As an employed individual, business owner or employer, you understand the importance of protecting and preserving what you have worked hard to create. In the event of a disabling injury or illness, disability insurance can provide you with income protection if you are unable to receive your normal paycheck.
Disability insurance (DI) offers a solid base to any financial strategy by mitigating risk and providing a sense of comfort to the insured and those dependent upon them. Disabling injuries and illnesses are often extremely unpredictable but can happen to anyone—in fact, 1 in 5 Americans today live with a disability.1
North Star can help you prepare for the unexpected. With our experienced and knowledgeable DI team working in conjunction with your North Star financial advisor, we’ll be able to work with you to find the option best suited for you. Our independence allows us to offer a menu of options and a recommendation tailored for your unique situation. We are licensed in all 50 states and have access to all of the main “True Own Occupation” companies that protect your specific occupation, which provides customized protection.
Too often, we assume that a disabling injury or illness is something that only happens to other people—but never us. However, 1 in 4 of today’s 20-year-olds will become disabled before retirement age. Moreover, in early 2016, Social Security paid an average monthly disability benefit of $1,166—barely above the 2015 poverty level.1 The future is unpredictable but it’s important to think about how you would continue to pay for your lifestyle (your rent or mortgage, recurring bills, groceries, etc.) in the event of a disability that prohibits you to work.
Without disability insurance, you also risk being unable to further contribute to your retirement savings. Disability Retirement Protection can help replace what both you and your employer were contributing prior to the disability to keep you on track.
Not all disability insurance is created equally and North Star can help evaluate which option is best for you. If you currently receive group benefits through your employer, we can help determine if the coverage you own is sufficient for your lifestyle.
As a business owner, you have multiple considerations when examining your disability insurance needs. Below are a few of the areas North Star can help you with:
Whether you are starting your business or expanding it, you likely will need to take out a business loan. Often times, your banking institution or lender will require that you have disability insurance to prevent you from defaulting on future loan payments in the event of a disability or illness. If such an event does occur, you can rest easy knowing that Business Loan Protection will pick up your payments where you left off or if you never recover, knowing that your loan will continue to be paid off.
Nearly every business has some sort of overhead to account for—including a lease, employee salaries, insurance premiums and so on. If you were to become disabled, how would you be able to continue paying for these items? Business Overhead Expense Repayment (BOE) can help cover these expenses while buying you time. If need be, BOE can allow you time to develop a proper exit strategy while ensuring other aspects of your business are operating as normal.
A buy/sell agreement between partners identifies what happens to an owner’s share of the business if departure is unavoidable. Among other topics covered in this agreement, guidelines on disability are established. Disability insurance can provide a funding mechanism to pay for buy-out without causing owners to use personal cash or dip into the business’s cash-flow.
Employers of all company sizes have innumerable options when deciding which benefits to offer employees. Quality benefits lead to higher morale, company loyalty and all-around employee satisfaction. Several options are outlined below that North Star can help guide you on:
Available for as few as two employees, this particular benefit can be designed in a way to both maximize efficiency while keeping costs down for the employer.
This plan allows you to “carve out” your key employees or executives that you wish to offer unique benefits to, namely disability insurance. Premiums for this are marginal and can be deducted by the company, yet benefits paid in the event of a disability will be far larger than if you instead paid them the premium amount in cash bonuses.
One of the biggest obstacles in applying for individually owned disability insurance is qualifying based on health. As an employer, you are able to offer individually owned DI on a Guaranteed Issue basis—which means NO medical history reviews or exams and NO exclusions. Based on the size of your company, this can be employer- or employee-paid.
Every workplace has their key person or people—the individual(s) with consistently high productivity and the ability to drive revenue growth. Key-person disability insurance is designed to compensate the employer when a disability happens to one of these employees. Typically, this pays in a lump-sum that can be used for whatever is necessary to offset the costs of losing the individual(s).
Interested in learning more about your options for disability insurance? North Star’s National Disability Insurance Specialist, Chase Brakke, and his team are able to assist you. Contact your North Star financial advisor for more information or call for a quote at 1-877-384-7348.
1 “The Facts about Social Security’s Disability Program.” Social Security Administration Publication No. 05-10570. Published January 2017. https://www.ssa.gov/disabilityfacts/materials/pdf/factsheet.pdf.
1820257 / DOFU 07-2017