dip into assets)
  • Can mean the difference between staying open and closing the doors
  • Helps maintain goodwill with customers, vendors and creditors
  • Helps retain business value

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Keeping the Business Investment Intact

The Need

Do you have a plan for the future of your business?  If you or one of your business partners became totally disabled and could not return to the business, do you have a plan or the means to buy out the disabled partner?

The Solution

Protect your business from a permanent disability by funding a buy-sell agreement with Disability Buy-Out (DBO) insurance from Principal Life. It allows remaining owners to continue the business without:

  • Using business cash flow
  • Obtaining loans from financial institutions
  • Selling shares of the business to get working capital

The Benefits

  • Assures the disabled owner can be bought out at a predetermined price and time after a disability occurs.
  • Customers, creditors and employees are assured of business continuity.
  • Competitors cannot buy the disabled owner’s business interest in the firm.
  • Current owners retain control of the business rather than the disabled owner’s family members.
  • It provides money for the disabled partner to pay living and medical expenses

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Protecting Key Employees

The Need

You rely on your key people. They make significant contributions to your business. Many employers protect their businesses from the loss of key employees due to death, but few protect against a key employee’s Total Disability. If one of them were no longer around due to a disability, what would that mean for the future of your business? How would cash flow, revenues, profitability and morale be affected? What would customers and creditors think?

The Solution

Key Person Replacement insurance is an effective way to provide your business with the funds necessary to help handle the loss of a key employee and recruit and train a replacement. You (the business) pay the premium and are the owner of the policy insuring the key employee in the event of Total Disability. If the key employee becomes Totally Disabled, the business receives benefits, generally tax-free. Benefits can be used at your discretion.

The Benefits

  • Demonstrates financial stability to customers, creditors, shareholders and other stakeholders by having a contingency plan in place
  • Helps offset the costs of temporary staffing, finding a replacement and/or recruiting, filling revenue gaps, etc.

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Contact your financial representative today! Don't have one? Locate one through our Office Locations section.

JHA Disability Fact Book, 2008.

Not all solutions are available in all states. Disability insurance has limitations and exclusions. For costs and complete details of coverage, contact your Principal Life financial representative.

Policy Form #s DI: HH641/HH750; OE: HH702; DBO: HH703; Key Person: HH772
Approval t10083003hf


audio available Listen to this short presentation (02:53) to learn how to protect your business by planning for the unexpected.

Did You Know?

43% of all people age 40 will have a long-term disability event prior to age 65.[1]

Investment and insurance products are: not a deposit · not FDIC Insured ·
not insured by any federal government agency · not a bank guarantee · and may lose value.

Have a question? Call us at 1.800.986.3343

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