Income Protection-The most undersold coverage
- A 20-year old working person has a 1 in 4 chance of becoming disabled before reaching full retirement age
- Just under 50% of all mortgage foreclosures are caused by a disability
- One in Seven workers can expect to be disabled for five years or more before the retire
- Over 80% of accidents that lead to a disability ARE NOT work related
- Social Security Disability Insurance (SSDI) benefits are often hard to qualify for, insufficient and take a long time to start paying
- SSDI does not pay for partial or short-term (less than 1 year) disability
Disability concepts
Individual Disability Insurance
Basically this is paycheck insurance that most working individuals can purchase on their own. Prospects can cover as much of their paycheck as they like up to a maximum of approximately 60% of pre-disabiilty income. Why only 60%? Benefits paid from Individual disability policies are received income tax free. Premium can be customized using waiting periods, benefit periods and riders.
Buy/Sell Disability
Many businesses have buy/sell agreements that address death but many do not include details on what happens in the event of a partner becoming disabled. Even agreements that mention disability are often unfunded.
Business Overhead Expense
Business expenses do not stop just because the business owner or key person becomes disabled. Often the business owner is the key producer/salesperson and their disability can often lead to business bankruptcy.