Protect one of your most valuable assets – your income.
If you’re unable to work due to a sickness or injury, disability insurance can help you meet expenses and maintain your standard of living. It can help you pay bills like your mortgage, tuition and car payments, and help cover expenses for food, clothing and utilities. By replacing a portion of your income, disability insurance can help provide financial security until you get back on your feet and return to work.
Nearly one in four Americans will become disabled before they retire. Back injuries, cancer, heart disease and other illnesses are usually to blame, in addition to accidents. And that’s precisely why disability insurance should be a core component of your financial life.
Types of Disability Insurance
Short term disability insurance can replace a portion of your income during the initial weeks of a disabling illness or accident.
How much Income Replacement Will I Need?
Evaluate your monthly expenses to determine your risk. As a general rule, you may be eligible for a monthly benefit equal to about 60% of net salary or business income. TRG will help assess your personal situation and provide further detailed assessment of your income replacement needs.
Can I also protect any future income increases I may receive?
Any policy issued will include a monthly benefit amount based on your current financial and occupational information. Most policies also offer a future insurability feature (or “future insurability option”) that allows for the purchase of additional coverage without the need to provide further evidence of good health.
When will I be eligible for benefits?
The language in the policy determines the conditions under which you become eligible for benefits.
Will my benefits keep pace with inflation?
Most policies offer riders to help your benefits keep pace with inflation during a disability. A cost of living adjustment (COLA) rider will adjust benefits each year while you remain disabled and eligible for benefits. COLA riders can be vital to maintaining your standard of living during an extended disability.
You may already have individual disability insurance to help protect yourself and your loved ones from the unforeseen impacts of becoming disabled. But what about protecting another that’s near and dear to your heart? Your business. Without small business protection solutions in place, your company could be at grave risk if you become disabled.
An integrated approach to business protection
With Business Disability Insurance, you’ll have a comprehensive range of business protection strategies to help keep your business strong. From overhead expense protection to long-term debt coverage to disability buy-sell insurance, you’ll enjoy the confidence of knowing your business is secure.
Coverage for overhead expenses
If you become disabled, the day-to-day expenses associated with running your business can quickly add up. Before long, these expenses may force you to consider layoffs or even shuttering your business. Unless, of course, you have overhead expense disability insurance. Should disability strike, Overhead Expense covers your normal, necessary and customary expenses associated with the operation of your business, including rent, mortgage, utilities and more, and can provide reimbursement for up to 100% of your expenses every month. It can make the difference between returning to a viable business and returning to no business at all.
Key Person Disability Insurance
In the event a vital employee becomes disabled, this type of insurance provides the company with disability income checks to make up for financial loss or use for temporary replacement costs. It is designed to provide financial stability in a time of stress and anxiety due to the sudden loss of an important employee.
Who Needs Key Person Disability Coverage?
- Employees who would be extremely difficult, time-consuming or expensive to replace
- Highly skilled employees with unique training
- Employees with exclusive ties to key clients, like sports stars
- Narrow profit margins where a staff loss would mean financial trouble
- Need to protect their revenue stream from loss (ex: hospitals protecting against the loss of a high-earning, respected surgeon)
- Would be devastated if a high revenue-producing client became disabled and unable to perform
Key Person Disability vs. Key Person Life
When most business leaders think of purchasing key person coverage, they turn to life insurance. However, industry leaders point out that the chance of losing a key person to disability is 17 times greater than losing a key person to death, and the costs of hiring a recruiter to replace the key person and training him or her for a short period of time could be much more exorbitant than finding a permanent replacement.
Requirements and Coverage Options
To obtain key person disability coverage, the individual must be a consenting employee and you must illustrate that your business would incur substantial financial loss without him or her. To qualify as a key person, most insurers require that the employee’s salary be in the top 20 percent of the company and that he or she makes at least $110,000 in 2010. All key person policies are written specifically for the employee in question.
Funding buy-sell agreements with disability provisions
Keeping your business running strong has to be a priority if you or your partner becomes disabled. By creating a standing buy-sell agreement that contemplates the potential for both death and disability, you can help ensure that your business is successfully transferred in the event you or your partner is unable to continue working. When you fund this agreement with disability buy-out insurance, you’ll be shifting the financial burden associated with the buy-out from your business to the insurance company, helping to keep your company’s finances intact and improve its chances for continuing long-term success.
Business Reducing Term (BRT) disability insurance
Debt. It’s often a given when you’re running your own business. But if you become disabled, debt can become a threat to your business’s financial health. A Business Reducing Term disability insurance policy can help you continue to meet your business’s fixed term financial obligations, including:
• Business start-up or practice purchase loans
• Capital improvement of expansion loans
• Employment contract guarantees
• Contract performance guarantees
• Purchase agreements
• Lease agreements