Life & Disability Insurance

Why buy life insurance?

 

There are many good reasons to buy life insurance, but the main reason always sums up to protecting the financial future of your family, your business or your estate.

Your Family: Life insurance provides immediate funds so your loved ones will be able to live out their dreams, no matter what the future holds.

The right life insurance policy is thoughtfully designed to cover final expenses, children’s education funds, spousal income replacement, and debt relief.

 

Your Business: Business owners need insurance for income replacement and to protect the future of the company. If a partner, owner or key employee is suddenly gone, the business can deteriorate very quickly.

With the right insurance in place, the surviving business partners will have enough capital to keep the business afloat while looking for a replacement to fill the key position. Alternatively, funds can be used to buy out the heirs of the deceased partner.

Term or Permanent Life Insurance

Term life insurance

Term life insurance: This option is simple. You choose a death benefit - how much money your heirs will be paid when you die - and a term of how long you want the coverage to stay in place. Term life insurance is the least expensive, budget friendly choice.

Permanent life insurance

Permanent life insurance: These policies offer both insurance and an investment component, generally called cash value. Part of your premiums pay for the insurance element of the policy and part goes to the investment part. As long as premiums are paid, the policy stays in force for your lifetime. These kinds of policies are attractive to those who want insurance that will stay in force for longer than a specific term, or for a lifetime and are well suited for high net-worth individuals with large estates.

Disability Income Insurance

Disability Insurance

A Disability Insurance policy is insurance that provides financial benefits to a policyholder in the event of sickness or injury that inhibits your ability to work. This plan kicks in with periodic payments when you are unable to work as a result of a disabling injury or illness, and continues to pay benefits until you can go back to work or for the number of years stated in the policy. It is ideal as a primary income replacement plan, and helps protect against the risk of depleting your savings, education, or retirement funds.

What is the Primary Purpose of having Disability Insurance?

Disability Insurance, also called paycheck protection, replaces a portion of your income to help you pay your bills and maintain your standard of living while you recover from, or deal with an ongoing disability. Loss of income can have devastating effects whether you are out of work for weeks, months or years. Not only does a disability interfere with paying expenses, it keeps you from saving money for the future.

Short Term or Long Term Disability Insurance?

Short-Term Disability Insurance is useful for major, but relatively brief, disabilities such as those suffered from an accident or a non-terminal sickness. Often, short-term disability insurance is only a portion of how you would protect your income in a situation where you cannot work. Typically, you would rely on additional means of income such as emergency savings, workers' compensation, paid leave and other forms of insurance in conjunction with short-term disability income. These policies can provide critically important funds if you are willing to accept a shorter benefit period to keep the premium as low as possible

Long-Term Disability Insurance provides comprehensive, long-term income replacement that can be customized with optional benefit riders that take into consideration - your true own occupation, future earnings, cost of living adjustments, and survivor benefits. These riders are designed to fine tune your insurance package to provide optimal benefits over the course of many years.

The amount that is paid out, and for how long, depends on the individual policy. The benefit amount and length of time determine the cost of your long-term disability policy. You should aim to spend between 1-3% of your annual salary for your long-term disability insurance, so keep that in mind when you’re shopping.

The best time to buy a policy is early in your career. The older you are, the less comprehensive a policy may be due to pre-existing conditions that lead to policy exclusions. And very similar to life insurance, disability premiums increase with age.

Overall, disability benefits dramatically reduce the risk of financial trouble if you become disabled at some point during your career. There are no restrictions on how you can use the money, you don’t have to pay it back