Income protection insurance or disability insurance is one of the most important layers of protection you can add to your risk management strategy. We can help you design and implement a plan to protect your business, family, or both.
A disability can happen to anyone, at any time.
Losing your monthly income can have devastating results. This is especially true for high-income individuals or those that are self-employed.
Disability insurance, sometimes known as income protection insurance or paycheck protection insurance, will guard against the depletion of your savings or the selling off of assets to meet your monthly expenses during your rehabilitation period. Most financial advisers agree 65% of someone’s current monthly income is needed to continue their current lifestyle.
We specialize in high limit disability insurance. High income professionals have different needs than more traditional workers, largely for three reasons:
1) Group plans are insufficient to cover their earnings.
2) They have an individual plan they purchased years ago and never upgraded their coverage as their earnings skyrocketed.
3) They are self-employed and own no disability insurance.
For most people, yes. In some form. Even if you already have coverage, will all of the income that you need be there for you if you suffer a disability?
That may be true, but is it enough? Some people have coverage through work, others do not. Even people who have group long-term disability insurance have an issue. For those with higher incomes of $150,000 or more, there are some shortfalls that need to be considered:
There are a few professions, notably doctors and dentists, that need disability insurance drilled into their heads early in their careers. It is not uncommon to see a resident or fellow pursuing disability insurance, even though they are earning little income.
The thought is simple: buy an income protection insurance policy when you’re young and healthy and then increase that policy as your income goes up.
For this to become a reality, three things must happen.
For many individuals, who are high income earners and already have an existing policy, #3 is the most likely culprit why he or she is underinsured.
We encounter clients almost daily with an existing policy that they bought years ago and in no way protects their income should they miss a long period of work due to sickness or injury.
To fix this, we normally have two options.
Use the future purchase rider (if available) on the existing policy.
With proof of a substantial (20%+) increase in earnings, this rider will allow the insured to increase their coverage up to a limit (dictated by the policy or by your income) without having to go through medical underwriting.
This can be especially important if the insured was much healthier when they initially purchased the policy.
Purchase a second policy.
Depending on the amount required, a simplified or accelerated underwriting process may be available. Most notably, this option will still ask health questions and may go in-depth on your health history. While we have a lot of success writing clients with medical conditions, it can be a challenge and may lead to higher premiums and/or certain health issues not being covered by the policy.
It is best to buy up from the beginning and increase coverage as you go. If that’s not an option, looking to enhance or supplement your existing policy can pay huge dividends.
So, you either have group or personal coverage that isn’t addressing your current needs or you have no coverage at all.
This is where individual disability insurance coverage can greatly assist your problem.
Individual disability insurance is simply private coverage you purchase directly from an insurance company as opposed to it being offered through your work or an association,
Individual coverage has a few distinct advantages. For one, it is portable. That means, if you leave your job/profession, you can take it with you.
Group insurance will sometimes offer this benefit; however, it will normally not. If you leave your job, you likely will lose your disability coverage.
The other main issue with group insurance is it won’t cover partial disabilities. Some of the largest group/association plans in the country, such as the American Medical Association, require total disability prior to making a claim.
While this may be acceptable for some conditions, often, this will cause the denial of a claim, whereas an individual policy would begin to pay.
If you make more than 370k annually, a typical policy will not be acceptable. Most disability insurance policies, sometimes referred to as income protection insurance, will not cover more than 20k per month.
Most people don’t need more than basic coverage but you’re not most people if you’re on this website. You’re a high-income professional and need more than what a traditional plan will offer.
We offer supplemental/excess disability insurance for high-income individuals.
Most traditional carriers will decline the self-employed for several reasons.
First, some self-employed people don’t make any money.
Better stated, they show little income on their tax returns. Self-employed professions can take a lot of write-offs, and most take advantage of this right.
Unfortunately, like getting a mortgage or business loan, disability insurance carriers really care more about your INCOME than anything else. Your company could have great revenues, but you will only be covered for what your net income looks like.
However, some carriers have programs for self-employed individuals that allow them to apply for more disability insurance than they would otherwise qualify for under normal circumstances.
If you’re interested in discussing how one of these disability insurance plan upgrades can help you, please contact us using the form on the left.
There are other characteristics that self-employed careers possess that are not desirable from a disability insurance company’s perspective.
Examples can be: working from home, part-time hours, fluctuating income/capital gains income, high-risk work, high-risk hobbies or the big one, health. I encourage you to get as much permanent disability insurance as possible, then we can supplement that plan to meet any coverage gap.
We can assist you in getting standard DI plans through the traditional carriers. Our role is to shop the major disability insurance companies for the best policy that fits your needs. With your direction and our expertise, finding the right disability policy for you is only a phone call (or email) away.
We offer most types of disability insurance. Income protection insurance comes in several shapes and sizes and what fits perfectly for one might not work for another.
The variety of disability plans available are too numerous to list individually, but if it exists, we can help you find it. From short-term disability to long-term, blue collar to white collar occupation disability insurance, or any occupation to own occupation disability insurance, we have you covered. Protecting your paycheck with disability insurance should only have to be done once if done right.
Contact us today for a no-obligation consultation.
Besides personal, group, and business plans, we also offer specialty plans such as:
And even loss of future income:
Take the Case of Jake Butt
Jake Butt was drafted in 2017 by the Denver Broncos as a tight end. At one time in his collegiate career, he was named tight end of the year (in 2015) and won an award as the best tight end in football.
He held that title a second year in a row (in 2016) and was poised to be a top pick in the 2017 draft. That dream ended when he suffered a torn ACL in the 2016 Orange Bowl.
This story may sound tragic had Jake Butt not had a contingency plan. First, he had purchased a 2 million-dollar disability insurance policy, protecting him should he never be able to play football again.
More importantly, he had added a loss of future income/value policy to his disability policy. This rider cost $25,000 and while that might sound like a substantial sum, it paid off in spades.
Because of his injury, Jake Butt fell several rounds in the draft and multiple tight ends were taken ahead of him. But with each passing name, Jake Butt collected $10,000 and by the time the dust was settled, and the Denver Broncos called his name, Jake Butt had collected $543,000 on his loss of value rider.
We help people like Jake protect their lifetime earnings. You can contact us today to do the same.
Take the case of Jim Rollins
Jim has a trucking company. Jim and 2 employees drive truck for him.
As a small business owner, Jim recognizes the need to have proprer insurance in place should he have a health issue. Making 400k+ for several years as an owner/operator, Jim has ample personal savings to weather most financial issues.
That being said, he owes a lot of money on his three trucks, which would be difficult to pay for should he become disabled.
Business overhead expense coverage can step in to help offset these costs should Jim become disabled and unable to perform the normal duties of his profession as an owner/operator.
BOE (business overhead expense) is there to help offset business costs should he become unable to perform his normal job duties.
There are several other business use disability plans that can be purchased. That includes pension completion policies, salary continuation disability, and group business plans for highly compensated individuals just to name a few.
High-limit disability insurance plans can be customized to meet your needs. We fully understand and realize no two situations or needs are the same.
There are a lot of agencies from which you can purchase high limit disability insurance, income protection insurance, or even traditional disability insurance. Our clients choose us because we specialize in disability insurance. It is not an ancillary product. It is pretty much the only product. While people have different needs, one thing remains constant: We will do everything we can to get you the best disability insurance policy at the right price for your goals.
If you’d like more information about income protection insurance or disability insurance, please read Your Complete Guide to Buying Disability Insurance.
Please contact us today for a confidential discussion of your needs. We provide expert, unbiased advice on disability insurance plans. Our toll-free number is 888-636-2310.
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