A disability can create substantial economic hardship for individuals and their families. As a business owner, both your personal finances and your business could be at risk. If you were to lose the ability to earn income due to a disabling accident or illness, how would you pay your bills, send your kids to college, and save for retirement?
Tax-free income when you need it most
One way to help protect against the financial loss associated with a disability is to purchase disability income insurance. If you pay the premiums, an individual policy can provide you with a tax-free income stream while you are unable to work.
Weigh your options
When evaluating disability income insurance policies, it’s helpful to consider the following.
•Definition of disability. You can typically choose between “own occupation” coverage and “any occupation” coverage. With “any occupation” coverage, you can claim disability only if you are unable to perform any type of job. This type of coverage is generally less expensive than “own occupation” coverage.
•Amount of monthly coverage. You can purchase disability insurance that will replace a certain percentage of your income — typcially between 50% and 70% of your pre-disability income. You should purchase coverage that will enable you to meet your monthly financial obligations.
•Waiting period. The waiting period represents the amount of time that must pass between the date you become disabled and the date that disability income payments begin. The longer the waiting period, the less expensive coverage will be.
•Benefit period. The benefit period can range from several months to life. The longer the benefit period, the higher the cost of insurance.
A disability income insurance policy could make the difference between financial security and financial hardship. Don’t wait to consider this protection until it’s too late.
IMPORTANT DISCLOSURES
The information included in this document is for general, informational purposes only. It does not contain any investment advice and does not address any individual facts and circumstances. As such, it cannot be relied on as providing any investment advice. If you would like investment advice regarding your specific facts and circumstances, please contact a qualified financial advisor.
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The historical and current information as to rules, laws, guidelines or benefits contained in this document is a summary of information obtained from or prepared by other sources. It has not been independently verified, but was obtained from sources believed to be reliable. HBKS® Wealth Advisors does not guarantee the accuracy of this information and does not assume liability for any errors in information obtained from or prepared by these other sources.
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