I & E Planning hosted a zoom session, for professionals, on the topic of disability income insurance. Most people are one illness or one accident away from financial distress.
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What would happen if you got sick or if you got injured? How long would your savings provide for your current lifestyle. Tony Sicliano of Visio Wealth Partners shared ideas with us on how to have meaningful conversations with folks about Disability Income. First he covered the 4 types of Disability Income. Individual, Group/Voluntary, Buy/Sell agreement, and Guaranteed Standard Issue. – display from here above on news preview page
Individual is just that, where someone applies and is approved for a Disability Income policy. So that if they became sick or injured and couldn’t work, they could have a good portion of their income replaced. Group and/or voluntary is offered by an employer. If it’s a group plan, the employer pays the premium, whereas if it’s voluntary the employee pays the premium.
Buy/Sell is where business owners agree that if one of them passes the other owner uses life insurance to “buy out” the beneficiaries of the owner that passed away. However, oftentimes Disability Income is overlooked as to what happens if one of the owners is injured or becomes ill and cannot work. What type of negative impact can that have on both the business itself as well as the income of the owner that is sick or injured.
Lastly, there are programs where you can cover certain classes of folks within a company and/or give them more coverage than a traditional group and/or voluntary plan can give you. And as long as you can answer 1 or 2 simple questions and you have a minimum of folks to be covered, the coverage is guaranteed to be issued.
To wrap it up, Tony gave us a few suggestions that individuals and business owners should consider when thinking about Disability Income Insurance. First, what would happen to your household income if you became sick or injured and couldn’t work for a period of time? Do you have a plan?
He also shared with us that many times people don’t know they have it available at work as a group and/or voluntary benefit. And in many cases don’t sign up for it. So it’s very important to know if you have it at work and how much of your “total” income it covers. For example, someone may make $100k/yr, with $50k being salary and the other $50k being bonus/commission. In many cases a company will cover 60-70% of the salary as a Disability Income benefit. So know what you have and if there are options to increase it, if necessary.
Lastly, for business owners, if you don’t have a Buy/Sell agreement, put one in place. And don’t just fund it with life insurance , but with Disability Income as well. And if your business has a few levels of staff, look at Guaranteed Standard Issue options for your company.